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Enbridge (ENB) Gets 3 Years to Stop Part of Line 5 Pipeline
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Enbridge Inc. (ENB - Free Report) has been given three years by a federal judge to shut down parts of the Line 5 oil pipeline.
Enbridge has been ordered to pay more than $5 million for trespassing on a northern Wisconsin tribe’s reservation.
The decision came four years after the Bad River Band sued the pipeline operator in federal court, and forced it to shut down and remove its Line 5 pipeline from the reservation.
The tribe filed a lawsuit against Enbridge over erosion fears, which could threaten to expose and rupture the pipeline. Safety issues have increased in recent weeks as spring flooding worsened erosion on the Bad River’s banks near Line 5. At present, the pipeline is only 11 feet from the river at the meander.
Environmentalists warned that exposed pipelines would be weakened and could rupture at any time, causing massive oil spills. The pipeline’s rupture at the meander is a public disturbance. The current conditions create an unreasonable risk of failure.
However, a district judge claimed that the threat of rupture does not require the pipeline’s immediate shutdown. The shutdown will lead to temporary shortages and elevated prices for refined gas, propane and butane in the Upper Midwest and Eastern Canada. This will create difficulties mainly for the poor and other economically challenged households.
Based on the environmental risks, the court ordered Enbridge to follow a more conservative shutdown plan. The order grants Enbridge three years to stop the operation of Line 5 on any portion within the Band’s tribal territory and to prepare reasonable remedies at the sites. The company will have to pay a portion of its profits to the tribe as long as the pipeline continues to operate in trespass.
Line 5, which is part of Enbridge’s larger Mainline and Lakehead systems, extends from Wisconsin through Michigan and into Ontario. The pipeline is a major source of 540,000 barrels per day of propane and crude oil supply for Michigan and nearby areas.
Enbridge’s Line 5 pipeline has faced sustained criticism for years over the risk of an oil leak since a section of the pipeline runs underwater through the Straits of Mackinac. Enbridge intends to appeal and remains open to an amicable resolution with the Bad River Band.
Price Performance
Shares of Enbridge have underperformed the industry in the past three months. The stock has gained 0.9% compared with the industry’s 3% growth.
Eni reported first-quarter adjusted earnings from continuing operations of $1.85 per American Depository Receipt, beating the Zacks Consensus Estimate of $1.39. Better-than-expected quarterly earnings resulted from an increase in refinery throughput volumes.
For 2023, Eni reiterated its total hydrocarbon production guidance of 1.63-1.67 MBoe/d, indicating an increase from the 1.61 MBoe/d reported in 2022. E expects to discover exploration resources of 700 MBoe this year.
Seadrill is a market-leading international driller with strong exposure in key strategic basins like the U.S. Gulf of Mexico, Brazil and Angola. SDRL reported first-quarter 2023 earnings of 83 cents per share, outpacing the Zacks Consensus Estimate of 55 cents per share.
Seadrill has witnessed upward earnings estimate revisions for 2023 and 2024 in the past 30 days. The Zacks Consensus Estimate for SDRL’s 2023 and 2024 earnings per share is pegged at $2.93 and $4.01, respectively.
Enterprise Products reported first-quarter 2023 adjusted earnings per limited partner unit of 64 cents, outperforming the Zacks Consensus Estimate of 62 cents. This was primarily due to higher contributions from the Natural Gas Pipelines & Services business.
In the first quarter, Enterprise Products generated an adjusted free cash flow of $1,347 million against a negative free cash flow of $1,618 million in the year-ago quarter. EPD recorded a distributable cash flow of $863 million in the same time frame.
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Enbridge (ENB) Gets 3 Years to Stop Part of Line 5 Pipeline
Enbridge Inc. (ENB - Free Report) has been given three years by a federal judge to shut down parts of the Line 5 oil pipeline.
Enbridge has been ordered to pay more than $5 million for trespassing on a northern Wisconsin tribe’s reservation.
The decision came four years after the Bad River Band sued the pipeline operator in federal court, and forced it to shut down and remove its Line 5 pipeline from the reservation.
The tribe filed a lawsuit against Enbridge over erosion fears, which could threaten to expose and rupture the pipeline. Safety issues have increased in recent weeks as spring flooding worsened erosion on the Bad River’s banks near Line 5. At present, the pipeline is only 11 feet from the river at the meander.
Environmentalists warned that exposed pipelines would be weakened and could rupture at any time, causing massive oil spills. The pipeline’s rupture at the meander is a public disturbance. The current conditions create an unreasonable risk of failure.
However, a district judge claimed that the threat of rupture does not require the pipeline’s immediate shutdown. The shutdown will lead to temporary shortages and elevated prices for refined gas, propane and butane in the Upper Midwest and Eastern Canada. This will create difficulties mainly for the poor and other economically challenged households.
Based on the environmental risks, the court ordered Enbridge to follow a more conservative shutdown plan. The order grants Enbridge three years to stop the operation of Line 5 on any portion within the Band’s tribal territory and to prepare reasonable remedies at the sites. The company will have to pay a portion of its profits to the tribe as long as the pipeline continues to operate in trespass.
Line 5, which is part of Enbridge’s larger Mainline and Lakehead systems, extends from Wisconsin through Michigan and into Ontario. The pipeline is a major source of 540,000 barrels per day of propane and crude oil supply for Michigan and nearby areas.
Enbridge’s Line 5 pipeline has faced sustained criticism for years over the risk of an oil leak since a section of the pipeline runs underwater through the Straits of Mackinac. Enbridge intends to appeal and remains open to an amicable resolution with the Bad River Band.
Price Performance
Shares of Enbridge have underperformed the industry in the past three months. The stock has gained 0.9% compared with the industry’s 3% growth.
Image Source: Zacks Investment Research
Zacks Rank & Stocks to Consider
Enbridge currently carries a Zack Rank #3 (Hold).
Some better-ranked players in the energy space are Eni SPA (E - Free Report) and Seadrill Limited (SDRL - Free Report) , currently sporting a Zacks Rank #1 (Strong Buy), and Enterprise Products Partners LP (EPD - Free Report) , carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Eni reported first-quarter adjusted earnings from continuing operations of $1.85 per American Depository Receipt, beating the Zacks Consensus Estimate of $1.39. Better-than-expected quarterly earnings resulted from an increase in refinery throughput volumes.
For 2023, Eni reiterated its total hydrocarbon production guidance of 1.63-1.67 MBoe/d, indicating an increase from the 1.61 MBoe/d reported in 2022. E expects to discover exploration resources of 700 MBoe this year.
Seadrill is a market-leading international driller with strong exposure in key strategic basins like the U.S. Gulf of Mexico, Brazil and Angola. SDRL reported first-quarter 2023 earnings of 83 cents per share, outpacing the Zacks Consensus Estimate of 55 cents per share.
Seadrill has witnessed upward earnings estimate revisions for 2023 and 2024 in the past 30 days. The Zacks Consensus Estimate for SDRL’s 2023 and 2024 earnings per share is pegged at $2.93 and $4.01, respectively.
Enterprise Products reported first-quarter 2023 adjusted earnings per limited partner unit of 64 cents, outperforming the Zacks Consensus Estimate of 62 cents. This was primarily due to higher contributions from the Natural Gas Pipelines & Services business.
In the first quarter, Enterprise Products generated an adjusted free cash flow of $1,347 million against a negative free cash flow of $1,618 million in the year-ago quarter. EPD recorded a distributable cash flow of $863 million in the same time frame.