Last week Obama rejected the Keystone XL Pipeline, which Republicans largely sought to approve alongside recent tax cuts. The decision was applauded by many environmental activists, and surprisingly, by the railroad industry.
The environmental issues are complicated. The oil pipeline would surely disrupt ecosystems, but many claim the alternative isn't much better.
"Canada is still going to produce its oil, and the U.S. is still going to need energy. Without the pipeline, Canada will have to try to sell some of its oil to China… And we will buy more from the Middle East or somewhere else. The overall result: more oil shipped longer distances and greater chances of an oil spill."
Enter The Railroad
The winner here becomes the Railroad. Some of the oil that would have been moved by pipeline will now be hauled away by rail.
And since they were deregulated in the 1980's, railroad companies have had incentive to improve. The result is that railroads are considered one of the most productive and energy-efficient modes of transport.
"Onboard electronics assess topography, track curvature, train length and weight to calculate the optimum speed for conserving fuel," reports Time Business. "In fact, the Environmental Protection Agency calculates that moving freight by train rather than truck over long distances reduces greenhouse gas emissions by up to 75%."
Business Section: Investing Ideas
Do you believe the railroad industry stands to benefit from the rejection of the Keystone XL pipeline?
If you're interested in following the trends of railroads, we list the 10 biggest railroad stocks, sorted by market cap, here:
Use the Turbo Chart to Compare the Performance of the First Two Companies in the List to the S&P 500:
2. Norfolk Southern Corp. (NSC, Earnings, Analysts, Financials): Engages in the rail transportation of raw materials, intermediate products, and finished goods primarily in the United States. Market cap of $24.27B.
6. Genesee & Wyoming Inc. (GWR, Earnings, Analysts, Financials): Operates short line and regional freight railroads, and provides railcar switching services in the United States, Canada, Australia, the Netherlands, and Belgium. Market cap of $2.63B.
7. Trinity Industries Inc. (TRN, Earnings, Analysts, Financials): Provides products and services to the industrial, energy, transportation, and construction sectors primarily in the United States, Canada, Mexico, the United Kingdom, Singapore, and Sweden. Market cap of $2.52B.
(Written by Rebecca Lipman. Data sourced from Finviz.)
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Dig Deeper: Access Company Snapshots, Charts, Filings
- Union Pacific Corporation (UNP, Chart, Download SEC Filings)
- Norfolk Southern Corp. (NSC, Chart, Download SEC Filings)
- CSX Corp. (CSX, Chart, Download SEC Filings)
- Kansas City Southern (KSU, Chart, Download SEC Filings)
- Westinghouse Air Brake Technologies Corporation (WAB, Chart, Download SEC Filings)
- Genesee & Wyoming Inc. (GWR, Chart, Download SEC Filings)
- Trinity Industries Inc. (TRN, Chart, Download SEC Filings)
- RailAmerica, Inc. (RA, Chart, Download SEC Filings)
- Greenbrier Companies (GBX, Chart, Download SEC Filings)
- American Railcar Industries, Inc. (ARII, Chart, Download SEC Filings)
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