UPDATE 1-U.S. approves Alberta Clipper pipeline project

Most of the oil shipped on the line will come from Canadian oil sands producers, which have been under from some U.S. environmental groups and legislators for boosting greenhouse gas emissions because of expanding production in the oil sands -- a Florida-sized region of northern Alberta that contains the largest oil reserves outside the Middle East.

The State Department said it took greenhouse gas emissions into account when deciding to issue the permit, saying that the issue is best addressed through the domestic policies of the United States and Canada and through international agreements.

Enbridge shares fell 32 Canadian cents to C$41.00 on Thursday afternoon on the Toronto Stock Exchange. ($1=$1.09 Canadian) (Reporting by Scott Haggett and Sue Pleming; editing by Peter Galloway)