Trans Mountain oil pipeline expansion to proceed

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The survey was conducted from May 25-28, concluding one day before the federal government announced it's paying Kinder Morgan Canada $4.5 billion for the controversial Trans Mountain pipeline and its related assets.

For its part, the Trudeau government greenlighted Trans Mountain in November 2016 and has long insisted the project is in the national interest because Canada loses $15 billion every year as a result of now limited access to export markets outside the U.S.

The government is also lobbying hard in the United States this week since President Donald Trump only exempted Canada and Mexico from steel import tariffs until Friday.

Kinder Morgan Canada Ltd (TSE:KML)'s share price hit a new 52-week high during trading on Tuesday.

Before Morneua's announcement, Alberta's government said it would help finance the project and later proposed legislation that could block exports of oil, natural gas or fuels to its western neighbor.

Scott McBride, of Nanaimo, B.C., holds a caricature of Prime Minister Justin Trudeau during a protest against the Kinder Morgan Trans Mountain pipeline expansion in Burnaby, B.C., on Saturday March 10, 2018.

"Investors should note that the opposition to this project is strong, deep and gets bigger by the day", Greenpeace Canada's Climate & Energy Campaigner Mike Hudema said.

Canada's purchase of Kinder Morgan Inc.'s embattled pipeline is good news for the oil patch, so long as it doesn't become the norm.

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Instead, an energy company which has followed the rules in good faith, spent almost a billion dollars in development and undergone exhaustive vetting to win regulatory approval has been impeded at every turn by opponents, including the government of British Columbia and the cities of Burnaby and Vancouver with what amount to nuisance court actions, given how Kinder Morgan has so far won 16 of these legal challenges in a row.

But Atlantic Canadian proponents of the Energy East pipeline say the same reasoning used to justify Ottawa's investment in the Trans Mountain pipeline also applies to Energy East.

It expects after-tax proceeds for the approximately 30 per cent of Kinder Morgan Canada not owned by its Houston-based parent company to be about $1.25 billion.

Analysts were less than enthusiastic about the sale.

The transaction could further "galvanize opposition" from special interest groups while complicating the government's ability to provide protection for construction sites in the Lower Mainland of B.C., including its willingness to call in the RCMP if needed, they said.

The poll shows that 49% of British Columbians say they're "less likely" to vote for the federal Liberals in the next election.

Pipeline customers Suncor Energy Inc. and Cenovus Energy Inc. welcomed the move as a sign Ottawa recognizes the importance of getting more Alberta crude from the oilsands to more markets.

"The federal government has set a precedent that it will nationalize projects of significant importance rather using the rule of law and prior regulatory approvals to push a project forward under private ownership", its analysts said in a report. "Canada has no hope of joining in the global carbon dioxide reduction plan if we build this pipeline".

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