U.S. President Donald Trump has hinted at the potential revival of the Canada-U.S. Keystone XL oil pipeline project, which was previously abandoned by past administrations. This suggestion came following a new bilateral trade agreement between the two countries. However, experts in the industry believe that this statement may be more politically motivated than related to the petroleum sector.
In a recent social media post, Trump mentioned a “deal” with Canada and a temporary halt on new tariffs, just before the implementation of additional levies on Canadian imports. Referring to his predecessor, Trump stated, “The great Keystone XL Pipeline, long ago killed by Sleepy Joe Biden, may be awoken from the grave!”
While there was no direct response from Prime Minister Mark Carney to Trump’s post, industry insiders have varied opinions on the feasibility of reviving the Keystone XL project. Dennis McConaghy, a former executive at TransCanada Corporation, now known as TC Energy, sees Trump’s signal as an opportunity for Carney in upcoming trade negotiations. However, there are concerns about the project facing familiar political and environmental obstacles if pursued.
Since imposing tariffs on Canadian goods in 2025, Trump has maintained a stance that the U.S. can do without Canadian imports. Despite this, essential items like oil, potash, and critical minerals have remained exempt from tariffs. The potential resurrection of the Keystone XL project has sparked both optimism and skepticism within the industry.
Valérie Beaudoin, a member of the Advisory Committee on Canada-U.S. Economic Relations, believes that approving Keystone XL could pose challenges for Trump. The project’s revival could face uncertainties given the possibility of a Democrat successor in 2028. This move by Trump is seen as a response to past administrations’ policies, particularly targeting Biden and the Democrats.
South Bow Corp., the operator of the Keystone Pipeline System, did not provide comments on Trump’s recent remarks. The project, initially proposed in 2008, faced significant opposition over the years, leading to its abandonment. However, Trump has shown support for sections of the project, emphasizing its benefits.
Carney has expressed interest in advancing Keystone XL, and the project remains approved by the Canadian government. Additionally, South Bow is collaborating with Bridger Pipeline on the Prairie Connector project, utilizing parts of the Keystone XL pipeline. This initiative could potentially boost Canada’s crude oil exports to the U.S.
South Bow CEO Bevin Wirzba highlighted the long-term demand for Canadian crude in the U.S., emphasizing the value of the Prairie Connector project. While the project has secured commitments from customers, a final investment decision is pending. Wirzba reiterated the resilience of the Canadian crude market in the Gulf Coast refining sector.
Overall, the potential revival of the Keystone XL project signifies a complex intersection of politics, trade dynamics, and environmental considerations within the Canada-U.S. energy relationship.