Trump's Keystone XL Comments Spotlight New Canadian Oil Pipeline Proposal

A recent social media post by former U.S. President Donald Trump stating the Keystone XL oil pipeline "may be awoken from the grave" has injected new uncertainty into U.S.-Canada energy and trade relations. The comment came during a sensitive period for trade talks between the two nations, drawing attention to both the history of the canceled project and a new pipeline proposal from a successor company.

Context of the Revival Talk

According to a Reuters report, the pipeline has been a topic in high-level discussions. Canadian Prime Minister Mark Carney reportedly raised a potential revival of the project during trade talks with Trump last October as a possible area for cooperation.

Trump's recent social media activity on the topic coincided with a key deadline in trade negotiations. He posted a meme about the pipeline shortly after announcing a three-day reprieve on additional tariffs for Canada and again before a new deadline was set to reach an agreement.

Keystone XL's Tumultuous History

The original Keystone XL project was a major cross-border infrastructure proposal designed to transport Canadian crude oil to U.S. refineries. Its key characteristics included:

Ad

• Capacity: 830,000 barrels per day of crude oil.
• Route: A proposed 1,900-kilometer (1,181-mile) path from Alberta's oil sands to a major storage hub in Cushing, Oklahoma, and onward to the Gulf Coast.
• Timeline: The project was rejected by the Obama administration, revived by Trump, and ultimately canceled in 2021 after President Joe Biden revoked a key presidential permit.

The cancellation resulted in billions of dollars in losses for the developer, TC Energy. The company has since spun off its crude oil pipeline business into a new entity named South Bow to focus on natural gas transport.

A New Project on the Horizon

While the original Keystone XL is defunct, South Bow has proposed a new project called the Prairie Connector. In partnership with U.S.-based Bridger Pipeline, this new line would transport 550,000 barrels per day from Alberta to Wyoming, utilizing some of the pipe that was already installed on the Canadian side for Keystone XL.

However, the company remains cautious due to past political volatility. South Bow's CEO has stated he needs proof that a U.S. presidential permit is "durable" before moving forward. The company, which declined to comment on Trump's posts, has said it will make a final investment decision on the Prairie Connector project in 2027.