U.S. President Donald Trump has hinted at the possibility of reviving the Keystone XL oil pipeline project, which was previously scrapped by his predecessors, under a new trade agreement with Canada. Despite the announcement, experts suggest that Trump’s statement may be more politically motivated than focused on the energy sector.
In a recent social media post just before imposing new tariffs on Canadian goods, Trump revealed a “deal” with Canada and temporarily paused the tariffs. He mentioned in his post on the Truth Social platform that the Keystone XL Pipeline, which was discontinued by Joe Biden, could potentially be resurrected.
Former TransCanada Corporation executive Dennis McConaghy believes Trump’s signal regarding the project could influence Prime Minister Mark Carney’s upcoming decisions. Since February 1, 2025, when the U.S. imposed tariffs on Canadian goods, Trump has consistently emphasized that the U.S. can do without Canadian products, excluding certain commodities like oil and minerals from the tariffs.
Despite Trump’s remarks on the Keystone XL project, experts like Carlo Dade caution that the revival of the controversial pipeline could face challenges, including political and environmental obstacles. Valérie Beaudoin of the Advisory Committee on Canada-U.S. Economic Relations suggests that approving the project may be easier for Carney than for Trump, considering the potential changes in the political landscape.
While Trump’s mention of Keystone XL may be seen as a response to the policies of past administrations, industry analysts like Rory Johnston highlight that reviving the project would pose significant challenges given the current market conditions and progress on other energy projects.
South Bow Corp., the company behind the Keystone Pipeline System, has not commented on the recent developments. The project, initially proposed in 2008 by TransCanada and ConocoPhillips, faced opposition and was eventually abandoned before Trump took office in 2025. Trump’s administration has taken steps to revive parts of the project, garnering his support.
The Prairie Connector project, a collaboration between South Bow and Bridger Pipeline, aims to utilize sections of the Keystone XL pipeline for increasing crude oil exports to the U.S. Former TransCanada executive McConaghy sees potential value in the project, emphasizing the long-term demand for Canadian crude in the U.S. market.
South Bow CEO Bevin Wirzba remains optimistic about the Prairie Connector project, citing strong demand for Canadian crude in the U.S. Despite securing commitments from customers, the final investment decision on the project is pending.
Overall, the potential revival of the Keystone XL project under the new trade agreement has sparked discussions within the energy industry, highlighting the complex dynamics between the U.S. and Canada in the oil sector.