U.S. President Donald Trump has suggested that a Canada-U.S. oil pipeline project, previously abandoned by past administrations, may see a revival under a new trade agreement between the two countries. However, experts in the industry, including a former executive linked to the Keystone XL project, believe that Trump’s statement is more politically motivated than related to the oil sector.
In a recent social media announcement just hours before imposing new tariffs on Canadian imports, Trump revealed a temporary halt on tariffs and a “deal” with Canada. Referring to his predecessor, Trump mentioned in a post on his Truth Social platform, “The great Keystone XL Pipeline, long ago killed by Sleepy Joe Biden, may be awoken from the grave!”
While Prime Minister Mark Carney did not directly address Trump’s post, Dennis McConaghy, a former executive vice-president at TransCanada Corporation, now TC Energy, commented that Trump’s gesture could influence Carney’s decisions regarding trade negotiations in the coming days.
Since imposing tariffs on Canadian goods in 2025, Trump has frequently stated that the U.S. does not rely on Canadian products, despite key commodities like oil, potash, and minerals being exempt from tariffs. The potential revival of the Keystone XL project, as hinted by Trump, was cautiously viewed by industry experts like Carlo Dade, who highlighted the existing challenges of political and environmental opposition.
The possibility of reviving Keystone XL under the current political landscape, particularly with a potential change in administration, presents uncertainties for investors. Valérie Beaudoin, a member of the Canadian government’s Advisory Committee on Canada-U.S. Economic Relations, emphasized the complexities that Trump’s proposal could entail.
South Bow Corp., which operates the Keystone Pipeline System, did not provide immediate comments following Trump’s remarks. The Keystone XL project, initially proposed in 2008, faced multiple hurdles before being effectively abandoned by its backers. Trump’s administration has taken steps to revive sections of the project, emphasizing its significance.
Furthermore, South Bow’s Prairie Connector project, collaborating with Bridger Pipeline, aims to utilize parts of the Keystone XL pipeline for expanding Canada’s oil exports to the U.S. Although the project could enhance export capabilities, the final investment decision is pending.
In conclusion, the potential revival of the Keystone XL project remains a subject of debate amid shifting political dynamics and environmental concerns, underscoring the complexities of cross-border energy trade relations.