U.S. President Donald Trump suggests that a former Canada-U.S. oil pipeline project, which was previously abandoned by past administrations, could potentially be revived as part of a new trade arrangement between the two countries. However, industry experts point out that this statement may have more political implications than practical implications for the petroleum sector.
In a recent social media post, Trump announced a temporary halt on imposing new tariffs on Canadian goods, hinting at a “deal” with Canada and mentioning the possibility of resurrecting the Keystone XL Pipeline, which had been scrapped during the tenure of his predecessor, Joe Biden. While Prime Minister Mark Carney did not directly respond to Trump’s post, experts believe that Trump’s mention of the pipeline could be a strategic move amid ongoing trade negotiations.
Since initiating tariffs on Canadian imports in early 2025, Trump has consistently emphasized that the U.S. can function independently from Canadian resources, despite certain exceptions such as oil, potash, and critical minerals. Dennis McConaghy, a former executive associated with the pipeline project, views Trump’s remarks on Keystone XL as a potential bargaining chip in trade discussions.
Nevertheless, experts caution that reviving the controversial pipeline faces numerous challenges, including political and environmental hurdles. The University of Calgary’s Carlo Dade highlights the complexities involved in advancing the project, especially considering the potential changes in U.S. leadership in the future.
Valérie Beaudoin, from the Advisory Committee on Canada-U.S. Economic Relations, suggests that approving Keystone XL could be more manageable for Carney than for Trump, given the uncertainties surrounding future administrations and their policies. The revival of the project is seen as a response to past decisions by the Biden administration, underscoring the political motivations behind Trump’s recent statements.
South Bow Corp., the company behind the Keystone Pipeline System, is exploring the Prairie Connector project in collaboration with Bridger Pipeline, aiming to leverage existing infrastructure to boost Canadian crude oil exports to the U.S. Despite the potential benefits of this initiative, including enhanced value creation, the final decision on the project’s construction is pending.
South Bow CEO Bevin Wirzba emphasizes the sustained demand for Canadian crude in the U.S. market and underscores the project’s strategic significance in meeting long-term energy needs. The company’s efforts to secure commitments from multiple customers indicate a positive outlook for the Prairie Connector project, although a definitive investment decision is yet to be made.