Trump Rekindles Keystone XL Pipeline Debate Amid US-Canada Trade Talks

US President Donald Trump has been vocal about reviving the Keystone XL oil pipeline project. The proposed pipeline, which was initially rejected by former President Barack Obama's administration and revived by Trump during his first term, would have carried 830,000 barrels per day of oil from Alberta to Gulf Coast refineries. However, construction work on the original pipeline was never completed after President Joe Biden revoked a key permit in 2021.

The company behind Keystone XL, Canada's TC Energy, lost billions when the pipeline was canceled and later spun off its crude pipelines business into a new entity called South Bow to focus on natural gas. Despite this, forecasts for increased Canadian oil production led South Bow to propose a new pipeline project called Prairie Connector in partnership with Bridger Pipeline.

The 550,000-barrel-per-day Prairie Connector project would run from Alberta to Wyoming and use some of the Keystone XL pipe installed on the Canadian side before it was canceled. South Bow has said it will decide whether or not to proceed with the project in 2027, pending proof that a US presidential permit is 'durable.'

Trump's comments about reviving the pipeline have sparked attention in the midst of US-Canada trade talks. Canadian Prime Minister Mark Carney reportedly raised the potential revival of the project as an area of cooperation between the two countries during trade talks last October, but the talks stalled for months.