Trump Rekindles Keystone XL Pipeline Dreams Amid Trade Talks with Ottawa

U.S. President Donald Trump has expressed his desire to revive the Keystone XL pipeline project, which would transport oil from Alberta's oilsands to the Gulf Coast in the United States.

The project was first proposed by TC Energy (then called TransCanada Corp.) 18 years ago and has been a contentious issue between Canada and the U.S. Trump approved the project in his first term, but Joe Biden cancelled it on his first day as president in 2021, causing an estimated $1.3 billion loss for Alberta.

The new company behind the project, South Bow Corp., has pitched a revised version of Keystone XL that would use about 150 kilometres of existing pipeline segments and connect to a U.S. line built by Bridger Pipeline LLC. The project anticipates securing a final investment decision (FID) by mid-2024.

The Trump administration's push to revive Keystone XL demonstrates the importance of Canadian heavy oil in supplying refineries, particularly in the U.S. Midwest. A trade deal between Canada and the U.S. could help avoid 50% tariffs on certain Canadian industries, which would disproportionately affect provinces with more manufacturing.