Trump's Keystone XL Revival Sparks Pipeline Debate in US-Canada Trade Talks

U.S. President Donald Trump has reignited debate over the Keystone XL oil pipeline, saying it 'may be awoken from the grave' in a social media post. The project was initially proposed to carry 830,000 barrels per day of oil from Alberta's oil sands to U.S. refineries via a 1,900 km pipeline. Although construction began, President Joe Biden revoked a key permit for the U.S. stretch of the project in 2021, effectively canceling it.

The company behind Keystone XL, TC Energy, lost billions when the project was canceled and later spun off its crude pipelines business into South Bow to focus on natural gas. However, Trump's recent posts have revived hopes for the pipeline's revival, with some forecasting increased Canadian oil production leading to a new proposal, Prairie Connector, which would run from Alberta to Wyoming using some of the Keystone XL pipe.

South Bow will decide whether to proceed with Prairie Connector in 2027, but only if they receive 'durable' proof that a U.S. presidential permit is granted. The pipeline's potential revival has been discussed as part of U.S.-Canada trade talks, which stalled for months before Trump gave Canada a three-day reprieve on more tariffs.