U.S. President Donald Trump has hinted at the revival of the Canada-U.S. Keystone XL oil pipeline project, previously abandoned by past administrations. This potential resurrection, mentioned in a recent bilateral trade agreement announcement with Canada, has sparked speculation among industry experts about the underlying motives.
Former executive Dennis McConaghy, formerly with TransCanada Corporation, views Trump’s mention of the Keystone XL Pipeline positively, suggesting it could impact Prime Minister Mark Carney’s upcoming trade decisions. Since imposing tariffs on Canadian goods in 2025, Trump has been vocal about the U.S. not needing Canadian imports, despite exempting certain crucial items like oil from tariffs.
However, experts like Carlo Dade caution against premature excitement over the project’s revival, citing potential political and environmental challenges. They highlight the uncertainties surrounding the timeline for Keystone XL’s completion, especially with potential Democratic leadership changes in the future.
Valérie Beaudoin of the federal government’s Advisory Committee on Canada-U.S. Economic Relations believes that approving Keystone XL could present challenges for Trump, contrasting with the easier path for Carney. The speculation around reviving the project is seen as a direct response to previous administrations’ policies, according to Rory Johnston, founder of Commodity Context.
The Keystone Pipeline System, operated by South Bow Corp., currently transports Canadian and U.S. crude oil to American markets. With the possibility of the Prairie Connector project utilizing sections of the Keystone XL pipeline, South Bow aims to significantly boost Canada’s crude oil exports to the U.S. The company is in the process of finalizing its decision on the project, which could enhance connectivity to refining and export markets in the Gulf Coast region.
