Why Trump Is Talking About Keystone XL Pipeline

• TC Energy lost billions when Keystone XL was canceled and later spun off its crude pipelines business into South Bow, which now proposes the Prairie Connector project using some existing Keystone XL pipe
• Prairie Connector would run from Alberta to Wyoming with 550,000 barrels per day capacity, with a decision on whether to proceed expected in 2027 pending assurance of a stable U.S. presidential permit
• Canada exports over 90% of its crude oil production to the U.S., making pipeline infrastructure a strategic issue in ongoing trade negotiations where Trump has threatened tariffs

Summary: Trump Revisits Keystone XL Pipeline Amid US-Canada Trade Negotiations

President Donald Trump's recent social media posts suggesting the Keystone XL pipeline "may be awoken from the grave" have drawn attention during ongoing US-Canada trade discussions.

Project Background

Keystone XL was a proposed 1,900-kilometer crude oil pipeline designed to transport 830,000 barrels per day from Alberta's oil sands to Cushing, Oklahoma, and Gulf Coast refineries. The project was rejected under President Obama, revived during Trump's first term, but ultimately canceled when President Biden revoked its permit in 2021. Construction had begun but was never completed.

Key Companies

Canada's TC Energy, the original developer, lost billions when the project was canceled and subsequently spun off its crude pipeline business into a new entity called South Bow to focus on natural gas. South Bow has since proposed the Prairie Connector project—a 550,000-barrel-per-day pipeline from Alberta to Wyoming that would utilize some previously installed Keystone XL pipe. South Bow, partnering with a US company, plans to decide on Prairie Connector's future in 2027, contingent on securing a stable US presidential permit.

Market Context

Canada is the world's fourth-largest oil exporter, sending over 90% of its crude production to the US, where many refineries depend on Canadian heavy oil.

Trade Implications

Canadian Prime Minister Mark Carney reportedly raised the pipeline's potential revival during trade talks with Trump as a cooperation opportunity. Trump's Keystone-related posts coincided with announcing a three-day tariff extension and subsequent trade deadlines, suggesting the pipeline has become a bargaining chip in bilateral negotiations.