For a pipeline that was officially cancelled more than five years ago, Keystone XL is having an unusual second life.
US President Donald Trump has once again raised the possibility of reviving the long-disputed Canada–US oil pipeline, declaring this week that the project could be “awoken from the grave” as Washington and Ottawa negotiate over trade. The timing is significant: the pipeline has resurfaced just as the two countries are trying to settle broader disagreements over tariffs and energy cooperation.
But there is an important complication. The original Keystone XL project is not simply waiting for someone to switch it back on. Its developer, TC Energy, abandoned the project in 2021 after then-President Joe Biden revoked the permit required for its US section. TC Energy subsequently separated its crude-pipeline business into South Bow, while shifting its own focus toward natural gas.
What exists today is therefore something more complicated: a president talking about Keystone XL while the pipeline industry is developing a successor that looks similar, but is not actually the same project.
A pipeline that never reached the finish line
The original Keystone XL was designed as a roughly 1,900-kilometre route carrying up to 830,000 barrels of crude per day from Alberta's oil sands to the US, with the system ultimately feeding refineries along the Gulf Coast. It became one of North America's most politically contested infrastructure projects, drawing sustained opposition from environmental organisations and Indigenous communities while gaining strong support from the Canadian oil industry and successive Republican administrations.
Trump had revived the project during his first term, but construction never reached completion. Biden revoked the key US permit shortly after taking office in 2021, bringing the project to an end and leaving portions of infrastructure already installed in Canada unused. TC Energy later said the cancellation had cost it billions.
Five years later, Trump's renewed comments have given the old project a fresh political spotlight. But there is little evidence that simply restoring the original Keystone XL route is the industry's preferred path.
Instead, South Bow has been working with US partner Bridger Pipeline on something called the Prairie Connector.
And that is where the story becomes more interesting.
The industry has already drawn a new map
Prairie Connector would take a different route through the United States while making use of some infrastructure left behind by Keystone XL. The proposed system would move up to 550,000 barrels per day from Alberta to Wyoming, using approximately 150 kilometres of Keystone XL pipe that was already constructed on the Canadian side before the project was cancelled.
The US portion proposed by Bridger would run roughly 1,038 kilometres from Montana to Guernsey, Wyoming. But getting the crude to Guernsey is not enough. Wyoming is not itself the final destination for most of the oil, meaning additional connections would be required to reach major refining and storage centres such as Cushing, Oklahoma, and the US Gulf Coast.
That additional infrastructure is one of the project's biggest uncertainties.
South Bow has indicated that it could make a decision on whether to proceed with Prairie Connector in 2027, but the company wants confidence that the cross-border permit would be durable enough to survive future changes in Washington. That concern is understandable for a project that could take years to develop and potentially cross multiple political administrations.
The challenge is not purely political either. New sections could face environmental reviews, opposition from landowners and Indigenous communities, and litigation similar to the battles that surrounded Keystone XL. Analysts have also questioned whether the project can attract enough investment while competing with other Canadian export expansions that may be simpler and cheaper to execute.
So while Trump's comments have revived the Keystone name, the industry's actual strategy appears to be more pragmatic: use what can be salvaged, redesign what cannot, and find a route that has a better chance of getting built.
More than an oil pipeline
There is a larger reason Keystone XL keeps returning to the political conversation.
Canada is one of the world's largest oil exporters, yet more than 90% of its crude production is currently sent to the United States. That dependence has become increasingly uncomfortable as trade relations between the two countries have deteriorated. At the same time, many US refineries rely heavily on Canadian heavy crude, creating a relationship in which both sides have something to gain from keeping the oil flowing.
Canada has therefore been pursuing more options for its crude. The planned expansion of the Trans Mountain system to Canada's Pacific coast is intended to increase westward export capacity, while new and proposed projects could give Canadian producers greater access to markets beyond the United States. Canadian officials have argued that the goal is not necessarily to sell less to the US, but to have more customers elsewhere.
That makes Keystone more than a pipeline debate. It has become part of a much larger conversation about North American energy security, trade leverage and the future direction of Canadian oil exports.
For Trump, reviving the Keystone name can serve a political and strategic purpose. For Canada, another export route could reduce its dependence on a single customer. And for pipeline companies, the challenge is much more practical: finding a project that can secure customers, financing and permits for long enough to actually reach operation.
The irony is that the pipeline Trump wants to “awaken” may not be the pipeline that ultimately gets built.
Keystone XL may have been cancelled, but its infrastructure, its political legacy and the demand it was designed to serve have not disappeared. The next chapter may therefore not be a resurrection of the old pipeline, but a new project built from its remains.
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