By Amanda Stephenson
CALGARY, Aug 21 (Reuters) – A social media post by U.S. President Donald Trump declaring that the Keystone XL oil pipeline “may be awoken from the grave” attracted attention this week in the midst of U.S.-Canada trade talks. Below is a look at the history of that project running through parts of Canada and the U.S., as well as details on the new oil pipeline proposal that follows a slightly different route:
WHAT IS KEYSTONE XL?
Keystone XL was a proposed crude pipeline, roughly 1,900 km (1,181 miles) long, which would have carried 830,000 barrels per day of oil from the oil sands of northern Alberta to the major U.S. storage hub at Cushing, Oklahoma, and then on to Gulf Coast refineries.
The project, which was opposed by many environmental and Indigenous groups, was rejected by U.S. President Barack Obama’s administration and revived by Trump during his first term. Though construction work had started, the pipeline was never completed after U.S. President Joe Biden revoked a key permit for the U.S. stretch of the project in 2021.
WHICH COMPANIES ARE INVOLVED?
The company behind Keystone XL, Canada’s TC Energy, lost billions when the pipeline was canceled. It later spun off its crude pipelines business into a new entity, South Bow, so that it could focus on natural gas instead.
But Trump has been vocal about wanting to see the Keystone expansion built. Canada, the world’s fourth-largest oil exporter, sends more than 90% of its crude oil production to the U.S., and many U.S. refineries are dependent on Canadian heavy oil.
While South Bow previously said it had “moved on” from the Keystone project, forecasts for increased Canadian oil production led the company earlier this year to propose a new pipeline project called Prairie Connector.
The 550,000-barrel-per-day project, which South Bow is working on in partnership with U.S. company Bridger Pipeline, would run from Alberta to Wyoming and would use some of the Keystone XL pipe that had been installed on the Canadian side of the border before that project was canceled.
South Bow has said it will decide whether or not to go ahead with Prairie Connector in 2027. The company’s CEO has said he needs proof that a U.S. presidential permit is “durable” before proceeding. South Bow declined to comment on Trump’s recent posts.
WHAT ROLE DOES THE PIPELINE HAVE IN TRADE TALKS?
Reuters reported Canadian Prime Minister Mark Carney raised a potential revival of the project during trade talks with Trump last October, presenting it as a possible area of cooperation between the two countries. Trade talks then stalled for months. Trump posted a meme about Keystone shortly after announcing late on Tuesday night he had given Canada a three-day reprieve on more tariffs.
He posted the meme again ahead of a new midnight deadline to reach a deal.
(Reporting by Amanda Stephenson in Calgary; Editing by Caroline Stauffer and Sanjeev Miglani)
