President Donald Trump (R-FL) suggested reviving the cancelled Keystone XL oil pipeline project in a recent social-media post [1].
The potential restart would reverse a Biden-era cancellation and aim to increase U.S. oil supplies. However, the project faces significant regulatory hurdles and skepticism from industry operators who require long-term stability before investing.
Trump mentioned the pipeline while announcing a three-day delay [1] to 50% tariffs [1] on Canadian goods. "We’re going to bring Keystone back," Trump said [2].
The Keystone XL project faced delays for nearly 10 years [1] before it was eventually cancelled. The pipeline was designed to transport crude oil from Canada into the United States, but the project became a focal point of political volatility across two administrations.
Canadian pipeline operators have expressed caution regarding the project's viability. Bevin Wirzba, CEO of South Bow, said the possibility of a restart on May 28, 2024 [3].
"We need a durable U.S. presidential permit before proceeding," Wirzba said [3].
Industry experts note that the project's history of cancellation makes a "durable" permit difficult to guarantee. Former TC Energy executive Dennis McConaghy has also been involved in discussions regarding the viability of the route [1].
While the Trump administration views the pipeline as a tool for energy independence, the requirement for a permanent permit remains a primary obstacle. Operators are hesitant to commit resources to a project that could be halted again by a future change in administration.
“"We’re going to bring Keystone back."”
The revival of Keystone XL is less a matter of engineering and more a matter of legal certainty. Because the project was previously cancelled by executive action, industry leaders like South Bow are signaling that a simple promise is insufficient. They require a permit that cannot be easily overturned by the next administration to avoid the financial risk of another mid-construction shutdown.
