Trump Aims to Restart Keystone XL, Industry Seeks Alternative Routes to Bypass the “Hot Potato” Label

(1) Trump stated that the US and Canada are about to reach a trade agreement to avoid new tariffs and hinted that the Keystone XL project could be restarted. He has signed a permit allowing the pipeline to cross the border in Montana, but the White House declined to comment on the pipeline plans. Canadian Prime Minister Carney discussed energy cooperation with Trump last autumn, including the potential restart of Keystone XL. (2) Developers are planning three alternative pipelines to transport heavy crude from western Canada to refineries on the Gulf Coast, serving the same function as Keystone XL but avoiding its controversial name, and even planning to use parts of the shelved Keystone project’s facilities. Original initiator TC Energy has spun off its pipeline business to form South Bow, with executives stating that “the policy environment is now more constructive,” and they expect to make a final investment decision on the key pipeline by mid-next year. (3) The alternative routes still need to pass through state regulatory agencies and court reviews, with opponents concerned about oil spills and environmental damage. Analysts point out that “the pressure point is in Montana, not Washington.” Since its proposal in 2008, Keystone XL has faced a decade of legal challenges and was ultimately canceled by Biden in 2021. Now the industry is trying to advance in phases, pursuing the same energy transportation goals in a more low-key way, but continues to face similar political and environmental resistance.