Trump boasts Keystone XL as trade talk win. It’s not clear it was ever off the table.

Keystone XL, which could bring more than 800,000 barrels of additional oil from Alberta to the U.S., was proposed almost 20 years ago. But after years of challenges from U.S. landowners, Indigenous leaders in both countries, and environmental groups, former U.S. president Joe Biden killed it by revoking a key U.S. permit in 2021.

Almost a year ago, Prime Minister Mark Carney raised with Trump the prospect of reviving the project, as part of a larger pitch to link energy co-operation and support for Canada’s steel and aluminum sectors. Experts say Trump might need this win politically with the U.S. midterms around the corner — even though Trump already signed an executive order in April to approve a new pipeline which would utilize existing portions of the abandoned Keystone project.

Canadian government officials would not comment Wednesday on what — if anything — has changed regarding Keystone’s place in negotiations since Carney first pitched it, or why Trump is suddenly highlighted it as prominently as he did.

But since that October pitch, gas prices in the U.S. have soared by more than US$1 per gallon from a year ago amid the ongoing war in Iran. The U.S. strategic petroleum reserve this month hit its lowest level since 1983.

Jay Khosla, executive director of economic and energy policy with the Public Policy Forum and a former assistant deputy minister in the Privy Council Office, said the combination of rising gas prices and the draining of the oil reserve could be an “Achilles heel” to Trump.

“(Trump is) definitely watching that, and he’s definitely watching the fact that Canadian oil is reliable and runs their economy,” Khosla told The Canadian Press.

“You don’t ever hear Americans saying that. They consistently talk about energy dominance. What they don’t talk about is that they are not energy dominant without Canadian source supply. And I think (Trump) knows that for sure.”

One-fifth of the oil used every day by the United States comes from Canada — which also accounts for more than half of what the U.S. imports, according to figures from the U.S. government’s Energy Information Administration.

The Keystone XL pipeline was first approved by Canada’s energy regulator in 2010. The pipeline would have expanded an existing pipeline delivering crude from Hardisty, Alta., to refineries in the U.S. Midwest and provided a direct route to the world’s biggest refining complex on the Texas coast.

Former president Barack Obama nixed the pipeline, twice, only to have Trump reinstate its permit during his first term. Biden pulled the plug on the pipeline again on his first day in the White House in 2021, frustrating Canadian officials — especially in Alberta which had invested more than $1 billion into the project.

In his second term, Trump has said repeatedly he wants to revive Keystone XL. In April, he signed an executive order to approve a new project to Montana and Wyoming, which would utilize some parts of Keystone XL already built on the Canadian side.

The existing system is now owned by South Bow Corp., which was spun off in late 2024 from TC Energy.

South Bow had earlier said it “moved on” from the contentious Keystone XL proposal, but that it would “continue to explore opportunities that leverage our existing corridor.” The company is partnering with U.S. based Bridger Pipeline on the new project Trump approved earlier this year.

“I think it’s not a surprise that (Trump) seems to be sticking with this,” said Adam Fremeth, the associate director of Energy Policy Management Center at Western University’s Ivey Business School.

“I think on the other side is that the economics of it have changed, that you actually have an American company that’s pursuing this. At the same time, conflicts, like we see in the Strait of Hormuz, have brought some issues around energy security. And so this allows President Trump to further reinforce the energy security in the U.S.”

Khosla said from the Canadian side, the move preserves Canada’s important trade relationship with the United States

“It is probably the most integrated framework that you could see anywhere in the world in terms of trade and in terms of security. And so when I think about Keystone XL in that context, it is integral,” Khosla said.

“It’s always been integral in my mind to strengthen that facet and to strengthen our relationship in terms of two-way trade.”

This report by The Canadian Press was first published Aug. 19, 2026

— With files from Lauren Krugel in Calgary

Nick Murray, The Canadian Press

by The Canadian Press

Trump boasts Keystone XL as trade talk win. It’s not clear it was ever off the table.

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