Canadian Prime Minister Mark Carney raised the prospect of reviving the contentious Keystone XL pipeline project with U.S. President Donald Trump during his White House visit this week, a government official familiar with the matter said Wednesday.
A Canadian company pulled the plug on it four years ago after the Canadian government failed to persuade then-President Joe Biden to reverse his cancellation of its permit on the day he took office. It was to transport crude from the oil sand fields of western Canada to Steele City, Nebraska.
Trump previously revived the long-delayed project during his first term after it had stalled under the Obama administration. It would have moved up to 830,000 barrels (35 million gallons) of crude daily, connecting in Nebraska to other pipelines that feed oil refineries on the U.S. Gulf Coast.
The Canadian government official said Trump was receptive to the idea when it was talked about during their White House meeting Wednesday. The official said Carney linked energy cooperation to Canada’s steel and aluminum sectors, which are subject to 50% U.S. tariffs. The official spoke on condition of anonymity as they were not authorized to speak publicly on the matter.
Carney mentioned building major projects and “unleashing Canadian energy” in a live video call with business leaders in Toronto on Wednesday.
Biden canceled Keystone XL’s border crossing permit in 2021 over longstanding concerns that burning oil sands crude could make climate change worse and harder to reverse.
A spokesperson for South Bow Corp., the oil pipeline operator that owns the existing Keystone pipeline system, said they are not privy to the ongoing discussions between the Canadian and U.S. governments.
“South Bow is supportive of efforts to find solutions that increase the transportation of Canadian crude oil. We will continue to explore opportunities that leverage our existing corridor with our customers and others in the industry,” the spokesperson said in an email.
Carney is under pressure from the oil-rich province of Alberta to get a pipeline built.
Former Alberta Premier Jason Kenney said building a new pipeline to increase oil shipments to the U.S. Gulf Coast would be the cheapest, fastest, and least complicated route for a major oil pipeline.
“Strategically, this would increase, not decrease our dependance on the US export market. But it would be a brilliant judo move to find common ground with the Trump Administration, and help him to realize that the US benefits from and needs its privileged relationship to Canada, and access to our resources,” Kenney posted on social media.
“Played smartly, Canada’s cooperation could be strong leverage to push for reductions in Trump tariffs,” he added.
Carney mentioned Wednesday in the call that tariffs on Canada’s aluminum exports are not wise, noting the country provides 60% of the aluminum the U.S. needs.
“For the U.S. to produce that much aluminum, it would need the equivalent of the energy of 10 Hoover Dams,” Carney said. “Is making aluminum really the first best use of that power at a time when you’ve got the AI revolution, and you’re reassuring manufacturing that you want to keep people’s electricity costs down at home.”
Carney also reiterated that Canada’s relationship with the U.S., which led to increasing integration over many years, has changed.
“Our relationship will never again be what it was,” Carney said. “We understand America first.”
—Rob Gillies, Associated Press