President Donald Trump cleared away the federal obstacles for the long-debated Keystone XL pipeline project on his first day in office.

But for now, the move appears to be more about making a statement than re-starting construction, especially after the new president bad-mouthed Canada’s status as an economic partner in an ongoing trade dispute.

Immediately after winning the election in November, members of Trump’s team began leaking to the media that the president-elect planned to rescind President Joe Biden’s executive order that stopped construction on the pipeline.

Trump believed the move would drive the pro-oil message of his campaign, Politico reported, and the president followed through on his first day in office Jan. 20.

In his “Unleashing American Energy” executive order, Trump rescinded 12 Biden administration executive orders.

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At the top of the “revoked” list? Executive order 13990, signed on Biden’s first day in office in 2021. The order barred further Keystone construction and made Alaska’s arctic refuge off-limits for drilling. On Jan. 20, Trump reversed his predecessor’s policy.

However, energy sector expectations that work would resume were quiet muted on both sides of border, as the president turned up the volume in an ongoing trade spat.

While pledging to remove barriers for Keystone, Trump had also threatened to implement a 25% tariff on Canadian and Mexican goods in his first day in office. The president has made multiple complaints against Canada, saying the country needs to enforce its border to prevent drug trafficking, among other reasons.

After his inauguration, Trump demurred on tariffs to conduct a study but has kept the tension high.

“We don’t need (Canada’s) oil and gas. We have more than anybody,” Trump said Jan. 23 in a remote presentation to the World Economic Forum in Davos, Switzerland.

On the Keystone pipeline, the Canadian company responsible for the project has not shown interest in another go-round.

Trans Canada, now called TC Energy Corp., announced plans for a pipeline carrying 830,000 bbl/d during the George W. Bush administration in 2008. The Keystone XL project become a political ping-pong during President Barack Obama’s two terms, before the administration shut it down in 2015.

Trump revived the project during his first term in 2017 but added the stipulation that the sections built in the U.S. had to be made with American steel, starting a spat with contractors.

Additional legal hurdles in Nebraska also slowed construction before Biden canceled the project upon taking office in 2020.

Today, a revitalized Keystone XL project is not shovel-ready.

TC Energy disowned the project when it split off its pipeline assets into a new company, South Bow, in 2024.

The vast majority of the infrastructure put in place during construction has been removed, and the lease agreements have expired. Revamping the project would therefore mean starting mostly from scratch.

South Bow has shown no interest in the project. In June 2024, Bevin Wirzba, the company’s CEO, told Bloomberg that South Bow had “moved on” from the pipeline expansion.

"South Bow is engaging with customers to develop options that utilize our existing infrastructure and corridor to enhance energy security by increasing Canadian crude oil supplies to meet growing U.S. demand," said Katie Stavinoha, South Bow communications leader for external relations.

However, not all of the conversation from Canada has been negative.

Following the inauguration, Alberta Premier Danielle Smith, told the Washington Free Beacon that her province needs more pathways to export crude and is open to talks on re-starting the project.

“Whether it's a Keystone 2.0 or something else, I'm looking forward to starting those conversations in earnest once the [U.S.] interior secretary is sworn in," Smith said. 

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