Prime Minister Mark Carney and US President Donald Trump discussed the possible revival of an oil pipeline project linking Alberta to the US during a meeting in Washington on Tuesday, sources familiar with the discussions told the BBC.
Carney raised the issue of the Keystone XL pipeline in a broader conversation about U.S. tariffs on Canadian steel and aluminum, the sources said, adding that Trump was receptive to the idea.
The pipeline was approved in 2010 by Canada's National Energy Board but was blocked by the Obama and Biden administrations.
Back in February, Trump said he wanted it built, although the company behind it said it had “moved on.”
The BBC has approached the White House and the Prime Minister's Office for comment. The Keystone XL discussions were first reported by CBC News.
BBC sources said the call was described as preliminary and Carney and Trump had instructed their teams to continue negotiations in the coming days.
In a statement Wednesday, the prime minister said his meeting with Trump focused on “key trade and defense priorities” and that the two leaders “identified opportunities for significant progress on trade in steel, aluminum and energy.”
Carney's statement did not mention any specific energy projects, including oil pipelines.
The prime minister is under domestic pressure to reach a trade and security deal with the U.S. in the face of high tariffs on key Canadian industries, including a 50 per cent levy on steel and aluminum and a 25 per cent levy on vehicles.
Keystone XL was a planned 1,179-mile (1,897-kilometer) pipeline that would run from the oil sands of Alberta, Canada, to Steele City, Nebraska, where it would join an existing pipeline. It was expected to carry 830,000 barrels of oil per day.
It faced resistance from former President Barack Obama, who refused to issue the presidential permit needed for its development in the US after the Environmental Protection Agency (EPA) advised him not to approve it.
Environmentalists and indigenous groups have also long opposed the project.
Trump later revived plans to build the pipeline during his first term and construction began, but the project was halted after former President Joe Biden revoked permits for its construction on his first day in office.
The pipeline project was owned by Calgary-based TC Energy, which last year spun off its pipeline business into a new company called South Bow.
The company abandoned the project after permits were revoked. It is estimated that billions of dollars were lost on the project, including a C$1.5 billion ($1 billion; £800 million) investment from the Alberta government.
After Trump floated the possibility of reviving it in February, South Bow said it had “moved on” from Keystone XL.
Sources familiar with the situation who spoke to the BBC declined to say whether there was industry interest in reviving the project.
In a statement, South Bow said it is not involved in the ongoing discussions between the Canadian and U.S. governments and added that it “supports efforts to find solutions that will increase the transportation of Canadian crude oil.”
“We will continue to explore opportunities to leverage our existing corridor with our customers and others in the industry,” a South Bow spokesperson said.
News of the pipeline being mooted was welcomed by Alberta Premier Danielle Smith, who told reporters at Wednesday's U.S.-Canada summit in Toronto that she was glad conversations included steel, aluminum and energy.
“This has been our position for a long time,” Smith said. “One of the first things I said to the Prime Minister was that we should not threaten to sell Americans less. We have to promise to sell them more.”
She added that she sees Alberta oil as a key player in a “broader and more complete renegotiation” of the USMCA North American Free Trade Agreement “that will benefit everyone.”
In addition, the Smith government has said it will introduce a pipeline project that would pass through neighboring British Columbia in hopes of finding a private company to support it.
The idea met resistance from British Columbia Premier David Eby, who called it “fictional” and said it would endanger his province's ecosystem.
Bloc Quebecois Leader Yves-François Blanchet also criticized Alberta's oil plans, saying he would condemn any new pipeline from the province as “destroying the environment of the entire planet.”
