Canada and US Discussed Potential Revival of Keystone XL Pipeline: Energy Minister

Minister of Energy and Natural Resources Tim Hodgson in the House of Commons on March 10, 2026. The Canadian Press/Spencer Colby

Canadian officials spoke with senior U.S. officials about a proposed revival of part of the cancelled Keystone XL oil pipeline during a meeting in Houston this week, according to Natural Resources Minister Tim Hodgson.

The project, proposed by Calgary-based pipeline company South Bow and its U.S. partner Bridger Pipeline, could increase oil exports to the United States by more than 12 percent, Hodgson said in a March 23 interview at the CERAWeek annual energy conference held this week in Houston, Texas.

Hodgson and Canadian Ambassador to the U.S. Mark Wiseman discussed the proposal, among other topics, with U.S. Energy Secretary Chris Wright and U.S. Secretary of the ⁠Interior Doug Burgum.

Hodgson did not say whether the U.S. administration had decided to support the project, but said the officials are “thoughtfully looking at all of the options to make ​sure the world has the oil it needs to function.”

The proposed Keystone XL Pipeline, which would have transported oil from Alberta to refineries in the U.S. Midwest and Gulf Coast, had its permit revoked by U.S. President Joe Biden in 2021. It was designed to carry about 830,000 barrels per day.

Following his inauguration in January 2025, U.S. President Donald Trump moved to reverse the cancellation of the Keystone XL pipeline project, promising easy regulatory approvals for its resurrection.

Hodgson said in October 2025 that the Liberal government was not set on any particular route for sending more oil to the United States, but would do what it could to help revive the Keystone XL Pipeline.

Hodgson also said during an interview on Bloomberg Television that he pitched increasing natural gas flows to the United States, which would boost LNG exports from the Gulf Coast and meet growing power demand from AI data centres.

“Obviously, a key component of the AI race is building more data centres,“ he said. ”That requires more natural gas. We can provide that gas.”

Since the United States and Israel began their joint attack on Iran on Feb. 28, the Iranian regime has effectively shut down the Strait of Hormuz, affecting around a fifth of all global oil transport and significant volumes of fertilizer. Energy infrastructure of several countries has also been attacked in the fighting, pushing oil prices up to around US$100 a barrel.

Hodgson told reporters on March 11 that Canada would do what it could to help lower down global energy prices, the same day the International Energy Agency, which represents dozens of countries including Canada, announced it had agreed to release 400 million barrels of oil from member countries’ stockpiles.

“We are conscious of the significant affordability impacts energy market fluctuations are having on Canadians at the pumps, and contributions to a more stable market should help alleviate price increases,” Hodgson said in a statement released the same day.

Canada has agreed to contribute 24 million barrels of crude oil to global supply. As a net exporter of energy, Canada does not have emergency oil reserves, so it would take the country’s energy sector about 100 days to meet its pledge to contribute the oil, according to a report by Oxford Economics.

Prime Minister Mark Carney has said Canada can become an “energy superpower” in both conventional and renewable energies. The prime minister signed an agreement with Alberta Premier Danielle Smith in November 2025 that could pave the way for a new West Coast oil pipeline if a private proponent comes forward.

Ottawa and Alberta also reached a tentative agreement on March 6 that would see the province take control of regulatory approvals for major projects to pass them faster.

Reuters and Olivia Gomm contributed to this report.