Two major pipeline developments are putting Canada’s energy relationship with the United States back in the spotlight. President Donald Trump is again promoting the revival of the controversial Keystone XL oil pipeline, while Calgary-based TC Energy has announced approximately C$3 billion in new growth projects focused largely on expanding American natural gas infrastructure.
The announcements come as Canada and the United States navigate difficult trade negotiations, growing energy demand, and questions about future cross-border investment.
However, the two developments are separate. TC Energy no longer owns the Keystone oil pipeline business, and its latest investments are aimed primarily at supplying natural gas to American power generators and industrial customers.
Together, the developments reveal how Canadian energy companies are navigating political uncertainty while pursuing billions of dollars in opportunities across North America.
Trump Brings Keystone XL Back Into Canada-U.S. Trade Negotiations
President Donald Trump renewed his push for the Keystone XL pipeline on November 1, suggesting that the controversial project could become part of a broader trade agreement with Canada. Speaking to reporters in Dubuque, Iowa, Trump said his administration had reached the preliminary concept of an agreement with Prime Minister Mark Carney. He also claimed Canada would finance the construction of a revived Keystone pipeline while the United States would provide the route. His comments immediately revived questions about whether a project cancelled more than five years earlier could return under a different political and economic environment.
Carney described his recent discussions with Trump as constructive, saying officials from both countries would continue negotiating an agreement intended to support jobs and affordability while respecting Canadian sovereignty. However, there was no confirmed financing arrangement or construction agreement for Keystone XL. A November 4 fact-check by The Canadian Press found no evidence supporting Trump’s assertion that Canada would pay the entire cost. The distinction matters because presidential support does not automatically translate into a commercially viable pipeline, particularly when private investors, regulators, and affected communities must also be involved.
Why Keystone XL Is No Longer Simply a TC Energy Project
Keystone XL was originally developed by TC Energy, formerly known as TransCanada, to transport additional Canadian crude oil to American markets. The proposed system would have carried approximately 830,000 barrels of oil per day, creating another major transportation route for Alberta’s oil sands industry. However, years of environmental opposition, Indigenous concerns, and political disputes complicated its development. Former U.S. President Joe Biden revoked the project’s presidential border-crossing permit in January 2021, and TC Energy subsequently terminated the project. The cancellation left previously installed infrastructure unused and raised questions about the future of major cross-border oil investments.
A significant corporate restructuring has since changed the situation. In October 2024, TC Energy separated its liquids pipeline business into an independent company called South Bow Corporation. South Bow now oversees the existing Keystone system and is pursuing a different proposal known as Prairie Connector. That project would reuse approximately 150 kilometres of previously installed Keystone XL pipeline in Canada while constructing additional infrastructure to connect Canadian crude production with American transportation networks. The original Keystone XL proposal therefore remains cancelled, even though a related transportation corridor could eventually support a new development. This ownership change explains why TC Energy’s latest investment announcement should not be interpreted as financing a Keystone XL revival.
TC Energy Announces C$3 Billion in New American Natural Gas Investments
On November 5, TC Energy announced approximately C$3 billion in newly approved growth projects, reinforcing its strategy of expanding natural gas infrastructure across North America. The investment package includes the Crossroads Expansion, the American Midwest project, and the ANR Optimization project. Unlike Keystone XL, these developments focus on transporting natural gas rather than crude oil. Much of the investment is directed toward existing pipeline networks that supply major American electricity markets. The company expects increased demand from power generators, manufacturing operations, and data centres to support these investments over the coming years.
The distinction is particularly important because TC Energy’s announcement does not represent a renewed financial commitment to Keystone XL. Its flagship Crossroads Expansion carries an estimated cost of US$1.8 billion, while the related American Midwest development has a total estimated cost of US$400 million. A smaller ANR Optimization project is estimated at approximately US$100 million. These are planned project costs rather than money already spent, and some involve shared ownership or financing arrangements. TC Energy’s focus is on expanding commercially supported infrastructure that can generate long-term transportation revenue, rather than committing capital to a politically contested crude oil pipeline.
Growing U.S. Electricity Demand Is Driving the Pipeline Expansion
American electricity consumption is becoming an increasingly important opportunity for natural gas pipeline operators. The U.S. Energy Information Administration forecast in September that electricity generation would increase 2.2% in 2026 and another 1.7% in 2027, driven partly by data centre construction and expanding manufacturing activity. TC Energy expects natural gas demand in the U.S. Midwest, including consumption associated with data centres, to increase by more than five billion cubic feet per day by 2035. Its Crossroads Expansion would add approximately 1.4 billion cubic feet of daily transportation capacity, while the connected American Midwest project would add another one billion cubic feet per day through the Northern Border pipeline system.
Both developments are expected to enter service in 2030 and are supported by long-term commercial agreements. TC Energy says the projects are underpinned by 20-year take-or-pay contracts, which require customers to make agreed payments for transportation capacity even if they do not use their full allocation. These arrangements provide greater revenue visibility and help reduce the financial uncertainty associated with major infrastructure investments. For electricity providers trying to secure dependable fuel supplies, the additional connections could improve access to natural gas from different producing regions. However, the projects still face construction, cost, and demand risks, particularly if the pace of American electricity infrastructure development changes before the pipelines begin operating.
TC Energy Is Also Expanding Infrastructure in Canada
Beyond its two largest American expansion projects, TC Energy has approved the ANR Optimization project, an estimated US$100-million investment intended to increase natural gas transportation service by approximately 300 million cubic feet per day. The development is designed to support electricity producers converting generating capacity from coal to natural gas, with operations expected to begin in 2029. Although smaller than the Midwest projects, the expansion reflects the company’s broader strategy of improving existing infrastructure rather than relying exclusively on expensive new transportation corridors. It also highlights how changes in electricity generation can create opportunities for pipeline operators.
Meanwhile, TC Energy separately announced the C$4.9-billion Coastal GasLink Phase 2 expansion in British Columbia. This project is distinct from the C$3-billion package of new growth investments and is intended to support increased Canadian liquefied natural gas exports. The expansion will add five compressor stations and associated modifications, increasing transportation capacity by approximately two billion cubic feet per day to a total of about 4.5 billion cubic feet per day. Construction is expected to begin in early 2027, with service anticipated in the early 2030s. The company says Coastal GasLink has secured project-level financing of up to C$3.3 billion, limiting the amount TC Energy must contribute directly.
Strong Financial Results Give TC Energy Room to Invest
TC Energy’s latest financial performance helps explain why the company is prepared to commit additional capital to its pipeline network. For the third quarter of 2026, the Calgary-based company reported comparable earnings of C$0.94 per share, exceeding the C$0.86 analysts had expected. Comparable earnings before interest, taxes, depreciation, and amortization reached approximately C$3 billion, compared with C$2.65 billion during the same quarter in 2025. Its American natural gas pipeline operations were especially strong, generating approximately C$1.25 billion in comparable EBITDA, an increase of more than 17% from a year earlier. Canadian natural gas pipeline operations also recorded growth.
Following those results, TC Energy raised its full-year 2026 comparable EBITDA forecast to between C$11.8 billion and C$12 billion, up from its previous range of C$11.6 billion to C$11.8 billion. The company also projected C$12.3 billion to C$12.5 billion for 2027 and outlined expectations for annualized comparable EBITDA growth of 5% to 7% through 2031. Management says approximately C$6 billion in growth projects have been sanctioned so far in 2026, with additional potential developments under consideration. These projections are not guaranteed, but they illustrate why the company is emphasizing long-term contracted infrastructure and predictable earnings at a time when political uncertainty continues to complicate some energy investments.
Prairie Connector Has Customers, but Major Hurdles Remain
Although Keystone XL remains cancelled, South Bow’s Prairie Connector proposal has made meaningful commercial progress. In its November 4 financial update, South Bow confirmed that nine customers had signed binding 20-year transportation commitments covering 465,000 barrels of crude oil per day. The proposed Canadian pipeline would extend approximately 530 kilometres from Hardisty, Alberta, to the American border, combining 380 kilometres of new construction with roughly 150 kilometres of previously installed Keystone XL infrastructure. From there, Bridger Pipeline’s proposed American expansion would move oil toward Wyoming, while another planned connection, known as Liberty Bridge, would link the system to Cushing, Oklahoma.
Trump granted a presidential border-crossing permit to Bridger Pipeline Expansion in April 2026, providing an important regulatory authorization. However, that approval does not eliminate the remaining obstacles. South Bow says it is still working through regulatory requirements, land acquisitions, construction planning, financing alternatives, and consultations with Indigenous and Tribal Nations and other affected communities. The company is targeting a final investment decision in mid-2027, meaning construction is not yet guaranteed. It is also seeking stronger assurances that its permits cannot easily be reversed by a future administration. These concerns demonstrate why a presidential endorsement, while politically significant, cannot replace the commercial and regulatory commitments needed to build a major oil pipeline.
Canada’s Energy Future Depends on More Than Trump’s Pipeline Promises
The debate surrounding Keystone XL reflects Canada’s continued dependence on American energy markets. According to the Canada Energy Regulator, Canada exported approximately 4.3 million barrels of crude oil per day in 2025, representing about 80% of national production. Roughly 90% of those exports went to the United States. Although the expanded Trans Mountain pipeline has helped diversify access to overseas buyers, American refineries remain overwhelmingly important customers for Canadian producers. The share of Canadian crude exports reaching destinations outside the United States increased from approximately 2% in 2021 to 10% in 2025, illustrating progress toward diversification while highlighting the scale of the remaining dependency.
TC Energy’s latest investments demonstrate another side of Canada’s evolving energy relationship with the United States. Instead of expanding crude oil transportation, the company is directing billions toward natural gas infrastructure supported by American electricity demand. Its separate Coastal GasLink investment also supports access to international liquefied natural gas markets. These projects could strengthen transportation capacity and create economic opportunities, although their ultimate benefits will depend on construction costs, energy demand, environmental requirements, and regulatory decisions. Trump’s Keystone comments may generate political momentum, but the company’s C$3-billion announcement represents a different, commercially driven development. For Canada’s energy industry, the larger challenge remains balancing access to its biggest customer with the need for diversified markets and dependable long-term investment.
