Why it may not be easy to restart the Keystone XL pipeline

President-elect Donald Trump is reportedly planning to take steps aimed at restarting the Keystone XL pipeline once he takes office in a rebuke of President Biden's decision to terminate it at the outset of his term, though the process of reviving the project may prove challenging.

The Keystone XL pipeline was intended to run from Alberta, Canada, into the U.S. passing through Montana and South Dakota to Nebraska. From there, it would carry the oil produced in Canada, Montana and North Dakota to refineries on the Gulf Coast and in Illinois through existing pipeline networks.

It was first proposed in 2008, but quickly faced opposition due to environmental and climate concerns. Then-President Barack Obama rejected the project in 2015, and Trump reversed that decision when he took office in 2017 to allow it to proceed. However, Biden canceled the pipeline's permits after taking office in 2021.

"It's kind of sad that this company that invested billions of dollars in these pipelines and really got messed around by our government because the Keystone pipeline became a metaphor for the green movement versus oil," Phil Flynn, FOX Business Network contributor and Price Futures Group senior account executive, said in an interview.

TRUMP SLAMS BIDEN FOR CANCELING KEYSTONE XL PIPELINE IN FREEWHEELING MUSK INTERVIEW

Trump regularly criticized Biden's decision during the 2024 campaign and said during his wide-ranging interview with supporter-turned-adviser Elon Musk that "I allowed it in my first week because it was jobs and it moved oil. And by the way, in a much more environmentally friendly way, it's underground, it's not a truck that catches on fire or a train that catches on fire."

Trump could take executive actions aimed at clearing the path for the project's resumption once he returns to the Oval Office, given the potential for job creation and promoting energy security.

An Energy Department report from December 2022 compiled the findings of various studies of the proposed project's impact, determining it would've created between 16,149 and 59,000 jobs and generated an economic impact of $3.4 billion to $9.6 billion. A prior report from the federal government published in 2014 found that 3,900 direct jobs and 21,050 jobs would be created during the anticipated two-year construction process.

EX-KEYSTONE XL PIPELINE WORKER 'ON CLOUD NINE' AS TRUMP REPORTEDLY PLANS TO REVIVE THE PROJECT

However, the original owner of the Keystone XL pipeline project, TC Energy, removed some of the pipeline that had been constructed in anticipation of the project continuing following Trump's 2017 approval. 

"A lot of the infrastructure that was in place, some of it is still in place, some of it isn't in place," Flynn said. "Some of the steel has been sold and so to start this particular pipeline, it will take a lot of work, and they still, even though there were pre-approvals, because they have to rebuild parts of the pipeline they may have to go through the local approval process again, so it could be kind of a struggle."

TC Energy recently spun off its oil pipelines business to a new company, South Bow, which hasn't indicated whether it will attempt to restart the Keystone XL project.

"South Bow supports efforts to transport more Canadian crude oil to meet U.S. demand," the company told FOX Business in a statement. "South Bow's long-term strategy is to safely and efficiently grow our business."

FORMER ENERGY SECRETARY RICK PERRY SLAMS BIDEN-HARRIS ADMIN'S ENERGY POLICIES

Regardless of whether Keystone XL is ultimately restarted, Flynn said that there are likely to be more pipelines built crossing the Canada-U.S. border in the years ahead given the dynamics of the oil market.

"Canada wants to build more pipelines from Canada into the U.S. down to the Gulf Coast and to other areas," Flynn said. "Whether or not we get a reincarnation of this particular pipeline, we're definitely going to see more pipelines come down from Canada."

GET FOX BUSINESS ON THE GO BY CLICKING HERE

Flynn noted Keystone XL or a similar pipeline from Canada would help alleviate a global shortage of diesel fuel that can be refined more efficiently with the use of Canadian oil sands, which are a heavier blend of crude oil than U.S.-produced shale oil.

"If you look around the globe, the supplies of diesel are relatively tight and the world needs more of it," Flynn said, adding that pipelines like Keystone XL would allow Canadian oil to flow into the U.S. "in a more efficient, safe way" that helps alleviate the global supply shortage.

FOX Business' Madeline Coggins contributed to this report.