President-elect Donald Trump repeatedly said he would resurrect the Keystone XL Pipeline on the campaign trail, pumping up the cross-border project as a boon for big energy and a must-have for the United States.

However, is the controversial pipeline something that could really come to fruition or just another pipe dream?

Chris Wright, Trump’s pick for energy secretary, told Barron’s that restarting the ambitious pipeline was one of the most important things the government could do to boost energy supplies.

“Number one, restore the Keystone Pipeline,” said Wright, chief executive of Liberty Energy, a Denver-based fracking company. “It’s already been through an exhaustive environmental review. Canada is probably the second biggest country that could grow its oil and natural gas production. It’s just limited by access to markets. Build that pipeline, restore some confidence in Canada, and in the U.S. industry.”

Despite the push from Trump and Wright, restarting the venture could be extremely difficult and costly. Then there’s the delicate process of trying to convince people to get excited about a pipeline that has been litigated ad nauseam and turned their world upside down in the past. 

Skeptical locals

Entire rural communities, which were promised investments in schools, businesses, and hospitals, have been jerked around by multiple administrations for nearly two decades. Workers on the pipeline, some who uprooted their entire families, were told they’d get a steady paycheck and pension only to find themselves having to learn entirely new skillsets or retiring altogether. 

“Our local was a big pipeline local,” Peter Bardeson, the business manager for the Laborers’ Local 620 union in Sioux Falls, South Dakota, told the Washington Examiner. “Once the administration put a war on domestic oil and natural gas, as time progressed, the boomers all retired. I lost 100 pipelines.”

“The Local 620 here in South Dakota was really hard hit,” he added. “The people who invested their money, you talk to them, what it was going to do for small businesses and entrepreneurs and what have you … but, it devastated us also.”  

The U.S. has made hairpin turns in its approach to environmental regulations and pipeline projects over the years. The pattern has grown more extreme as the political landscape becomes more polarized and is showing no signs of letting up now that Trump is heading back to the White House.

At stake is not only the massive, multibillion-dollar Keystone XL Pipeline but also the country’s relationship with Canada, the fate of thousands of workers, and residents who have been used by their government as political pawns.

The pipeline was first proposed in 2008. Since then, it has become a cautionary tale of what happens when economic development, climate change, and politics face off. 

Political ping-pong

In 2015, former President Barack Obama’s administration rejected the pipeline on environmental grounds. In 2017, Trump revived it. During his first term, construction on the cross-border collaboration began following a $1.1 billion cash infusion by the government of Alberta to jump-start the project. However, less than a year later, it was once again stopped in its tracks after President Joe Biden denied a key permit on his first day in office. At the time, he said his denial was over long-standing concerns that burning oil sands crude could have a devastating effect on climate change.  

Canadian Prime Minister Justin Trudeau objected to the move, which, for a while, raised tensions between the U.S. and its northern neighbor. Officials in Alberta, where the pipeline originated, also turned on Trudeau, expressing frustration that he didn’t push Biden hard enough to reinstate the pipeline’s permit. 

In June 2021, TC Energy, the Calgary-based sponsor of the Keystone XL Pipeline, said it was calling it quits. TC Energy said it would work with government agencies “to ensure a safe termination of and exit” from the partially built line. 

“We remain disappointed and frustrated with the circumstances surrounding the Keystone XL project, including the cancellation of the presidential permit for the pipeline’s border crossing,” then-Alberta Premier Jason Kenney said in a statement. 

People in places such as South Dakota, where the pipeline would go through, were devastated. Construction was abandoned, jobs were cut, shops closed, and residents were left in the cold. Today, many of the people burned by politics said they were apprehensive about a pipeline restart. 

“We’re hurting,” Laurie Cox, the owner of Stroppel Hotel in Midland, South Dakota, recently told the Washington Examiner. Cox’s hotel was home to welders, carpenters, and union laborers who were tied to the pipeline project. She has since seen her profits evaporate and said she had to subsidize the costs of the hotel out of her own pocket. She is now considering working with a nonprofit. Cox isn’t alone. Similar scenes have played out across the states the pipeline was supposed to go through. 

If all had gone as planned, the 1,700-mile pipeline would have carried 830,000 barrels of oil a day from Alberta to the Texas Gulf Coast, passing through Montana, Nebraska, Kansas, and Oklahoma.

In South Dakota, the pipeline would have run diagonally across nine counties, from the northwestern corner to Tripp County in south-central South Dakota. Despite claims that the pipeline would be built on sacred ground, the proposed pipeline would not run directly through any Native American reservations in the state but would have bordered the Cheyenne River Reservations to the south and Pine Ridge and Rosebud reservations to the north.

The pipeline was supposed to bring economic prosperity to Harding, Butte, Perkins, Meade, Pennington, Haakon, Jones, Lyman, and Tripp counties. However, instead of hope, it brought heartache and drove some families to the brink of financial ruin.

Today, people such as Cox and Bardeson find themselves in a familiar place, as rumors that the pipeline could be revived have once again started to take shape.

“I am apprehensive to let myself get excited about President Trump’s promise,” Cox said. “The pipeline crews would bring much needed business to the area, again.  Some businesses have shut down, others sold, and many are holding on by a thread. Is it possible? Yes. Is it probable?  I do not know.” 

Significant roadblocks are ahead that will lessen the pipeline’s probability. 

Pipeline problems

For one, parts of it have already been dug up and sold off. 

In November, water company Cadiz announced plans to buy 180 miles of steel pipe from the terminated project and repurpose it for a new water delivery pipeline. The steel will connect the company’s groundwater bank in California’s Mojave Desert to other water networks across the Southwestern parts of the U.S. Construction is slated to start next year. 

“Repurposing fossil fuel infrastructure to deliver clean water to underserved communities is core to our mission.” Cadiz CEO Susan Kennedy said in a written statement. “Securing this steel will enable the company to bring this critical infrastructure online faster and more efficiently.” 

David Archambault II, former tribal chairman of the Standing Rock Sioux Tribe, applauded the decision to sell off steel from the pipeline.

“The steel from the Keystone pipeline has found a new purpose — now transporting what gives life to everything: water,” he said. 

Another problem is that TC Energy no longer owns the pipeline system that the XL was intended to complement. TC Energy spun off its oil pipelines business to a new company, South Bow, which has not indicated whether it would attempt to restart the multibillion-dollar project. 

Replacing the pipeline that has already been dug up would also require any company that wants to rebuild to go through the cumbersome process of obtaining local permits. With that comes pushback and likely large-scale protests from environmentalists and local Native American tribes who have repeatedly vowed to fight to protect the land. 

James Coleman, a law professor at the University of Minnesota, said a revamped Keystone XL project could be tied up in lengthy court battles like it had been in the past. 

“Different courts have taken different approaches on those claims, so they might not be as successful this time, or maybe they’ll have the same success,” Coleman said.

The Canadian government is also hesitant about backing the pipeline. 

Alberta Premier Danielle Smith said she’s interested in exploring ways to export oil to the U.S. but won’t put more public dollars into the Keystone XL effort. 

“We’re looking to make connections with the United States, to see their appetite for assisting in helping to get more product going into the United States,” Smith said. “Maybe de-risking the project involves having an American partner, an American pipeline company, partner with our companies here. We just don’t think the best way of doing it is putting government dollars into it, but we think there are other things we can do to change the risk profile.”

The economic case for sending Canadian crude to the Gulf Coast via the pipeline is also less attractive because U.S. oil output has surged to record levels. Canada’s shipments of oil to the U.S. have also reached record levels this year, but those barrels have been moved through a recently built link to the West Coast. 

Then there’s the matter of Trump’s threat of imposing a 25% tariff on Canadian exports, which would clobber the country’s energy industry, whose No. 1 export market is the U.S.

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Dennis McConaghy, a former TC Energy executive who was involved in the pipeline’s original plans, told Canada’s CBC that it’s “nonsensical to be advocating revival of XL while hanging these tariffs over Canada.”

For now, people such as Cox are in a holding pattern of uncertainty. Again.