The price plunge has buoyed opponents of Canadian oil here who argue that the decline has obliterated the logic supporting the project.
Natural Resources Minister Greg Rickford challenged that argument at a news conference today, standing beside his counterparts from the United States and Mexico.
He responded to a question on the viability of Keystone XL by saying infrastructure projects should be decided on longer-term calculations.
Rickford says the price drop shows the world's economy is still fragile, and that Canadians are not immune to its whims.
The Keystone XL question has gained a new urgency, with the economics shifting rapidly and a presidential decision on the controversial project expected early in the new year.
"This kind of price volatility reminds us how fragile the global economy still is — and for Canada's purposes, how close to home it can still impact us," Rickford said.
"Our investment decisions therefore, the policies of our government, are typically made with a view to long-term — 20- to 40-year — market expectations. We're equally interested in the cost, averaged out, over those times."
President Barack Obama has said greenhouse-gas emissions will guide his decision. With that in mind, project proponents — including the Canadian government — have repeatedly referred to a certain finding from a study by his own State Department.
That study found Keystone XL wouldn't affect greenhouse-gas emissions, because Canadian oilsands extraction would grow at a similar rate, with or without the pipeline — unless two things happened: oil fell below $65-$75 per barrel, and new pipeline plans were blocked everywhere else.
It's all been happening.
Fast-forward 11 months from that January report and, in a turn of events that would have been considered shocking until recently, the price of a barrel of oil is now less than $56, and every major pipeline project from Alberta faces political or legal trouble.
Keystone XL opponents have been drawing attention to that shift. In the last few months, they've begun arguing that the old math no longer applies.
In his opening remarks Monday, Rickford alluded only briefly to the project.
"There are already 70 pipelines safely delivering oil and gas across our borders every day. Naturally, our government thinks that number should grow to 71," he said.
"Keystone XL could obviously help independence in secure sources of crude."
His U.S. counterpart, Ernest Moniz, tiptoed around the Keystone XL question, which is politically sensitive in the U.S. It's expected that Obama will make a decision soon after a Nebraska court rules on the constitutionality of the route, or after the new Republican-dominated Congress forces a bill onto his desk.
The Nebraska decision could come as early as Friday.
What Moniz did speak about, more generally, was the need for greater North American co-operation on energy following Mexico's reforms meant to attract foreign investment to its sector.
The ministers agreed to begin co-operating on energy data, statistics and mapping of the North American energy sector. Moniz bemoaned the fact that it had been seven years since ministers from the three countries met in the same place — something he said shouldn't happen again.
He said better information-sharing is a start.
"You look at a map that shows hurricane risks to the energy infrastructure — it miraculously ends at the Texas-Mexican border," Moniz said.
"I think our Mexican colleagues know that's not true. And that's just one example."
The Mexican government is loosening its monopoly over the industry, and allowing outside investors to bid on exploration projects. The ministers were given a briefing from Mexican officials on what the reforms might mean for companies from the U.S. and Canada.
One question the ministers also skirted was whether Canada and the U.S. have ever taken any real, serious steps toward regulations for the oil and gas sector.
Prime Minister Stephen Harper had long insisted Canada would move ahead if the U.S. did too, but with no such deal in sight he declared last week that it would be "crazy" to go it alone.
When asked whether they'd ever made any progress on that file, Moniz and Rickford switched the subject to focus on other areas of bilateral co-operation.