Delays to TransCanada Corp.’s (NYSE: TRP) Keystone XL pipeline are changing the nature of Canadian and U.S. relations, TransCanada’s CEO Russ Girling said.

“What does the future look like for that trading relationship?” Girling, 51, said May 13 at the Bloomberg Canada Economic Summit in Toronto. “Nobody believes that this doesn’t set a precedent, that the world is the same as it used to be,” he said, referring to the lack of progress in getting approval from the U.S. government for the pipeline.

“The crux of the question is, does the U.S. want Canadian oil,” Girling said.

The Obama administration on April 18 extended the U.S. review of the $5.4 billion Keystone XL line that would link oil sands output with U.S. Gulf Coast refineries because TransCanada’s route faces a legal challenge in Nebraska. That added fresh delays to a project first proposed in 2008.

As Canada’s largest pipeline company by market value after Enbridge Inc. (NYSE: ENB), Calgary-based TransCanada got 45% of its revenue in the first-quarter from its power business, with 42% coming from natural gas pipelines and the rest from oil conduits.

A legal challenge to the protracted U.S. review under the North American Free Trade Agreement isn’t the company’s “primary tack” right now, Girling said.

The CEO repeated May 13 that a Keystone XL startup as planned in 2016 was still possible, although it may be “tough” to get it done by then. The line, originally intended online in 2012, requires two construction seasons to build.

“If we got started next spring in earnest and have the summer of 2015, 2016, it’s still possible” to complete the pipeline by the end of 2016, Girling said.

Fred Upton, the Republican chairman of the Energy & Commerce Committee in the U.S. House of Representatives, said last week he doesn’t expect a decision on Keystone XL from President Barack Obama this year.

The debate over Keystone XL has fomented civil disobedience across the U.S. that led to the arrests of Hollywood actors protesting outside the White House, including Daryl Hannah.

The pipeline’s U.S. review also has become a bilateral irritant between Obama and Canadian Prime Minister Stephen Harper, who has made turning the nation into a so-called energy superpower a priority of his Conservative government.

Opponents of the project, including Natural Resources Defense Council, argue it would hasten climate change by enabling development of oil-sands bitumen that releases more carbon emissions than the average barrel of crude.

“If we don’t get pipelines, we’re going to rail it,” Girling said. “And that’s exactly what’s going on today.”

Proponents, including Laborers International Union of America, say it would create jobs and reduce U.S. dependence on oil imports from the Middle East.

The Nebraska Supreme Court will weigh an appeal of the state court’s February ruling that made the line’s path illegal. The U.S. Department of State last month said it would allow more time for comments from the eight federal agencies that previously had until early May to weigh in on whether the line is in the U.S. national interest.

TransCanada rose 0.2% to C$51 at 4 p.m. in Toronto. The shares have increased 5.1% this year.

Obama rejected an earlier proposal for Keystone XL in 2012, citing environmental concerns with its route in Nebraska. TransCanada split the project, reapplied and won support from the Nebraska governor and legislature for a new path that avoided an aquifer. The state court’s ruling invalidated legislation that let the Republican governor approve the path.