U.S. President Donald Trump has officially approved a plan to transport Canadian oil across the border, aiming to revive segments of the defunct Keystone XL pipeline. The initiative involves a partnership between South Bow, the Canadian company that originally spearheaded the Keystone XL project, and Bridger Pipeline, a U.S. firm. South Bow is contemplating the reactivation of portions of the existing pipeline in Alberta and Saskatchewan.
Bridger Pipeline is proposing the construction of a 1,038-kilometer pipeline starting near the U.S.-Canada border in Phillips County, Montana, and extending to Guernsey, Wyoming. The new project, which Trump likened to the old Keystone XL pipeline, could potentially boost Canada’s crude exports to the U.S. by over 12%.
Despite the cancellation of the previous Keystone XL project by former President Joe Biden, the current proposal outlines a different route through the U.S. while utilizing some of the already laid pipeline in Canada. South Bow is assessing the Prairie Connector project, which seeks to expand its Canadian assets and enhance market access for Canadian crude oil using existing infrastructure and permitted corridors.
Established in 2024 following the spin-off of TC Energy’s oil pipeline division, South Bow is looking to capitalize on market conditions favoring increased oil production in Canada amidst global challenges to waterborne oil transportation. Energy law expert James Coleman sees the revival of the pipeline as a sensible move given North America’s strategic energy resources.
The pipeline’s potential to transport 550,000 barrels of Canadian crude per day has garnered support from industry stakeholders like Lisa Baiton, CEO of the Canadian Association of Petroleum Producers. However, the project still hinges on securing state regulatory permits.
In response to the permit issuance, the Government of Canada emphasizes its commitment to bolstering the country’s energy sector and diversifying trade partnerships. The presidential permit for the project coincides with ongoing trade tensions between Canada and the U.S., as both nations gear up for negotiations on a new North American trade agreement.
Prime Minister Mark Carney previously raised the prospect of the Keystone XL project with Trump, underscoring Canada’s reliance on integrated energy infrastructure with the U.S. During the construction phase of the Canadian leg of the Keystone XL pipeline, approximately 1,000 workers were employed in Oyen, Alberta.
Originally announced in 2005, the 1,897-kilometer Keystone XL pipeline was designed to transport 830,000 barrels of crude daily from Hardisty, Alberta, to Nebraska, connecting with the existing Keystone pipeline leading to U.S. Gulf Coast refineries. In 2024, TC Energy’s bid to recover $15 billion US from the U.S. government was unsuccessful after alleging unfair treatment.