U.S. President Donald Trump has approved a new project that will facilitate the transportation of Canadian oil across the border, aimed at reviving sections of the previously scrapped Keystone XL pipeline. South Bow, the Canadian pipeline company associated with the canceled Keystone XL project, has joined forces with U.S.-based Bridger Pipeline for this new venture.
The plan involves potentially reactivating sections of the existing pipeline in Alberta and Saskatchewan. Bridger Pipeline is looking to construct a 1,038-kilometer pipeline starting near the U.S.-Canada border in Phillips County, Mont., and extending to Guernsey, Wyo.
Upon signing the order, President Trump was briefed by White House Staff Secretary Will Scharf, who emphasized that this project mirrors the trans-border nature of the original Keystone XL pipeline. Trump expressed enthusiasm, acknowledging the potential for job creation associated with the endeavor.
This revived proposal could boost Canada’s crude exports to the U.S. by over 12%. Unlike its predecessor, which faced extensive Indigenous and environmental opposition and was ultimately canceled by former President Joe Biden in 2021, the new project will follow a different route through the U.S. However, it will integrate some of the previously laid pipeline on the Canadian side, where the Keystone XL line has full permits, with approximately 150 kilometers already installed in Alberta.
South Bow is evaluating the Prairie Connector project, an expansion of its Canadian assets leveraging existing infrastructure to enhance market access for Canadian crude oil. The project is in its early stages and is undergoing assessments, regulatory procedures, and discussions with stakeholders and rights holders.
Established in 2024 following TC Energy’s spinoff of its oil pipeline business, South Bow’s persistence with the project is attributed to favorable market conditions, according to James Coleman, an energy law expert at the University of Minnesota.
While North America is well-equipped to address energy challenges, legal hurdles akin to those faced by the Keystone XL project could arise. The pipeline, designed to transport approximately 550,000 barrels of Canadian crude daily to the U.S., requires state regulatory approvals to proceed.
The timing of the presidential permit coincides with ongoing trade tensions between Canada and the U.S. and upcoming negotiations on a new North American trade agreement. Prime Minister Mark Carney previously discussed the Keystone XL project with Trump during a meeting at the White House last October.
During the construction of the Canadian segment of the Keystone XL pipeline, around 1,000 workers were stationed in Oyen, a town located east of Calgary. Originally proposed in 2005, the 1,897-kilometer Keystone XL pipeline was designed to transport 830,000 barrels of crude daily from Hardisty, Alta., to Nebraska, connecting to U.S. Gulf Coast refineries via the original Keystone pipeline.
In 2024, TC Energy’s claim seeking $15 billion US from the U.S. government was dismissed, alleging unfair treatment. The project revival signifies a significant development in the energy sector, with stakeholders cautiously optimistic about its potential benefits and challenges ahead.
