U.S. President Donald Trump approved a plan on Thursday for the transportation of Canadian oil across the border, aiming to revive sections of the abandoned Keystone XL pipeline project. South Bow, the Canadian pipeline company previously associated with the canceled Keystone XL pipeline, is teaming up with U.S. company Bridger Pipeline for this new initiative. The plan includes potentially reactivating parts 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, Montana, and running to Guernsey, Wyoming. White House Staff Secretary Will Scharf described the project to Trump as a trans-border pipeline akin to the old Keystone XL pipeline, emphasizing the potential job creation. Trump expressed his approval, noting the significant job opportunities the project could bring.
The proposed pipeline has the potential to boost Canada’s crude oil exports to the U.S. by more than 12%. Unlike the previous Keystone XL route that faced opposition and was ultimately canceled by former President Joe Biden in 2021, this new project will take a different path through the U.S. while utilizing some of the already laid pipe on the Canadian side.
South Bow is exploring the Prairie Connector project, intending to expand its Canadian assets and enhance Canadian crude oil market access by leveraging existing infrastructure and permitted corridors. The project is still in early stages and is undergoing evaluations, regulatory processes, and discussions with stakeholders and rights holders.
Established in 2024 following the spin-off of TC Energy’s oil pipeline business, South Bow remains optimistic about the project due to market demand and oil production growth in Canada. Energy law professor James Coleman highlighted the importance of North America’s energy resources in addressing global energy challenges, albeit cautioning about potential legal hurdles similar to those faced by the Keystone XL project.
The new pipeline could transport approximately 550,000 barrels of Canadian crude oil daily to the U.S., enhancing energy trade between the two countries. Regulatory permits will be necessary for the project to proceed, emphasizing the importance of compliance with state regulations. The approval of the presidential permit coincides with ongoing trade tensions between Canada and the U.S., with negotiations for a new North American trade agreement on the horizon.
The revival of the Keystone XL pipeline project during trade discussions signals the strategic importance of energy infrastructure and trade partnerships between the two nations. The project’s construction in Canada had previously created job opportunities and economic benefits in towns like Oyen, showcasing the positive impact of such initiatives on local communities.
Initially proposed in 2005, the 1,897-kilometer Keystone XL pipeline was designed to transport 830,000 barrels of crude oil daily from Hardisty, Alberta, to Nebraska, connecting with the existing Keystone pipeline leading to U.S. Gulf Coast refineries. Despite setbacks, including the legal battle over compensation with the U.S. government, the project’s revival underscores the significance of energy cooperation and infrastructure development between Canada and the U.S.