U.S. President Donald Trump signed an order on Thursday approving a project to transport Canadian oil across the border, aiming to revive portions of the scrapped Keystone XL pipeline. South Bow, the Canadian pipeline company associated with the canceled Keystone XL project, is collaborating with Bridger Pipeline, a U.S. firm, for the proposed initiative. South Bow is exploring the possibility of restoring sections of the already constructed pipeline in Alberta and Saskatchewan.
Bridger Pipeline is advancing with plans to construct a potential 1,038-kilometer pipeline starting near the U.S.-Canada border in Phillips County, Montana, and extending to Guernsey, Wyoming. At the signing of the order, White House Staff Secretary Will Scharf informed the president that the project resembles the previous Keystone XL pipeline. Trump acknowledged the job creation potential, expressing approval for the initiative.
The proposed pipeline could boost Canadian crude exports to the U.S. by over 12%. Unlike the previous Keystone XL route, which faced cancellation in 2021 due to Indigenous and environmental opposition under former President Joe Biden, this new proposal involves a different path through the U.S. but utilizes some of the previously laid pipe on the Canadian side. South Bow is contemplating the Prairie Connector project, an expansion leveraging existing infrastructure to enhance market access for Canadian crude oil.
Established in 2024, South Bow emerged when TC Energy, the former proponent of Keystone XL, separated its oil pipeline business. Energy law professor James Coleman highlighted the practicality of the project given rising oil production in Canada and global oil transportation challenges. Legal hurdles akin to those faced by Keystone XL are anticipated for this revived initiative.
The pipeline aims to transport approximately 550,000 barrels of Canadian crude daily to the U.S. Industry stakeholders, including the Canadian Association of Petroleum Producers, endorse new capacity that can efficiently move Canadian energy. However, state regulatory permits are essential for project progression. The issuance of permits to Bridger Pipeline is noted, with the Canadian government prioritizing energy security and trade diversification.
The presidential approval coincides with ongoing trade tensions between Canada and the U.S., as negotiations for a new North American trade agreement loom. Last October, Prime Minister Mark Carney discussed the Keystone XL revival with Trump, emphasizing the longstanding integration of Canadian energy infrastructure with the U.S. market.
During the construction phase of the Canadian segment of Keystone XL, Oyen accommodated approximately 1,000 workers. Initially 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 Keystone pipeline leading to U.S. Gulf Coast refineries. In 2024, TC Energy’s bid to recover $15 billion from the U.S. government was unsuccessful following claims of unfair treatment.
