U.S. President Donald Trump has given the green light to a proposed initiative aimed at transporting Canadian oil across the border, in a move to revive portions of the scrapped Keystone XL pipeline project. The endeavor involves a partnership between South Bow, the Canadian pipeline company behind the original Keystone XL project, and Bridger Pipeline, a U.S. firm. South Bow is exploring the possibility of reviving segments of the previously constructed line in Alberta and Saskatchewan.
Bridger Pipeline is actively working on the construction of a potential 1,038-kilometre pipeline that is set to commence near the U.S.-Canada border in Phillips County, Mont., and extend to Guernsey, Wyo. During the signing of the order, White House Staff Secretary Will Scharf informed the president that the project resembles the old Keystone XL pipeline. Trump acknowledged the job creation potential of the initiative, expressing his approval.
This new proposal, if realized, could boost Canada’s oil exports to the U.S. by more than 12%. Unlike the former Keystone XL project, which faced cancellation in 2021 under the administration of ex-president Joe Biden due to prolonged Indigenous and environmental opposition, the current project suggests a different route within the U.S. However, it plans to utilize portions of the existing pipeline on the Canadian side, where the Keystone XL line enjoys full permitting, with approximately 150 kilometers of pipeline already in place in Alberta.
South Bow is evaluating the Prairie Connector project, a potential expansion of its Canadian assets leveraging existing infrastructure and approved pathways to enhance market access for Canadian crude oil, according to a statement from South Bow spokesperson Solomiya Martoiu. The project is still in its early stages and is subject to ongoing commercial negotiations, stakeholder consultations, regulatory procedures, and assessments.
Established in 2024 following the spinoff of TC Energy’s oil pipeline business, South Bow’s persistence in reviving the project is attributed to market dynamics that align with current oil production trends in Canada. James Coleman, an energy law expert at the University of Minnesota, highlighted the growing oil production in Canada and emphasized North America’s strategic positioning to address the energy crisis triggered by global events. Despite the project’s potential benefits, legal challenges akin to those faced by Keystone XL are anticipated.
The proposed pipeline aims to transport approximately 550,000 barrels of Canadian crude daily to the U.S. Lisa Baiton, CEO of the Canadian Association of Petroleum Producers, emphasized the advantages of enhancing Canada’s energy infrastructure to facilitate reliable energy transportation. The project’s advancement is contingent upon securing state regulatory approvals.
The issuance of the presidential permit comes amidst trade tensions between Canada and the U.S., as both nations prepare for upcoming trade negotiations. Last October, Prime Minister Mark Carney discussed the revival of the Keystone XL project with Trump during a meeting at the White House. The construction of the Canadian segment of the original Keystone XL pipeline employed around 1,000 workers in Oyen, situated east of Calgary.
Initially announced in 2005, the 1,897-kilometre Keystone XL pipeline was designed to transport 830,000 barrels of crude oil daily from Hardisty, Alta., to Nebraska, connecting with the Keystone pipeline leading to U.S. Gulf Coast refineries. In 2024, TC Energy’s attempt to seek $15 billion US in damages from the U.S. government was unsuccessful, alleging unfair treatment.