U.S. President Donald Trump signed an order on Thursday approving a plan to transport Canadian oil across the border, aiming to revive sections of the canceled Keystone XL pipeline. The Canadian pipeline company, South Bow, in collaboration with U.S. company Bridger Pipeline, is working on this proposed project. South Bow is exploring the possibility of reactivating segments of the previously constructed line in Alberta and Saskatchewan.
Bridger Pipeline is in the process of developing a potential 1,038-kilometer pipeline that would start near the U.S.-Canada border in Phillips County, Mont., and extend to Guernsey, Wyo. The White House Staff Secretary, Will Scharf, described the project as a trans-border pipeline akin to the original Keystone XL pipeline, to which Trump responded positively, acknowledging the potential job creation.
The proposed pipeline could boost Canada’s crude exports to the U.S. by more than 12%. It follows a different route through the U.S. compared to the previous Keystone XL project, which was halted by former President Joe Biden in 2021 due to Indigenous and environmental opposition. Nonetheless, the new plan will utilize some of the existing pipeline on the Canadian side, where the Keystone XL route already has full permits, with approximately 150 kilometers of pipe already laid in Alberta.
South Bow is considering the Prairie Connector project to expand its Canadian asset base and enhance market access for Canadian crude oil. This project is still in its early stages and is undergoing commercial, stakeholder, and regulatory evaluations. Experts cite market demand and regional energy dynamics as driving factors for the project’s resurgence, particularly with growing oil production in Canada and global energy challenges.
Despite the potential benefits, legal hurdles similar to those faced by the Keystone XL project could arise. The pipeline, if approved, is anticipated to transport around 550,000 barrels of Canadian crude per day to the U.S. Various stakeholders, including the Canadian Association of Petroleum Producers, have expressed support for new energy infrastructure that can efficiently transport Canadian energy resources.
To proceed with the project, regulatory permits at the state level will be essential. The decision to issue a presidential permit for the pipeline coincides with ongoing trade tensions between Canada and the U.S., as well as upcoming trade negotiations. The past interactions between Canadian and U.S. officials regarding the Keystone XL project have influenced ongoing discussions around energy infrastructure and trade partnerships between the two nations.
