A plan put forth by South Bow, a Canadian company, aims to rejuvenate segments of the scrapped Keystone XL oil pipeline, potentially boosting Canada’s crude exports to the United States by more than 12%. This proposal hinges on approval from U.S. President Donald Trump and the construction of additional connections to U.S. refining centers.
The new plan outlines a revised route through the U.S. different from the previous Keystone XL pipeline project, which was canceled by former U.S. President Joe Biden in 2021 due to longstanding opposition from Indigenous and environmental groups.
South Bow, established by TC Energy in 2024 to take over its oil pipeline operations, is deliberating on reviving sections of the pipeline already built in Alberta and possessing all necessary Canadian permits.
Canadian Prime Minister Mark Carney raised the pipeline’s potential revival in discussions with Trump in October. This development could provide leverage in forthcoming negotiations concerning the renewal of the Canada-U.S.-Mexico (CUSMA) trade pact.
Trump, known for his tariff disputes and annexation threats that strained relations with Canada, has consistently advocated for lower oil prices. Many U.S. refiners rely on the approximately 4.4 million barrels per day of Canadian exports.
Bridger Pipeline, a potential U.S. partner for South Bow, recently submitted a proposal to Montana regulators detailing the construction of a 1,038-kilometer pipeline with a capacity of up to 550,000 barrels per day. The pipeline would start near the U.S.-Canada border in Phillips County, Montana, and extend to Guernsey, Wyoming.
However, experts note that Guernsey is not a primary market for crude oil, necessitating the creation of additional links to transport oil to key refining centers such as Cushing, Oklahoma; Patoka, Illinois; and the U.S. Gulf Coast.
According to Matthew Lewis, founder of Plainview Energy Analytics, the most viable configuration would involve a new pipeline spanning over 680 kilometers from Guernsey to Steele City, Nebraska, where it could link up with the existing Keystone mainline system. Subsequently, the oil could be directed into underutilized pipelines leading to Cushing, Patoka, and Wood River, Illinois.
The entity willing to assume the risks associated with this segment of the project remains uncertain. “The primary hurdle in this plan for the Guernsey-to-Steele City segment is obtaining permits and constructing new pipelines, which could face legal challenges tying up the project in court,” Lewis explained.
While South Bow mentioned that its proposal could interconnect with downstream U.S. pipelines, it refrained from providing further details. Bridger Pipeline also chose not to comment on the matter.
Leveraging existing infrastructure
Bridger plans to construct the Montana-to-Guernsey section
