A Canadian company called South Bow is proposing to revive sections of the Keystone XL oil pipeline, potentially boosting Canada’s crude exports to the U.S. by over 12%. This plan would require approval from U.S. President Donald Trump and the construction of additional links to U.S. refining centers.
Unlike the previous Keystone XL project that was canceled by former U.S. President Joe Biden in 2021 due to opposition from Indigenous groups and environmental concerns, South Bow’s proposal involves a different route through the U.S. The company, established by former Keystone XL supporter TC Energy in 2024 to manage its oil pipeline operations, is exploring the revival of a portion of the pipeline already constructed in Alberta and possessing all required Canadian permits.
Canadian Prime Minister Mark Carney brought up the potential revival of the pipeline during discussions with Trump in October, which could play a role in negotiations surrounding the renewal of the Canada-U.S.-Mexico trade agreement.
South Bow’s potential U.S. partner, Bridger Pipeline, has submitted a proposal to Montana regulators for the construction of a 1,038-kilometre pipeline capable of transporting up to 550,000 barrels per day. This pipeline would start near the U.S.-Canada border in Phillips County, Montana, and extend to Guernsey, Wyoming. However, further links would need to be established to connect Guernsey to refining hubs in 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 stretching over 680 kilometres from Guernsey to Steele City, Nebraska, connecting to the existing Keystone mainline system. Uncertainty remains regarding who would assume the risks associated with this segment of the project.
Bridger’s proposal aims to leverage existing pipeline infrastructure in Montana and alongside the Alberta side, where approximately 150 kilometres of Keystone XL pipeline has already been built but remains inactive since the project’s cancellation.
While the South Bow-Bridger proposal awaits further developments, it is anticipated to face opposition from environmentalists, landowners, and Indigenous communities, similar to previous pipeline projects. The proposal also coincides with expansions planned by Trans Mountain and Enbridge, adding complexity to the evolving landscape of oil pipeline developments.