U.S. President Donald Trump on Thursday signed an order granting a cross-border permit to a project that would revive parts of the Keystone XL pipeline to transport Canadian oil from the U.S.-Canada border to Guernsey, Wyoming. The pipeline, proposed by Canadian pipeline company South Bow and its U.S. partner Bridger Pipeline, could increase Canada’s crude exports to the U.S. by more than 12% if it goes ahead. A presidential permit was required for the project to proceed. The new proposal involves a different route through the U.S. than the previous Keystone XL project, which was canceled by former President Joe Biden in 2021 after years of Indigenous and environmental opposition.
“Slightly different than the last administration,” Trump said at a White House event, referring to his administration’s attitude towards crude oil infrastructure. “They wouldn’t sign a pipeline deal, and we have pipelines going up.”
PROJECT TO USE SOME KXL PIPE
But the project will use some of the previously built pipe on the Canadian side, where Keystone XL is already fully permitted. South Bow was spun off by former Keystone XL proponent TC Energy in 2024 to take over its oil pipeline business. Approximately 150 km (93 miles) of pipe has been built in Canada and sitting idle since Keystone XL’s cancellation.
Bridger Pipeline has proposed building a 645-mile pipeline to transport heavy Canadian oil through eastern Montana and eastern Wyoming.
Bridger Pipeline executive partner Tad True hailed the White House authorization, saying it brings the cross-border project “one step closer to reality.”
South Bow is seeking firm commitments from Canadian oil shippers for 450,000 barrels per day on the pipeline. A South Bow spokesperson said the project remains in early stages and is subject to commercial and stakeholder discussions, as well as regulatory processes.
Analysts say Guernsey is not an end market for oil, so additional links would need to be built to transport oil to refining hubs such as Cushing, Oklahoma, Patoka, Illinois, and the U.S. Gulf Coast.
State regulatory permits will also be required, and potential court challenges remain a risk, said Matthew Lewis, founder of Plainview Energy Analytics.
“Provided potential shippers are comfortable with the regulatory risk, the economics of the project appear sound, and the pipeline will be able to offer competitive rates to major U.S. market hubs,” Lewis said.
Canada is the world’s fourth-largest oil producer, and its production is forecast to grow.
Trump – whose tariffs and annexation threats have strained relations with Canada – has repeatedly called for lower oil prices and many U.S. refiners depend on the 4.4 million bpd Canada sends south of the border.
Canada has framed the prospect of a new cross-border oil pipeline as a way it can help the U.S. achieve energy security, which could give Prime Minister Mark Carney leverage in upcoming negotiations over the United States-Canada-Mexico trade agreement.
A spokesperson for Natural Resources Minister Tim Hodgson said Canada is aware of the White House permit issued on Thursday, and remains focused on supporting North American and global energy security while diversifying trade partnerships.
The executive chairman of Canada’s fifth-largest oil company said oil gives Canada “economic hard power” it can use in its dealings with Trump.
“As a result, Canada should be able to negotiate the most favorable trade arrangements with the U.S. in the world,” said Adam Waterous of Strathcona Resources.
(Reporting by Amanda Stephenson in Calgary; additional reporting by Arathy Somasekhar in Houston and Ryan Jones; Editing by David Ljunggren, Edmund Klamann, Rod Nickel)