New U.S. proposal could revive Keystone XL pipeline assets, but would need Trump’s approval

A new proposal for a pipeline that would transport more than 500,000 barrels of oil a day from the Canada-U.S. border to Wyoming could revive part of the long-dead Keystone XL project, energy watchers say, but it would face stiff economic challenges in a tight market.

And it would require rapid permitting by President Donald Trump’s administration if it is to avoid the issues that bedevilled the project over the almost 15 years between its initial proposal and eventual demise.

But the certificate that would allow South Bow LLC SOBO-T to build the Canadian portion of Keystone XL remains valid, according to the Canada Energy Regulator, and the company continues to comply with its permit conditions.

The project’s possible revival stems from a proposal by Bridger Pipeline LLC to build a pipeline to deliver roughly 550,000 barrels per day of crude from the Canada-U.S. border where it crosses in Phillips County, Mont., to Guernsey, Wyo.

Bridger, a private oil transportation company based in Casper, Wyo., submitted its proposal to the Montana Department of Environmental Quality on Jan. 28. It acknowledged in the application that the project would require a presidential permit, along with various other approvals.

“In the Trump world, it probably wouldn’t take very long” to get such a permit, said Richard Masson, an energy consultant and former chief executive of the Alberta Petroleum Marketing Commission.

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Indeed, in its application, Bridger cited an executive order signed by Mr. Trump on Jan. 20, 2025, which declared a national energy emergency. The order directed federal agencies to expedite the production and transportation of domestic energy resources, including crude oil, and Bridger said the project would represent “a significant and meaningful investment in the U.S. energy economy.”

Mr. Masson said the question then becomes, “What happens when the Democrats get back in? Whether the thing is built or not, does the permit get pulled for the third time?”

There are also competitive challenges, Mr. Masson said in an interview.

Enbridge Inc. ENB-T, for example, is spending $1.4-billion to boost capacity on its Mainline network and Flanagan South Pipeline to increase deliveries of Canadian heavy oil to key U.S. refining markets.

South Bow will leverage all of its available assets “because it’s one of their best paths for growth,” Mr. Masson said, “but it’s a very competitive market” with only so much oil being produced.

“These are all smart people, so the fact that we’re talking about this means there’s probably something there. But my guess is it still faces lots of challenges before it’s going to come to fruition,” he said.

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South Bow said in November it planned to use takeovers of rival oil pipelines as part of an ambitious plan to more than double its size.

Spokesperson Solomiya Lyaskovska said in an e-mail Wednesday that South Bow is “evaluating an expansion that would leverage existing infrastructure and permitted corridors in Canada and could connect to downstream pipelines in the United States,” but the concept is in its early stages.

The company will hold its 2025 year-end earnings call on March 6.

Keystone XL was first proposed in 2008. It was long a target of climate-change activists in Canada and the U.S., and was subject to years of protests, studies and court challenges, as well as presidential approvals and rejections.

It was halted in 2021 after then-U.S. president Joe Biden revoked a key permit that had been issued by the previous Trump administration. Besides forcing the company to declare a write-down of $2.2-billion, it also meant a $1.3-billion loss for Alberta taxpayers a year after then-premier Jason Kenney’s government bought an equity stake in the project and provided loan guarantees.

Bridger’s pipeline would traverse more than 1,000 kilometres across the two states if approved, according to the proposal, roughly 700 kilometres of which would run parallel to existing pipeline infrastructure. Bridger also plans to install eight pump stations along the route, one of which would be on federal lands near the border.

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The proposal is “straightforward but ambitious,” said Liz Dicken, a senior analyst at RBN Energy LLC.

“Given the proposed border origin point, the only infrastructure that appears capable of supplying that scale of incremental volume is the partially constructed Keystone XL system in Alberta, which has remained idle since 2021,” Ms. Dicken wrote in a research note.

Some construction in Canada went ahead despite turmoil south of the border, she noted, and segments of pipe, a terminal and two pump stations are still in place, including at the border crossing.

“Assuming the Bridger project is tying into that dormant footprint, the combined pipes could create a functional cross-border outlet without the need for Keystone XL’s southern leg.”

Mr. Trump has long raised the prospect of restoring approval for the Keystone XL pipeline project to bring more Canadian oil into the U.S. market. He brought it up during a presidential election debate with Democratic opponent Kamala Harris and, in February last year repeated calls to get the line built.

South Bow said at the time that it had “moved on” from Keystone but, in October, it said it was exploring ways to leverage existing oil pipeline corridors to increase crude exports. At the same time, Prime Minister Mark Carney raised the prospect of reviving Keystone XL during talks with Mr. Trump.

Mr. Carney was aware of South Bow’s plans to revive parts of the cancelled Keystone XL pipeline expansion to the U.S. when he floated the idea in October, Reuters reported this week.