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It’s not quite Keystone XL, but Canada could be looking at an expanded pipeline capacity of 550,000 barrels per day into the United States.

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The plan, still seeking approval stateside, would use existing infrastructure in Canada from the Keystone XL project and include a new 1,038-km pipeline through Montana and Wyoming.

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Keystone XL was first proposed by TransCanada Pipeline, now TC Energy, almost 20 years ago to take Alberta oil into the U.S. and eventually to refineries on the Gulf Coast. The project was a political football: Widely supported by the Stephen Harper government in Canada, blocked by president Barrack Obama in 2015, approved by President Donald Trump in 2017 and then cancelled by president Joe Biden in 2021.

At the end of January, Casper, Wyo.-based Bridger Pipeline applied to the Montana Department of Environmental Quality for permission to construct a new pipeline to “transport crude oil from production areas in Canada.” The proposal would run most of the pipeline along existing rights of way that already host existing infrastructure.

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Pipeline capacity would be increased by 8%

The existing Keystone XL infrastructure from the never-completed pipeline is owned by South Bow Corporation of Calgary, a company spun off from TC Energy in 2024. The idea would be to resurrect the Canadian leg of the Keystone XL project and connect it to Bridger’s network with a border-crossing point in Phillips County, Mont., which is about 150 km south of Swift Current, Sask.

The addition of 550,000 barrels of oil per day being exported to the U.S. would be an increase of about 8% over the 4.5 million barrels of Canadian oil shipped to the U.S. each day.

Alberta Premier Danielle Smith said on Wednesday that she’s heard of the project and welcomes the idea of increased production.

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If the project goes ahead, there are indications of support from Trump and Prime Minister Mark Carney. In the past, Trump has called for Keystone XL to be revived and Carney raised the issue with Trump in a meeting at the White House in October.

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Will Trump grant permits for project?

According to a report by Reuters, when Carney raised the issue with Trump, he was already aware that South Bow was looking to find an American partner to essentially rescue the portions of Keystone XL that were already built. Trump would likely grant the permit needed for the pipeline to cross into the U.S. given his past support and his granting of a similar crossing permit to South Bow last summer for a project linking North Dakota to Manitoba.

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The revived Keystone XL wouldn’t need additional permits in Canada and by using mostly existing rights of way to build the new American pipeline, approvals are more likely and the timeline to start construction would be much quicker.

None of this would impact the push for a pipeline to the British Columbia coast that was part of the memorandum of understanding between Alberta and the federal government. That agreement was specific that the Alberta and the federal governments would work toward exporting to markets other than the U.S.

“Canada confirms that it will enable the export of bitumen from a strategic deep-water port to Asian markets,” the memorandum says.

Welcome news for energy sector

The memorandum also says that the two governments would work to expand the Trans Mountain pipeline’s capacity by 300,000-400,000 barrels per day to be exported to Asian markets.

After years of self-defeating policy in Canada that made exporting our natural resources more difficult, this is all welcome news. There will be some opposition inside the Liberal caucus and even within Carney’s cabinet, but the PM appears determined to jettison his zero-carbon ideals for the sake of the Canadian economy.

This project still has a long way to go before champagne bottles can be popped and oil flows, but it should be encouraged at every stage.

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