The South Bow proposal to revive parts of the Keystone XL pipeline could boost Canada’s crude exports to the U.S. significantly, facing potential hurdles related to U.S. approvals and infrastructural changes.
The South Bow proposal, backed by the Calgary-based company and initiated by TC Energy in 2024, seeks to revive sections of the Keystone XL pipeline, which was previously canceled by President Biden in 2021 due to environmental and Indigenous opposition. The modified route would allow for a projected increase of over 12% in Canada's crude exports to the U.S., contingent on securing approvals from U.S. authorities including President Trump, who has been engaged in discussions regarding the proposal with Canadian Prime Minister Mark Carney.
The new proposal differs significantly from the original Keystone XL in that it aims to build connections to U.S. refining hubs despite facing significant challenges associated with the prior project's controversial history. Since the previous cancellation, South Bow has ensured all necessary permits for the components of the pipeline that are still operational in Alberta and is now focusing on building a case for the broader U.S. segment of the pipeline.
Prime Minister Carney’s discussions with Trump could position Canada favorably in the ongoing negotiations surrounding the US-Mexico-Canada Agreement (USMCA), potentially leveraging the pipeline project to strengthen bilateral relations and advance Canada’s energy interests amidst ongoing debates over energy policies in North America.
