Trump Administration Approves Permits for Pipeline Projects to Move Canadian Oil

The projects aim to revive portions of the previously canceled Keystone XL pipeline and to expand capacity linked to the Dakota Access Pipeline by connecting it with existing lines from Canada. The permits arrive as oil producers seek to move growing volumes of Canadian crude to U.S. refineries.

Developments related to the conflict in Iran have added arguments for greater North American energy self-sufficiency. One analyst said the events in Iran are prompting renewed interest in projects that were already under consideration. These would use existing pipe and assets on the Canadian side that were partially built before the project's cancellation in 2021.

The combined projects would run 647 miles from the Montana border to a hub in Guernsey, Wyoming. The Dakota Access Pipeline, which runs from North Dakota to Illinois, would connect indirectly with Canadian crude through a reversal of the Bakken Pipeline, also known as Line 26.

The operator would build about 80 miles of additional pipeline to link the systems. The goal is to move an additional 250,000 barrels per day on the Dakota Access Pipeline.

Both projects rely heavily on existing pipeline corridors and rights of way. An analyst stated that this approach means many permits are already in place. The strategy is intended to reduce potential opposition from environmental groups and Native American communities that occurred during earlier pipeline disputes.

One analyst said facing less resistance is likely when pipe is already in the ground. The Prairie Connector project is undergoing an internal review until the end of May. It is designed to carry at least 450,000 barrels per day of Canadian heavy oil sands crude into the United States.