Keystone XL’s second coming? This time as a Wyoming-bound pipeline

The cancelled Keystone XL pipeline isn’t entirely dead, says Matthew Lewis, founder of the Denver-based independent research firm Plainview Energy Analytics. In fact, a piece of it could be stitched into a new 36-inch crude oil line that would help get more Canadian oil to refineries along the Gulf Coast—but first passing through Wyoming. “Keystone XL — I know you’ve heard of it, but most people don’t realize some of the pipeline up in Canada was already laid before they cancelled that project,” Lewis said. “So this will tie in — appears to tie into some of those assets that were laid or partially laid.”

Keystone XL was a proposed extension of the Keystone pipeline system that would have carried crude oil from Alberta’s tar sands to refineries on the U.S. Gulf Coast, but the project was canceled in 2021 after the Biden administration revoked its cross-border permit. The company that holds the rights to Keystone XL “appear to be reviving that project as a feeder system to this new Bridger pipeline,” Lewis said. “It’s kind of a resurrection of the project in a bit of a different form. The route is a little bit different. The Bridger project follows a different route. But you could say that the two are somewhat tied together for sure.”

Called the Bridger Pipeline Expansion, the project would run 647 miles from the U.S.-Canada border in Phillips County, Montana, south through eastern Montana and into Wyoming, terminating at an existing crude oil terminal hub near Guernsey. Bridger Pipeline—part of the True Companies in Casper—filed its full application with the Montana Department of Environmental Quality in late March, and on April 1 the Bureau of Land Management published a Notice of Intent in the Federal Register to prepare an Environmental Impact Statement, opening a 30-day public scoping period. The line would initially carry 550,000 barrels per day but is designed to scale to as much as 1.13 million barrels per day, according to filings analyzed by Plainview Energy Analytics.

“I can only speak for our project, which is from the U.S.-Canadian border down to Guernsey,” said Bridger spokesman Bill Salvin. “We have filed paperwork with the state of Montana to build a 36-inch pipeline from the U.S.-Canadian border in Phillips County, Montana, down to Guernsey, Wyoming,” he said, noting that about 70% of the route follows existing pipeline corridors. The motivation is “to deliver Canadian crude oil to Guernsey, Wyoming,” where a major hub will hand the barrels off to other carriers.

Salvin pointed to a looming Canadian capacity squeeze as another underlying driver. “The pipeline capacity that exists in Canada to move Canadian oil from the producers in Canada who get it out of the ground — their pipelines are projected to run out of space or be at capacity sometime around 2028, 2029,” he said. “So in terms of any urgency, the constraint that is present is a pipeline capacity constraint.” The project is years away from breaking ground. “There’s a lot of things that need to happen between now and the start of construction, and this is a multi-year process to get a pipeline built in the way that we’ve proposed,” Salvin said.

As for what the project does for Wyoming, Lewis said, “I don’t think it solves any Wyoming problem per se. Wyoming’s being used as a corridor to get the barrels to market.” He added, “These pipelines typically pay a fair amount of property taxes. This would be a large project, so there would be some benefits to the counties and the state in that form.”

The state’s oil and gas lobby is welcoming the filings. “The Bridger Pipeline expansion through Wyoming represents an exciting opportunity for Wyoming’s oil and natural gas industry,” said Ryan McConnaughey, vice president and director of communications for the Petroleum Association of Wyoming. “Investments like these, along with continued growth in areas like the Powder River Basin, show Wyoming will continue to play an important role in the nation’s energy markets.”

Three in-person scoping meetings and one virtual session are scheduled. The Wyoming meeting runs April 13 from 5 to 7 p.m. at the Newcastle Lodge & Convention Center in Newcastle. Montana sessions follow April 14 in Glasgow and April 15 in Miles City, with a virtual session April 16. Lewis cautioned the Bridger Expansion is far from inevitable. “Nothing is set in stone right now on this,” he said. “They still have to get shippers to sign up and commit to the project, and there are competing projects out there that might be the shippers might decide to sign up for instead of this one. It’s still very much in the planning stage or proposed stage.”