The Keystone Pipeline system’s operator, South Bow, has reached a proposed legal settlement with the U.S. government that would require the company to pay a $26.9 million civil penalty regarding a major oil spill that occurred in Kansas in December 2022. Additionally, the Canada-based firm is expected to spend approximately $40 million on initiatives aimed at preventing future accidents.
The agreement is intended to resolve allegations brought forward by the U.S. Environmental Protection Agency and the state of Kansas, which claimed the company violated both federal and state clean water laws. The rupture resulted in the release of nearly 13,000 barrels of heavy crude oil into a creek located in a rural pasture in Washington County, Kansas, roughly 150 miles northwest of Kansas City. According to a 2021 report from the U.S. Government Accountability Office, this incident marked the largest onshore crude pipeline spill in the United States in nine years, exceeding the total of 22 previous spills on the same pipeline system combined. The volume of leaked oil was enough to nearly fill an Olympic-sized swimming pool.
Under the proposed decree filed in U.S. District Court in Kansas, South Bow would also pay more than $3 million to the state for environmental restoration projects. A judge must approve the settlement following a 30-day public comment period. EPA assistant administrator for enforcement, Jeffrey Hall, stated that the spill rendered the waterway lifeless and necessitated extensive cleanup, noting that the penalty reflects the severity of the environmental harm.
South Bow spokesperson Sara Hunter indicated that the company proactively initiated its response before receiving formal government directives. She noted that comprehensive environmental remediation was finished in February 2024. Since the spill, the company has conducted over 12,000 miles of pipeline inspections and performed 400 excavations to repair pipes as needed. TC Energy, which originally built the pipeline, spun off South Bow as a separate firm in 2024 after the Kansas cleanup had concluded.
While no residents or pipeline workers were injured and public water supplies remained unaffected, a government complaint stated that over 2,700 animals were killed or harmed, including the endangered long-eared bat. An engineering firm’s May 2023 report suggested that a bend in the pipeline had been overstressed since its 2010 installation, likely due to construction activity. The government’s complaint further alleged that soil under the pipe was improperly compacted and that the company failed to replace the pipe section during a 2013 re-excavation. The 2,689-mile Keystone system transports Canadian tar sands oil to refineries in Texas, Oklahoma, and Illinois.
