The U.S. Department of Justice has finalized a settlement with South Bow Corp., a pipeline company, concerning a rupture of the Keystone pipeline in 2022 that led to the spilling of nearly 13,000 barrels of oil in northern Kansas. As part of the agreement, the Calgary-based company will pay a civil penalty of $26.9 million US for Clean Water Act violations.
Additionally, South Bow has committed to investing approximately $40 million US in preventive measures to avoid similar incidents in the future. The company will also allocate $3 million US for natural resource restoration projects to address state law violations.
According to the Justice Department, the oil spill in northern Kansas was one of the largest inland oil spills in recent history and the biggest from the Keystone pipeline network, which stretches from Hardisty, Alberta, to Port Arthur, Texas. Adam Gustafson, deputy assistant attorney general, emphasized the importance of the company’s proactive efforts to prevent future leaks.
Jeffrey Hall, assistant administrator at the U.S. Environmental Protection Agency, highlighted the critical need for maintaining pipelines properly to avoid environmental disasters like the spill that affected Mill Creek in Kansas. The spill resulted in significant damage to the land and water, necessitating extensive cleanup and remediation efforts.
The Justice Department revealed that the spill covered Mill Creek with crude oil over two centimetres thick for 5.6 kilometres from the rupture site, leading to the death or harm of over 2,700 animals. South Bow stated that it took corrective actions before formal directives from U.S. authorities and completed site cleanup by February 2024.
South Bow’s spokesperson, Sara Hunter, mentioned that the company has conducted thorough inspections and remedial work on the Keystone system to enhance its integrity and ensure safe operations. The company has utilized advanced technologies for in-line inspections on over 19,000 kilometres of pipelines and conducted 400 field excavations for repairs.
Formerly owned by TC Energy Corp., the Keystone pipeline has a history of spills, with a notable incident in North Dakota in April 2025 where approximately 3,500 barrels leaked onto agricultural land. South Bow is planning to expand its cross-border crude pipeline system, including the Prairie Connector project, aimed at utilizing existing infrastructure for pipeline connectivity.
In light of this settlement, South Bow is demonstrating its commitment to pipeline safety and environmental responsibility, striving to strengthen the integrity of its operations continuously.