The U.S. Department of Justice has finalized an agreement with South Bow Corp, a pipeline company, concerning a rupture in the Keystone pipeline in 2022 that led to the spillage of nearly 13,000 barrels of oil in northern Kansas. As part of the settlement, the Calgary-headquartered company will pay a civil fine of $26.9 million US for alleged violations of the Clean Water Act.
In addition to the penalty, South Bow has committed to investing around $40 million US in implementing preventive measures to avoid similar incidents in the future. The company will also allocate $3 million US to the state for natural resource restoration projects in order to address violations of state regulations.
The Justice Department highlighted that this spill, which occurred in Kansas, stands as one of the most significant inland oil spills in recent memory and marks the largest incident within the Keystone pipeline system, which stretches from Hardisty, Alberta, to Port Arthur, Texas.
Adam Gustafson, the Deputy Assistant Attorney General, stressed the rapid escalation of pipeline leaks and emphasized the importance of the company’s agreed-upon initiatives to mitigate future spills.
According to Jeffrey Hall, the Assistant Administrator at the U.S. Environmental Protection Agency, this case underscores the critical nature of maintaining pipelines properly to prevent environmental catastrophes. The spill resulted in extensive contamination of land and water, necessitating substantial cleanup efforts and remediation work.
The Justice Department reported that the crude oil spill covered Mill Creek bank-to-bank for 5.6 kilometers from the rupture site, with more than 2,700 animals either killed or harmed as a result. South Bow stated in a released statement that it proactively took corrective actions before receiving formal directives from U.S. authorities, including completing site cleanup by February 2024.
Looking ahead, South Bow has disclosed plans to enhance its cross-border crude pipeline system, notably with the Prairie Connector project. The project aims to repurpose unused pipeline infrastructure originally intended for the Keystone XL expansion project and link it to a pipeline proposed by Bridger Pipeline LLC from the Canada-U.S. border to Wyoming.
The Keystone pipeline, previously owned by TC Energy Corp. before the creation of South Bow in late 2024, has a history of spills, with a notable incident in April 2025 where an estimated 3,500 barrels leaked onto agricultural land in North Dakota. South Bow spokesperson Sara Hunter emphasized the company’s ongoing commitment to pipeline safety and integrity through rigorous inspection and maintenance practices.