The operator of the Keystone Pipeline system has agreed to pay a $26.9 million civil penalty to the U.S. government and spend approximately $40 million to prevent future accidents, according to a proposed legal settlement. The agreement aims to resolve allegations by the U.S. Environmental Protection Agency and the state of Kansas that the pipeline's operator, South Bow, violated U.S. and state clean water laws.
The December 2022 rupture in Washington County, Kansas, dumped nearly 13,000 barrels of heavy crude oil into a creek. This incident was the largest onshore crude pipeline spill in the U.S. in nine years and surpassed the combined total of all 22 previous spills on the same pipeline system, according to a 2021 report from the U.S. Government Accountability Office.
South Bow will also pay Kansas more than $3 million for environmental restoration projects. A judge must approve the proposed decree, which was filed in U.S. District Court in Kansas, following a 30-day public comment period.
"The oil spill blanketed land and water, rendering the waterway lifeless and useless and requiring extensive cleanup and remediation," said Jeffrey Hall, the EPA's assistant administrator for its enforcement office. "The substantial penalty reflects the seriousness of the environmental harm."
South Bow spokesperson Sara Hunter stated that the company began its response to the spill before receiving formal directives from government officials, carrying out "comprehensive environmental remediation" that concluded in February 2024. She added that since the spill, the company has conducted over 12,000 miles of pipeline inspections and 400 excavations to examine and repair the pipe.
TC Energy, the company that originally built the pipeline, spun off South Bow as a separate entity in 2024, after the cleanup in Kansas was completed.
While no pipeline workers or area residents were injured and public water supplies were not affected, the U.S. government's complaint noted that more than 2,700 animals were harmed or killed. The affected area is also habitat for the endangered long-eared bat.
A May 2023 report indicated that a bend in the Keystone system where the spill occurred had been "overstressed" since its installation in December 2010. The complaint filed Friday stated that soil under the pipe had been "improperly compacted" and that the company had not replaced the section of pipe when it re-excavated the site in 2013.
The 2,689-mile Keystone system transports Canadian tar sands oil to refineries in Illinois, Oklahoma, and Texas. In April, President Donald Trump approved plans for South Bow and another company to construct a new pipeline from Canada to Wyoming, a smaller-scale project compared to the Keystone XL pipeline that was blocked by the Biden administration in 2021.