The U.S. Department of Justice has finalized an agreement with South Bow Corp, a pipeline company, concerning a rupture that occurred in 2022 on the Keystone pipeline, resulting in 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 penalty amounting to $26.9 million US for alleged violations of the Clean Water Act.
Additionally, South Bow has committed to investing approximately $40 million US in preventive measures to avert similar incidents in the future. The company has also agreed to allocate $3 million US for natural resource restoration projects in the state to address violations of state laws.
The U.S. Justice Department described the spill as one of the most significant inland oil spills in recent memory and the largest stemming from the Keystone pipeline system, which stretches from Hardisty, Alberta, to Port Arthur, Texas. Adam Gustafson, deputy assistant attorney general, emphasized the importance of the company’s pledged actions to minimize the likelihood of future leaks.
Jeffrey Hall, assistant administrator at the U.S. Environmental Protection Agency, emphasized the necessity of maintaining pipelines effectively, citing the extensive environmental damage caused by the spill in Kansas. The spill resulted in a thick layer of crude oil covering Mill Creek for 5.6 kilometers from the site of the rupture, leading to the deaths or injuries of over 2,700 animals.
South Bow stated that it took proactive steps to address the issue before receiving formal directives from U.S. authorities. The cleanup efforts were completed by February 2024. The company’s spokesperson, Sara Hunter, highlighted ongoing efforts to enhance the pipeline system’s integrity through inspections and remedial actions.
Originally owned by TC Energy Corp at the time of the spill, the pipeline was later transferred to South Bow following a business restructuring in late 2024. The Keystone system has experienced previous spills, including one in April 2025 when approximately 3,500 barrels leaked onto agricultural land in North Dakota.
South Bow is planning to expand its cross-border crude pipeline system, with the Prairie Connector project being a focal point. This initiative involves repurposing unused pipeline sections initially intended for the Keystone XL expansion project. The Prairie Connector aims to connect to a pipeline proposed by Bridger Pipeline LLC, extending from the Canada-U.S. border to Wyoming.
