A proposed legal settlement filed in federal court would require the operator of the Keystone Pipeline system to pay $26.9 million in civil penalties connected to a significant oil spill that occurred in Kansas back in December 2022.
The agreement, reached with both the U.S. Environmental Protection Agency and the state of Kansas, targets South Bow, a Canada-based company, for alleged violations of federal and state clean water laws. The pipeline rupture released close to 13,000 barrels of heavy crude oil into a creek flowing through a rural pasture in Washington County, Kansas — roughly 150 miles northwest of Kansas City.
That spill was the largest onshore crude oil pipeline accident in the United States in nine years, and it exceeded the combined total of all 22 previous spills recorded on the same pipeline system, according to a 2021 report from the U.S. Government Accountability Office. The volume of oil released would have nearly filled an Olympic-sized swimming pool.
Under the proposed decree filed Friday in U.S. District Court in Kansas, South Bow would also pay Kansas more than $3 million toward environmental restoration efforts. In addition to the civil penalty, the company would be required to invest approximately $40 million in measures aimed at preventing future accidents. A judge must sign off on the agreement after a mandatory 30-day public comment window.
Jeffrey Hall, the EPA’s assistant administrator for enforcement, described the environmental damage in stark terms. “The oil spill blanketed land and water, rendering the waterway lifeless and useless and requiring extensive cleanup and remediation,” he said in a statement. “The substantial penalty reflects the seriousness of the environmental harm.”
South Bow officials did not immediately respond to requests for comment Sunday, but the company told The Canadian Press that it began cleanup efforts “proactively” — before receiving any directives from U.S. regulators. That cleanup process was completed in early 2024.
The pipeline was originally built by TC Energy, which later spun off South Bow as an independent company in 2024, after the Kansas cleanup had already been finished.
No pipeline workers or nearby residents were hurt in the incident, and officials confirmed that public drinking water supplies were not impacted. However, a complaint filed Friday alongside the proposed settlement stated that more than 2,700 animals were either harmed or killed. The affected region is also habitat for the long-eared bat, a species listed as endangered.
An engineering consulting firm, in a May 2023 report prepared for the U.S. government, found that the section of pipeline where the rupture occurred had been “overstressed” ever since it was installed in December 2010. Investigators believe construction activity at the time likely disturbed the surrounding soil. The court complaint filed Friday also noted that soil beneath the pipe had been “improperly compacted,” and that although the company dug up the site again in 2013, it never replaced that particular section of pipe.
The Keystone system stretches 2,689 miles and transports thick Canadian tar sands oil to refineries located in Illinois, Oklahoma, and Texas.
In April, President Donald Trump authorized South Bow and another company to proceed with construction of a second pipeline running from Canada to Wyoming — a scaled-down version of the much larger $8 billion Keystone XL project that former President Joe Biden’s administration halted in 2021 due to environmental concerns.
