The U.S. Department of Justice has finalized an agreement with South Bow Corp., a pipeline company, concerning a rupture of the Keystone pipeline in 2022 that resulted in the spillage of almost 13,000 barrels of oil in northern Kansas. As part of the settlement, the Calgary-headquartered firm will pay a $26.9 million US civil penalty for Clean Water Act violations. Additionally, South Bow will allocate around $40 million US towards preventative measures to avert similar incidents in the future and contribute $3 million US to state natural resource restoration projects to address breaches of state regulations.
The Justice Department highlighted that this spill, which occurred in Kansas, stands as one of the most significant inland oil leaks in recent memory and the largest to date from the Keystone pipeline network, stretching from Hardisty, Alberta, to Port Arthur, Texas. Adam Gustafson, deputy assistant attorney general, emphasized the rapid escalation that can ensue from pipeline leaks, underscoring the crucial role of the company’s commitment to preventing future incidents as outlined in the settlement.
According to Jeffrey Hall, assistant administrator at the U.S. Environmental Protection Agency, the incident underscores the critical importance of maintaining pipeline infrastructure to prevent environmental damage. The Justice Department reported that the crude oil spill covered Mill Creek extensively, with a layer exceeding two centimeters thick spanning 5.6 kilometers from the rupture site, resulting in the loss or harm of over 2,700 animals.
In response to the spill, South Bow stated that it took proactive remedial actions before receiving formal directives from U.S. authorities, completing the cleanup process by February 2024. The company’s spokeswoman, Sara Hunter, mentioned that extensive inspections and remediation efforts have been undertaken to bolster the integrity of the Keystone system and ensure safe and reliable pipeline operations.
It is worth noting that at the time of the spill, TC Energy Corp. owned the pipeline, which was later transferred to South Bow in late 2024. The Keystone pipeline has a history of spills, with a notable incident in April 2025 resulting in an estimated 3,500 barrels of oil leaking onto agricultural land in North Dakota.
Looking ahead, South Bow has intentions to enhance its cross-border crude pipeline network. Recently, the company solicited bids for its Prairie Connector project, leveraging existing pipeline infrastructure originally designated for the defunct Keystone XL expansion. The Prairie Connector initiative aims to connect with a proposed pipeline by Bridger Pipeline LLC, linking the Canada-U.S. border to Wyoming.
