A proposed legal settlement with the U.S. government would require the operator of the Keystone Pipeline system, South Bow, to pay a $26.9 million civil penalty following a major oil spill in Kansas in December 2022. The agreement, filed in U.S. District Court in Kansas, would also require the Canada-based company to spend approximately $40 million to prevent future accidents and more than $3 million on environmental restoration projects in Kansas. The settlement aims to resolve allegations from the U.S. Environmental Protection Agency and the state of Kansas that the company violated clean water laws.
The rupture released nearly 13,000 barrels of heavy crude oil into a creek in a rural pasture in Washington County, Kansas, located about 150 miles northwest of Kansas City. This event marked the largest onshore crude pipeline spill in the U.S. in nine years, surpassing all 22 previous spills on the same system combined. While public water supplies were not affected and no residents or workers were injured, officials stated the spill blanketed land and water, rendering the waterway lifeless.
A complaint filed by the U.S. government states that more than 2,700 animals were harmed or killed in the spill, affecting an area home to the endangered long-eared bat. Investigations revealed that a bend in the pipeline had been overstressed since its 2010 installation due to improperly compacted soil. Although the site was re-excavated in 2013, the problematic section of the pipe was not replaced.
South Bow, which was spun off as a separate firm from TC Energy in 2024, stated it proactively began cleaning up the area before receiving directives from U.S. officials. The cleanup process was completed in early 2024. A judge must now approve the proposed decree following a 30-day public comment period.