The U.S. Department of Justice has come to an agreement with South Bow Corp, a pipeline company, concerning a rupture in the Keystone pipeline in 2022 that resulted 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 fine of $26.9 million relating to allegations of Clean Water Act violations.
Additionally, South Bow has committed to investing approximately $40 million to implement measures to prevent similar incidents in the future and allocate $3 million for state natural resource restoration projects to address infractions of state regulations. The Justice Department highlighted that this spill was one of the largest inland oil spills in recent memory and the biggest from the Keystone pipeline network, which stretches from Hardisty, Alberta, to Port Arthur, Texas.
Adam Gustafson, the deputy assistant attorney general, emphasized the significance of the company’s pledge to prevent future leaks, stating, “When a pipeline experiences a leak, the consequences can be severe.” Jeffrey Hall, Assistant Administrator at the U.S. Environmental Protection Agency, emphasized the necessity of maintaining pipelines properly, underscoring the extensive impact of the oil spill on land and water resources.
The Justice Department reported that the spill resulted in a thick layer of crude oil covering Mill Creek bank-to-bank for a distance of 5.6 kilometers from the rupture point, with over 2,700 animals either killed or injured. South Bow stated in a press release that it took proactive measures to address the issue even before receiving formal directives from U.S. authorities, with site cleanup completed by February 2024.
South Bow’s spokesperson, Sara Hunter, mentioned that the company has conducted inspections on nearly 3,400 kilometers of the Keystone system and executed over 70 digs to confirm the line’s integrity. The company has also utilized advanced technologies for in-line inspections on more than 19,000 kilometers of pipe and conducted 400 field excavations to assess and repair pipeline conditions, demonstrating their ongoing dedication to ensuring the safe and reliable operation of their pipeline system.
Originally part of TC Energy Corp., the pipeline was transferred to South Bow in late 2024. The Keystone pipeline system has a history of spills, with a notable incident in April 2025 where an estimated 3,500 barrels leaked onto agricultural land in North Dakota. South Bow is looking to expand its cross-border crude pipeline network, including the Prairie Connector project, which aims to repurpose unused pipeline infrastructure for the Keystone XL expansion project, connecting to a pipeline proposed by Bridger Pipeline LLC from the Canada-U.S. border to Wyoming.