The federal government has unveiled a proposed settlement that would compel the owner and operator of the Keystone Pipeline to pay $26.9 million in civil penalties over a major December 2022 oil spill that released nearly 500,000 gallons of crude into a creek in Kansas.
Under the agreement, the company would also be required to invest an estimated $40 million in measures aimed at preventing similar incidents in the future, according to the U.S. Environmental Protection Agency.
The EPA, working with the Department of Justice and the state of Kansas, alleged that Canada-based South Bow, the pipeline’s operator, violated federal and state clean water laws. The proposed settlement would bring those claims to a close.
The rupture in 2022 sent nearly 13,000 barrels of heavy crude oil into a creek that cuts through rural pastureland in Washington County, Kansas, roughly 150 miles northwest of Kansas City.
The spill was the largest onshore crude pipeline release in the United States in nine years and exceeded the total volume of all 22 prior spills on the same pipeline system combined, according to a 2021 report from the U.S. Government Accountability Office. The amount of oil released was enough to come close to filling an Olympic-size swimming pool.
South Bow would also pay more than $3 million to Kansas for environmental restoration work under a proposed consent decree filed Friday in U.S. District Court in Kansas. The deal still requires approval from a judge following a 30-day public comment period.
“The oil spill blanketed land and water, rendering the waterway lifeless and useless and requiring extensive cleanup and remediation,” Jeffrey Hall, assistant administrator of the EPA’s enforcement office, said in a statement. “The substantial penalty reflects the seriousness of the environmental harm.”
South Bow representatives did not immediately respond Sunday to a phone message and email requesting comment, though the company told The Canadian Press it had “proactively” started cleanup efforts before receiving instructions from U.S. authorities. The cleanup was finished in early 2024.
The company that built the pipeline, TC Energy, spun off South Bow as a separate firm in 2024, after the Kansas cleanup was done.
No pipeline workers or area residents were injured, and officials said public water supplies weren’t affected by the spill. However, a complaint filed Friday by the U.S. government along with the proposed settlement said more than 2,700 animals were harmed or killed. The area is home to an endangered species, the long-eared bat.
In a May 2023 report for the U.S. government, an engineering consulting firm said that a bend in the Keystone system where the spill occurred had been “overstressed” since its installation in December 2010 — likely because construction activity itself altered the land around the pipe. The complaint filed Friday in court said soil under the pipe had been “improperly compacted” and that while the company re-excavated the site in 2013, it did not replace that section of pipe.
The 2,689-mile Keystone system carries thick, Canadian tar sands oil to refineries in Illinois, Oklahoma and Texas.
In April, President Donald Trump gave the go-ahead for South Bow and another company to build a second pipeline from Canada to Wyoming, a smaller version of a massive $8 billion pipeline project known as Keystone XL blocked by former President Joe Biden’s administration in 2021 over environmental concerns.
