The U.S. Department of Justice has settled with South Bow Corp., a pipeline company, over a rupture in the Keystone pipeline in 2022 that resulted in the spill of nearly 13,000 barrels of oil in northern Kansas. As part of the agreement, the company, headquartered in Calgary, will pay a civil penalty of $26.9 million US for Clean Water Act violations.
Additionally, South Bow has committed to investing around $40 million US in preventive measures to avoid similar incidents in the future. The company will also allocate $3 million US towards natural resource restoration projects in the state to address violations of state laws.
According to the Justice Department, this incident marked one of the largest inland oil spills in recent history and the most significant from the Keystone pipeline system, which stretches from Hardisty, Alberta, to Port Arthur, Texas.
Adam Gustafson, the deputy assistant attorney general, emphasized the importance of proactive measures to prevent pipeline leaks, stating, “When a pipeline leaks, it has the potential to escalate rapidly.” The company’s dedication to preventing future leaks was highlighted as a crucial aspect of the settlement.
The Environmental Protection Agency’s assistant administrator, Jeffrey Hall, stressed the significance of proper pipeline maintenance, citing the extensive cleanup and remediation efforts required after the spill, which affected both land and water in the area.
The spill resulted in crude oil covering Mill Creek for 5.6 kilometers from the rupture site, with more than 2,700 animals either killed or harmed. South Bow mentioned that it took corrective actions even before formal directives from U.S. authorities, including completing site cleanup by February 2024.
South Bow’s spokeswoman, Sara Hunter, stated that the company has conducted thorough inspections across the Keystone system, including over 70 digs to verify the pipeline’s integrity. Advanced technologies have been utilized for in-line inspections on more than 19,000 kilometers of pipe, with 400 field excavations performed to assess conditions and make necessary repairs.
Previously owned by TC Energy Corp., the pipeline underwent a transfer to South Bow in late 2024. The Keystone system has a history of spills, with a notable incident in April 2025 involving the spillage of an estimated 3,500 barrels in North Dakota.
South Bow is looking to expand its cross-border crude pipeline system, with plans for the Prairie Connector project, which would repurpose unused pipe from the abandoned Keystone XL expansion project. This project aims to connect with a pipeline proposed by Bridger Pipeline LLC, extending from the Canada-U.S. border to Wyoming.