The U.S. Department of Justice has finalized an agreement with South Bow Corp, a pipeline company, concerning 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 settlement, the Calgary-headquartered company will pay a civil fine of $26.9 million related to alleged violations of the Clean Water Act.
Additionally, South Bow has committed to investing approximately $40 million to implement measures aimed at preventing similar incidents in the future. The company will also allocate $3 million for natural resource restoration projects to address breaches of state regulations.
According to a recent press release from the Justice Department, the oil spill in question was one of the most significant inland spills in recent memory and the largest within the Keystone pipeline network that stretches from Hardisty, Alberta, to Port Arthur, Texas. Adam Gustafson, the deputy assistant attorney general, emphasized the importance of the company’s pledge to prevent future leaks as a key aspect of the settlement.
Jeffrey Hall, an assistant administrator at the U.S. Environmental Protection Agency, highlighted the critical necessity of maintaining pipelines properly in light of the environmental impact caused by the spill, which left land and water contaminated, necessitating extensive cleanup efforts.
The Justice Department reported that the spill resulted in a thick layer of crude oil covering Mill Creek for 5.6 kilometers from the site of the rupture, leading to the deaths or injuries of over 2,700 animals. South Bow stated in a written communication that it took proactive corrective actions even before formal directives were issued by U.S. authorities, including completing site cleanup 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, with over 70 verification digs to ensure the integrity of the pipeline. She emphasized ongoing efforts to bolster the system through additional remedial and mitigative actions.
The pipeline was under the ownership of TC Energy Corp. at the time of the spill, with South Bow being established as a separate entity focusing on oil pipelines in late 2024. Notably, the Keystone system has experienced previous spills, including an incident in April 2025 where around 3,500 barrels leaked onto agricultural land in North Dakota.
Looking ahead, South Bow has outlined plans to expand its cross-border crude pipeline network. The company recently solicited bids for the Prairie Connector project, which aims to utilize existing infrastructure originally intended for the Keystone XL expansion. The Prairie Connector initiative is set to link up with a proposed pipeline by Bridger Pipeline LLC, connecting the Canada-U.S. border to Wyoming.