The operator of the Keystone Pipeline system has reached a proposed legal settlement with the U.S. government and the state of Kansas to pay $26.9 million in civil penalties following a major oil spill in 2022. The agreement, filed in U.S. District Court, aims to resolve allegations that the company, South Bow, violated federal and state clean water laws during the incident. In addition to the penalty, the company has committed to spending approximately $40 million on safety improvements to prevent future accidents and will contribute over $3 million toward environmental restoration projects in Kansas.
The spill occurred in December 2022 when a rupture in the pipeline released nearly 13,000 barrels of heavy crude oil into a creek in Washington County, Kansas. The incident was the largest onshore crude oil spill in the United States in nine years, affecting local prairie and cropland. While no residents or workers were injured and public water supplies remained unaffected, the spill resulted in significant environmental damage, including the loss of more than 2,700 animals.
South Bow, which was spun off from TC Energy in 2024, has disputed the government's allegations and does not acknowledge legal liability as part of the proposed settlement. The company stated that it proactively began cleanup efforts immediately following the rupture. The agreement, which is intended to avoid lengthy litigation, is subject to approval by a judge following a 30-day public comment period.