The U.S. Justice Department has finalized an agreement with South Bow Corp, a pipeline company, concerning a rupture incident in 2022 that resulted in the spillage of nearly 13,000 barrels of oil in northern Kansas from the Keystone pipeline. As part of the settlement, the Calgary-based company will pay a civil penalty of $26.9 million US for Clean Water Act violations. Additionally, South Bow will allocate approximately $40 million US towards preventative measures to avert future issues and provide $3 million US for state natural resource restoration projects to address state law breaches.
In a recent press release, the Justice Department highlighted that the spill was one of the largest inland oil spills in recent history and the most significant from the Keystone pipeline system, stretching from Hardisty, Alberta, to Port Arthur, Texas. Adam Gustafson, deputy assistant attorney general, emphasized the importance of the company’s commitment to preventing future leaks as a crucial aspect of the settlement.
According to Jeffrey Hall, assistant administrator at the U.S. Environmental Protection Agency, this case underscores the critical need for proper pipeline maintenance. The oil spill severely impacted the environment, covering Mill Creek with crude oil more than two centimeters thick for 5.6 kilometers from the spill site, resulting in the loss or harm of over 2,700 animals.
South Bow stated that it took proactive corrective actions before formal directives were issued by U.S. authorities, including completing site cleanup by February 2024. The company has since inspected nearly 3,400 kilometers of the Keystone system, conducting over 70 verifications to ensure the line’s integrity. Sara Hunter, a spokeswoman for South Bow, emphasized ongoing efforts to strengthen the pipeline system through remedial and mitigative work.
The pipeline, previously owned by TC Energy Corp., experienced historical spills, with around 3,500 barrels spilling onto agricultural land in North Dakota in April 2025. South Bow is looking to expand its cross-border crude pipeline system, including the Prairie Connector project, which would repurpose unused pipelines initially designated for the Keystone XL project. Plans include linking up with a pipeline proposed by Bridger Pipeline LLC from the Canada-U.S. border to Wyoming, enhancing pipeline infrastructure and operations.