The U.S. Department of Justice has finalized an agreement with South Bow Corp., a pipeline company, in relation to a rupture of the Keystone pipeline in 2022 that resulted in the release of approximately 13,000 barrels of oil in northern Kansas.
As part of the settlement, the Calgary-headquartered company will pay a civil penalty of $26.9 million US for allegedly breaching the Clean Water Act. Additionally, South Bow has committed to investing around $40 million US in preventive measures to avoid similar incidents in the future. Furthermore, the company will allocate $3 million US for state natural resource restoration projects to address violations of state laws.
Described as one of the most significant inland oil spills in recent times and the largest from the Keystone pipeline system stretching from Hardisty, Alberta, to Port Arthur, Texas, the incident prompted the Justice Department to take action. Adam Gustafson, deputy assistant attorney general, emphasized the importance of the company’s pledged efforts to deter future leaks, citing the rapid escalation potential of pipeline leaks.
Acknowledging the severity of the spill, Jeffrey Hall, assistant administrator at the U.S. Environmental Protection Agency, highlighted the critical need for proper pipeline maintenance. The extensive impact of the spill was evident as crude oil, more than two centimetres thick, covered 5.6 kilometres of Mill Creek from bank to bank, resulting in the loss or harm of over 2,700 animals.
South Bow stated that it proactively initiated corrective actions even before formal directives from U.S. authorities were received. The cleanup process, including site remediation, was successfully concluded by February 2024.
Providing insights into the company’s ongoing efforts, South Bow spokeswoman Sara Hunter mentioned that extensive inspections and verifications have been conducted on the Keystone system. Over 70 digs have been completed to ensure the line’s integrity, demonstrating the company’s commitment to enhancing the system’s strength and reliability.
Formerly owned by TC Energy Corp., the pipeline experienced previous spills, with an estimated 3,500 barrels leaked in North Dakota in April 2025. South Bow is looking to expand its cross-border crude pipeline system, with plans for the Prairie Connector project, aiming to repurpose unused pipe originally designated for the Keystone XL expansion project. This initiative would connect to a pipeline proposed by Bridger Pipeline LLC, spanning from the Canada-U.S. border to Wyoming.