The U.S. Department of Justice has settled with South Bow Corp, a pipeline company, over a rupture of 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 Calgary-based company will pay a civil penalty of $26.9 million for Clean Water Act violations. South Bow has also committed to spending approximately $40 million on preventive measures and will contribute $3 million for state natural resource restoration projects to address violations of state laws.
The Justice Department described the incident as one of the largest inland oil spills in recent history and the biggest 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 the company’s commitment to preventing future leaks as a crucial aspect of the settlement.
According to Jeffrey Hall, an assistant administrator at the U.S. Environmental Protection Agency, the spill’s impact highlighted the critical need for proper pipeline maintenance. The spill covered Mill Creek with crude oil over two centimeters thick for 5.6 kilometers from the site of the rupture, resulting in the death or harm of more than 2,700 animals.
South Bow stated that it took proactive corrective actions even before receiving formal directives from U.S. authorities, including completing site cleanup by February 2024. The company revealed ongoing efforts to strengthen its pipeline system, with extensive inspections and remedial work carried out to ensure operational safety and integrity.
Formerly under TC Energy Corp., the pipeline was transferred to South Bow in late 2024. The Keystone system has a history of spills, with a notable incident in April 2025 where an estimated 3,500 barrels spilled in North Dakota. South Bow has future plans for expanding its cross-border crude pipeline system, including the Prairie Connector project, which aims to utilize existing infrastructure for pipeline expansion to Wyoming in collaboration with Bridger Pipeline LLC.