Keystone pipeline operator agrees to pay $26.9m penalty over Kansas oil spill
Canada-based South Bow, operator of the Keystone pipeline, has agreed to pay $26.9 million in civil penalties and spend about $40 million on preventive measures after a 2022 oil spill in Kansas that released nearly 13,000 barrels of crude.
The proposed settlement with the U.S. government resolves allegations by the Environmental Protection Agency (EPA) and the state of Kansas that South Bow violated federal and state clean water laws. The rupture in December 2022 dumped approximately 13,000 barrels of heavy crude oil into a creek in rural Washington County, Kansas, about 150 miles northwest of Kansas City.
It was the largest onshore crude pipeline spill in the U.S. in nine years and surpassed all 22 previous spills on the same pipeline system combined, according to a 2021 Government Accountability Office report. The volume spilled could have nearly filled an Olympic-sized swimming pool.
Under a proposed consent decree filed Friday in U.S. District Court in Kansas, South Bow would also pay Kansas more than $3 million for environmental restoration projects. A judge must approve the decree after a 30-day public comment period.
"The oil spill blanketed land and water, rendering the waterway lifeless and useless and requiring extensive cleanup and remediation," said Jeffrey Hall, EPA’s assistant administrator for enforcement. "The substantial penalty reflects the seriousness of the environmental harm."
South Bow spokesperson Sara Hunter said in an emailed statement Sunday that the company "proactively" responded to the spill before receiving formal directives, including comprehensive environmental remediation completed in February 2024. Since the spill, the company has conducted over 12,000 miles of pipeline inspections and 400 excavations to examine and repair pipe.
TC Energy, which built the pipeline, spun off South Bow as a separate company in 2024 after the Kansas cleanup was finished.
No pipeline workers or area residents were injured, and public water supplies were not affected. However, a complaint filed Friday by the U.S. government said more than 2,700 animals were harmed or killed. The area is home to the endangered long-eared bat.
A May 2023 report for the U.S. government by an engineering consulting firm stated that a bend in the Keystone system where the spill occurred had been "overstressed" since its installation in December 2010, likely due to construction altering the land around the pipe. The Friday court complaint added that soil under the pipe was "improperly compacted" and that although the company re-excavated the site in 2013, it did not replace that section of pipe.
The 2,689-mile Keystone system carries thick Canadian tar sands oil to refineries in Illinois, Oklahoma and Texas.
In April, Donald Trump approved South Bow and another company to build a second pipeline from Canada to Wyoming. That pipeline was intended as a smaller version of the $8 billion Keystone XL project, which was blocked by former President Joe Biden’s administration in 2021 over environmental concerns.
