The U.S. Department of Justice has finalized an agreement with South Bow Corp., a company involved in a 2022 incident where the Keystone pipeline ruptured in northern Kansas, causing a spill of nearly 13,000 barrels of oil. As part of the settlement, the Calgary-based firm will pay a $26.9 million civil penalty for Clean Water Act violations.
Additionally, South Bow has committed to investing approximately $40 million in preventive measures to avoid similar incidents in the future. The company will also contribute $3 million towards natural resource restoration projects to address state law violations.
According to the Justice Department, the spill was one of the largest inland oil spills in recent times and the biggest within the Keystone pipeline network, which stretches from Hardisty, Alberta, to Port Arthur, Texas. Adam Gustafson, deputy assistant attorney general, emphasized the importance of proactive measures to prevent future leaks.
Jeffrey Hall, an official from the U.S. Environmental Protection Agency, highlighted the significance of maintaining pipelines properly, citing the extensive impact of the oil spill on the environment. The spill covered a 5.6-kilometer stretch of Mill Creek with crude oil over two centimeters thick, resulting in the harm or death of more than 2,700 animals.
South Bow stated that it took corrective actions before receiving formal directives from U.S. authorities, including completing site cleanup by February 2024. The company’s spokeswoman, Sara Hunter, mentioned ongoing efforts to strengthen the pipeline system through inspections and remedial work.
The Keystone pipeline, previously owned by TC Energy Corp., experienced previous spills, including a 3,500-barrel spill in North Dakota in April 2025. South Bow is looking to expand its cross-border crude pipeline system, with plans such as the Prairie Connector project, connecting to a pipeline proposed by Bridger Pipeline LLC from the Canada-U.S. border to Wyoming.