South Bow, the company operating the Keystone pipeline system, has reached a proposed legal settlement with the United States government over a substantial oil spill that occurred in Kansas in December 2022. The agreement would see the Canadian-based firm pay a civil penalty of $26.9 million (approximately £21 million) and commit an additional $40 million to implement measures designed to prevent future accidents. Furthermore, Kansas is set to receive over $3 million from South Bow for environmental restoration projects under the proposed decree.
The settlement aims to resolve allegations from the US Environmental Protection Agency (EPA) and the state of Kansas that South Bow violated US and state clean water laws. The incident, which took place in Washington County, Kansas, approximately 150 miles north-west of Kansas City, saw nearly 13,000 barrels of heavy crude oil discharged into a rural creek. This volume of oil was equivalent to almost filling an Olympic-sized swimming pool and marked the largest onshore crude pipeline spill in the US in nine years, surpassing all 22 previous spills on the same pipeline system combined, according to a 2021 report from the US Government Accountability Office.
Jeffrey Hall, the EPA’s assistant administrator for its enforcement office, emphasised the severity of the environmental damage caused. He stated that the oil spill “blanketed land and water, rendering the waterway lifeless and useless and requiring extensive cleanup and remediation,” adding that the substantial penalty reflects the seriousness of this harm. While no pipeline workers or local residents were reported injured, and public water supplies remained unaffected, a complaint filed alongside the proposed settlement noted that over 2,700 animals were harmed or killed, including the long-eared bat, an endangered species in the area.
South Bow spokesperson Sara Hunter confirmed the company’s proactive response to the spill, stating that comprehensive environmental remediation was completed in February 2024. She also highlighted that since the incident, the company has undertaken over 12,000 miles of pipeline inspections and 400 excavations to examine and repair pipes where necessary. Hunter affirmed the company’s “ongoing commitment to the safe, reliable operation of our pipeline system and to continuously strengthening pipeline integrity.”
The company that originally constructed the pipeline, TC Energy, spun off South Bow as a distinct entity in 2024, after the Kansas cleanup operations were finalised. A May 2023 report by an engineering consulting firm for the US government suggested that a bend in the Keystone system where the spill occurred had been “overstressed” since its installation in December 2010, likely due to construction activities altering the surrounding land. The recent court complaint further detailed that soil under the pipe was “improperly compacted” and that while the company re-excavated the site in 2013, that specific section of pipe was not replaced.
The 2,689-mile Keystone system is crucial for transporting thick, Canadian tar sands oil to refineries situated in Illinois, Oklahoma, and Texas. This incident underscores ongoing environmental concerns surrounding oil pipeline infrastructure, especially in the context of recent developments such as the approval by Donald Trump in April for South Bow and another company to construct a second, smaller pipeline from Canada to Wyoming. This new project aims to be a scaled-down version of the previously blocked Keystone XL pipeline, which the Biden administration halted in 2021 due to environmental objections.