The operator of the Keystone pipeline system will pay $26.9 million in civil penalties and spend roughly $40 million more on safety upgrades to resolve federal allegations stemming from a December 2022 oil rupture in rural Kansas, under a proposed settlement filed in federal court Friday.
South Bow, the Canadian company that runs Keystone, violated clean water laws when the pipeline ruptured near Washington County, Kansas, spilling nearly 13,000 barrels of heavy crude oil into a creek. The spill was the largest onshore pipeline rupture in the United States over nine years and exceeded the total volume of 22 previous incidents on the same system combined.
The volume alone painted a stark picture: enough crude to nearly fill an Olympic swimming pool. The thick crude oil blanketed land and water across the rural pasture, rendering the waterway lifeless and triggering extensive cleanup and remediation operations.
South Bow will also transfer more than $3 million to Kansas for environmental restoration projects. The agreement requires approval from a federal judge after a 30-day public comment period, with the EPA and state of Kansas filing the complaint that sparked the settlement.
The incident caused no injuries to pipeline workers or area residents, and public water supplies remained unaffected. However, the government's complaint documented substantial ecological damage, with more than 2,700 animals harmed or killed in the spill zone. The region is home to long-eared bats, an endangered species.
South Bow's statement emphasized swift action. The company said it launched remediation before formal government directives and completed comprehensive cleanup by February 2024. Since then, it has completed more than 12,000 miles of pipeline inspections and 400 excavations to examine and repair sections where necessary.
Engineers identified root cause in a May 2023 report: the section where rupture occurred had been overstressed since installation in December 2010, likely due to construction activity that altered the ground around the pipe. Soil beneath the pipe was improperly compacted, and although the company excavated the site in 2013, it never replaced that section of pipe with new material.
The Keystone system stretches 2,689 miles, transporting Canadian tar sands oil to refineries in Illinois, Oklahoma, and Texas. Parent company TC Energy spun off South Bow as a separate entity in 2024, after the Kansas cleanup concluded.
The settlement arrives as pipeline development resumes under new political winds. In April, Trump approved South Bow and another company to build a second pipeline corridor from Canada to Wyoming, a smaller-scale project that echoes the $8 billion Keystone XL pipeline that President Biden blocked in 2021 on environmental grounds.
Author James Rodriguez: "A $27 million fine and $40 million in upgrades sound hefty until you consider the spill was the worst in a decade, and the company had known since 2013 it needed to replace that bad section of pipe."
Comments