Keystone Spill Settlement
Keystone Pipeline Owners Agree to $26 Million Settlement for 2022 Kansas Oil Spill
Key Points
The rupture was caused by a crack in a weld that progressed due to pressure and temperature fatigue.
The incident was first reported on December 7, 2022, with nearly 13,000 barrels (about 543,000 gallons) leaking from the Keystone pipeline.
Adam Gustafson, Principal Deputy Attorney General for the DOJ’s ENRD, said, 'Pipelines are the safest means of transporting large quantities of oil and other liquids and gases over long distances. However rare, when a pipeline leaks, it can quickly escalate.'
Jeffrey A. Hall, EPA Assistant Administrator for Enforcement and Compliance Assurance, said, 'This case demonstrates why the oil pipelines crossing our heartland must be maintained properly.'
The U.S. Justice Department has reached a $70 million-plus settlement with South Bow, the owner and operator of the Keystone Pipeline, over a 2022 oil spill in Kansas that poured nearly 543,000 gallons of crude oil onto land and into a local waterway, according to KCTV5. The deal includes a $26.9 million civil penalty, $40 million in pipeline safety upgrades, and more than $3 million to restore natural resources in Kansas.
The December 7, 2022 rupture on the Keystone system in Washington County, Kansas spilled roughly 13,000 barrels of oil into Mill Creek. GV Wire reports it was one of the largest inland oil spills on record — and the biggest ever from the Keystone pipeline.
A Cracked Weld Caused the Massive 2022 Spill
Investigators found the rupture started with a crack in a pipeline weld. Pressure and temperature changes over time made the crack grow until the pipe gave way. The spill sent oil flooding into Mill Creek, a Kansas waterway, causing serious environmental damage to the surrounding land and water.
The Keystone Pipeline carries oil from Canada to refineries in the United States. A failure of this size drew immediate attention from federal and state agencies. KQ2 reported that the Justice Department filed both a complaint and a consent decree against South Bow LP and South Bow Infrastructure Operations Inc. to hold the company accountable.
Settlement Totals Over $70 Million in Penalties and Fixes
The proposed settlement breaks down into three parts. South Bow must pay a $26.9 million civil penalty to the government. The company must also spend $40 million on work to prevent future leaks. On top of that, more than $3 million goes directly to restoring natural resources damaged in Kansas, according to GV Wire.
Bloomberg Law noted the deal resolves alleged violations of the Clean Water Act. A court must still approve the consent decree before it takes full effect. The settlement does not require South Bow to admit wrongdoing, but it does bind the company to strict pipeline safety requirements going forward.
Officials Warn Pipelines Must Be Kept in Top Shape
Top federal officials used the settlement to send a clear message to the pipeline industry. EPA Assistant Administrator Jeffrey A. Hall said, "This case demonstrates why the oil pipelines crossing our heartland must be maintained properly." His words point to wider concerns about aging pipeline infrastructure across the country.
DOJ Principal Deputy Attorney General Adam Gustafson acknowledged that pipelines are generally safe. "Pipelines are the safest means of transporting large quantities of oil and other liquids and gases over long distances," he said. "However rare, when a pipeline leaks, it can quickly escalate." The 543,000-gallon spill in Kansas proved that point dramatically.
Keystone Pipeline Faces Growing Scrutiny Across the Heartland
The Keystone system has faced repeated criticism over its environmental risks. This 2022 rupture was the largest spill in the pipeline's history. KCTV5 reported that the damage to Mill Creek was severe, raising questions about how well pipeline operators monitor and maintain their systems in rural areas far from major cities.
The settlement signals that regulators plan to hold pipeline companies to a high standard. The $40 million in required safety work is meant to stop future spills before they start. Authorities say they will watch South Bow closely to make sure the company follows through on every part of the agreement, according to KQ2.
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