Keystone Pipeline Owner Agrees to $26.8 Million Spill Settlement
The Keystone Pipeline owner has agreed to pay a $26.9 million civil penalty and complete about $40 million in integrity improvements under a proposed settlement tied to the 2022 Kansas oil spill.
(P&GJ) — The U.S. Department of Justice has filed a proposed settlement requiring the owner and operator of the Keystone Pipeline to pay a $26.9 million civil penalty and complete an estimated $40 million in pipeline integrity improvements to resolve alleged Clean Water Act violations tied to the pipeline's 2022 rupture in Washington County, Kansas.
The proposed consent decree, filed on behalf of the U.S. Environmental Protection Agency and the State of Kansas, resolves allegations against South Bow (USA) LP and South Bow Infrastructure Operations Inc. related to the release of nearly 13,000 barrels (approximately 543,000 gallons) of crude oil on Dec. 7, 2022.
According to the Justice Department, the spill was the largest discharge in the Keystone Pipeline system's history and one of the largest inland crude oil spills in recent U.S. history.
In addition to the federal civil penalty, South Bow agreed to contribute more than $3 million to the State of Kansas for natural resource restoration projects.
The settlement also requires the company to implement measures intended to reduce the likelihood of similar releases.
Principal Deputy Assistant Attorney General Adam Gustafson said preventing future pipeline failures is a key component of the agreement.
"An important part of this proposed settlement is the work the company has committed to do to help prevent future leaks," Gustafson said.
The EPA said the rupture released crude oil into Mill Creek, where oil covered approximately 3.5 miles of the waterway and affected surrounding land and wildlife. State officials issued a stream advisory prohibiting contact with the creek by people, livestock and pets, while cleanup efforts restored aquatic habitat, stream banks and surrounding areas following a 2023 EPA cleanup order.
EPA Assistant Administrator Jeffrey A. Hall said the settlement reflects both the environmental damage caused by the release and the need to strengthen pipeline integrity.
"The substantial penalty reflects the seriousness of the environmental harm, and the other requirements of the settlement reflect the need to prioritize pipeline integrity and maintenance for this critical infrastructure," Hall said.
The 2,687-mile Keystone Pipeline transports crude oil from Hardisty, Alberta, to Port Arthur, Texas. The rupture occurred on the section between Steele City, Nebraska, and Cushing, Oklahoma.
The proposed consent decree is subject to a 30-day public comment period before it can receive final court approval.