Company Agrees to Pay More than $26.8M Civil Penalty, Complete Estimated $40M in Work to Prevent Future Discharges, and Pay State of Kansas $3 Million
The Justice Department, on behalf of the Environmental Protection Agency (EPA) and State of Kansas, today filed a complaint and proposed consent decree to resolve allegations that South Bow (USA) LP and South Bow Infrastructure Operations Inc. — the owner and operator of the Keystone Pipeline — violated the Clean Water Act related to the 2022 rupture of the Keystone Pipeline in Washington County, Kansas.
On Dec. 7, 2022, nearly 13,000 barrels of oil (approximately 543,000 gallons) leaked from the ruptured pipeline over land and into Mill Creek, creating an imminent and substantial threat to human health and the environment. The event was one of the largest inland oil spills in recent history, and the largest discharge ever from the Keystone Pipeline system.
As part of the settlement, South Bow has agreed to pay a civil penalty of $26,867,789 and complete work designed to prevent future similar discharges, which South Bow estimates will cost approximately $40 million. South Bow has also agreed to contribute over $3 million to the state of Kansas towards natural resource restoration projects to resolve violations of Kansas state laws.
“Pipelines are the safest means of transporting large quantities of oil and other liquids and gases over long distances,” said Principal Deputy Assistant Attorney General Adam Gustafson of the Justice Department’s Energy and Natural Resources Division (ENRD). “However rare, when a pipeline leaks, it can quickly escalate. That’s why an important part of this proposed settlement is the work the company has committed to do to help prevent future leaks.”
“This case demonstrates why the oil pipelines crossing our heartland must be maintained properly. The oil spill blanketed land and water, rendering the waterway lifeless and useless and requiring extensive cleanup and remediation,” said Assistant Administrator Jeffrey A. Hall for EPA’s Office of Enforcement and Compliance Assurance. “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.”
“It is important that we are all good stewards of the environment,” said U.S. Attorney Ryan A. Kriegshauser for the District of Kansas. “The incident had a massive impact on the State of Kansas, and we are happy that this settlement will mitigate that damage.”
“Dedicated EPA staff logged many thousands of hours cleaning up Mill Creek and were supported by multiple federal and state agencies,” said Administrator Jim Macy of EPA Region 7. “This fair and comprehensive settlement represents a federal-state partnership commitment to protect our nation’s waters and prevent future oil spills.”
According to the complaint, after the 2022 spill, crude oil an inch thick covered Mill Creek bank-to-bank for 3.5 miles downstream of the rupture site. The Kansas Department of Health and Environment issued a stream advisory for Mill Creek to prohibit contact with the creek by people, livestock, or pets. The discharge covered vegetation and soil in the immediately surrounding area, and oil residue was found in the 35 acres surrounding the discharge. The spill killed or impacted more than 2,700 animals.
Following a 2023 EPA cleanup order, South Bow removed oil from the creek and surrounding areas and completed restoration of aquatic habitat, stream banks, and shorelines.
The Keystone Pipeline is a 2,687-mile liquid oil pipeline system between Hardisty, Alberta, Canada, and Port Arthur, Texas. The rupture occurred in a section of the pipeline that stretches from Steele City, Nebraska, to Cushing, Oklahoma.
The consent decree was filed with the U.S. District Court for the District of Kansas and is subject to a 30-day public comment period. The complaint and proposed consent decree are available at www.justice.gov/enrd/consent-decrees.
The Environmental Protection Agency investigated this matter. More information on the settlement is available on EPA’s South Bow Clean Water Act settlement summary: www.epa.gov/enforcement/south-bow-lp-cwa-settlement-summary.
Attorneys with ENRD’s Environmental Enforcement Section and the U.S. Attorney’s Office for the District of Kansas are handling this matter.