U.S. Justice Dept reaches deal with South Bow on Keystone spill in Kansas in 2022

The Department of Justice seal is seen during a news conference at the DOJ office in Washington, May 16, 2023. (AP Photo/Jose Luis Magana, File)

CALGARY — The U.S. Justice Department has reached a settlement agreement with pipeline company South Bow Corp. regarding a 2022 rupture of the Keystone pipeline that spilled nearly 13,000 barrels of oil.

Under the deal, the company will pay a civil penalty of US$26.9 million related to allegations it violated the Clean Water Act.

South Bow has also agreed to spend about US$40 million to complete work to prevent similar problems in the future and pay US$3 million to Kansas for natural resource restoration projects to resolve violations of state laws.

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The Keystone Pipeline system runs from Hardisty, Alta., to Port Arthur, Texas. The rupture happened on Dec. 7, 2022, in a section of the pipeline that stretches from Steele City, Neb., to Cushing, Okla., and sent oil into Mill Creek.

Following a 2023 cleanup order, the company removed oil from the creek and surrounding areas and completed restoration of aquatic habitat, stream banks and shorelines.

TC Energy spun off its oil pipeline business into South Bow in late 2024.

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Lauren Krugel, The Canadian Press

This report by The Canadian Press was first published July 10, 2026.