South Bow Agrees to $70 Million Settlement Over Kansas Oil Spill

The United States Department of Justice and the Environmental Protection Agency reached a proposed settlement on July 10, 2026, with South Bow Corp. and its affiliates regarding a massive oil spill in Washington County, Kansas. The agreement resolves Clean Water Act and state law violations stemming from a December 7, 2022, rupture of the Keystone pipeline. The leak released approximately 14,000 barrels, or 588,000 gallons, of crude oil into Mill Creek, creating a 3.5-mile slick that killed or sickened 2,700 animals.

Under the terms of the consent decree, South Bow will pay a civil penalty of approximately $26.9 million and provide more than $3 million to the state of Kansas for natural resource restoration projects. Additionally, the company will invest an estimated $40 million in preventative infrastructure work to avoid future discharges. Investigations attributed the failure to a weld crack caused by pressure and temperature fatigue at an overstressed bend where soil had been improperly compacted during construction.

At the time of the spill, the pipeline was owned by TC Energy, which spun off its oil pipeline business into South Bow in late 2024. South Bow completed remediation efforts in February 2024, at an estimated cleanup cost of $480 million. The settlement is currently subject to a 30-day public comment period before the U.S. District Court for the District of Kansas.