A proposed legal settlement with the U.S. government would require South Bow, the operator of the Keystone Pipeline system, to pay a $26.9 million civil penalty over a major oil spill in Kansas in December 2022 and spend about $40 million more on measures to prevent future accidents.

The agreement would resolve allegations from the U.S. Environmental Protection Agency and Kansas that South Bow, based in Canada, violated federal and state clean water laws. The rupture dumped nearly 13,000 barrels of heavy crude oil into a creek running through rural Washington County, Kansas, about 150 miles northwest of Kansas City. The cleanup was completed early in 2024.

What the Right Is Saying

South Bow has disputed the government's allegations and does not acknowledge any legal liability in the proposed agreement. The company told The Canadian Press that it "proactively" began cleaning up the area before receiving directives from U.S. officials.

The proposed settlement states that both parties are avoiding litigation and that the settlement would be "fair, reasonable and in the public interest."

Pipeline industry supporters have emphasized that no pipeline workers or area residents were injured in the incident, and officials said public water supplies were not affected by the spill.

An engineering consulting firm's May 2023 report for the U.S. government found that a bend in the Keystone system where the spill occurred had been "overstressed" since its installation in December 2010, likely because construction activity altered the land around the pipe. The complaint noted that while the company re-excavated the site in 2013, it did not replace that section of pipe.

What the Left Is Saying

Environmental advocates and Democratic officials have pointed to the spill as evidence of the risks posed by pipeline infrastructure and have called for stricter oversight.

Jeffrey Hall, the EPA's assistant administrator for its enforcement office, said in a statement: "The oil spill blanketed land and water, rendering the waterway lifeless and useless and requiring extensive cleanup and remediation. The substantial penalty reflects the seriousness of the environmental harm."

Environmental groups noted that according to federal data analyzed by the Government Accountability Office, this was the largest onshore crude pipeline spill in the United States in nine years and surpassed all 22 previous spills on the same pipeline system combined.

The government's complaint filed along with the proposed settlement said more than 2,700 animals were harmed or killed as a result of the spill. The affected area is home to an endangered species, the long-eared bat.

What the Numbers Show

$26.9 million: Civil penalty South Bow has agreed to pay under the proposed settlement.

Approximately $40 million: Additional amount South Bow would spend on preventive measures and system upgrades.

More than $3 million: What South Bow would pay Kansas for environmental restoration projects.

Nearly 13,000 barrels: Amount of heavy crude oil that spilled into the Kansas creek in December 2022.

2,700+: Number of animals harmed or killed by the spill, according to government estimates.

2,689 miles: Total length of the Keystone pipeline system, which carries Canadian tar sands oil to refineries in Illinois, Oklahoma and Texas.

The Bottom Line

A judge would have to approve the proposed decree after a 30-day public comment period. South Bow officials did not immediately respond to requests for further comment on the settlement.

The case highlights ongoing debates over pipeline safety regulation and enforcement. In April, President Donald Trump gave approval for South Bow and another company to build a second pipeline from Canada to Wyoming, a smaller version of the $8 billion Keystone XL project that former President Joe Biden's administration blocked in 2021 over environmental concerns.

Environmental advocates are likely to argue that even with the penalty and preventive spending requirements, questions remain about oversight of aging pipeline infrastructure. Industry supporters may contend that the settlement demonstrates the effectiveness of the regulatory framework in holding operators accountable while allowing operations to continue.