Nearly three years after nearly 13,000 barrels of crude oil gushed into a Kansas creek and triggered one of the most significant environmental disasters in American pipeline history, the owner and operator of the Keystone Pipeline has agreed to pay more than $26 million to resolve violations of the Clean Water Act — with the total financial reckoning climbing closer to $70 million when prevention work and state penalties are included.

The US Department of Justice, acting on behalf of the Environmental Protection Agency and the state of Kansas, filed a proposed settlement Friday with South Bow LP and South Bow Infrastructure Operations Inc., the companies responsible for the pipeline that ruptured on December 7, 2022, near Washington, Kansas, sending a torrent of crude oil into Mill Creek and setting off a round-the-clock cleanup effort that would last more than a month and consume the labor of hundreds of workers.

The Numbers Behind the Settlement

The proposed agreement carries a civil penalty of $26,867,789 — a figure calibrated to the scale and severity of a spill that fouled a Kansas waterway, disrupted local ecosystems, and exposed the systemic vulnerabilities of infrastructure that regulators now say had been under stress for more than a decade.

But the financial obligations do not end there. South Bow has also agreed to complete remediation and prevention work that the company itself estimates will cost approximately $40 million — engineering and structural improvements designed to prevent a repeat of the conditions that caused the rupture. On top of the federal penalty, South Bow agreed to pay the state of Kansas an additional $3 million, earmarked specifically for natural resource restoration projects addressing violations of Kansas state environmental law.

In total, the settlement commits South Bow to expenditures approaching $70 million — a number that reflects not just the cost of the spill's immediate aftermath, but the price of operating aging infrastructure without adequate safeguards.

The Spill That Rewrote Pipeline Records

The December 2022 rupture near Washington, Kansas, was not a minor incident buried in regulatory filings. It was the largest oil spill in the Keystone Pipeline's operational history — a distinction that brought the pipeline renewed and unwelcome scrutiny from federal regulators, environmental advocates, and the communities living downstream from its path.

The numbers are staggering in their specificity. Nearly 13,000 barrels of crude oil — more than 650,000 gallons — poured into Mill Creek, a waterway that connects to a broader watershed and whose contamination required emergency response operations running 24 hours a day, seven days a week, for just over a month. The EPA declared the major phase of the cleanup complete on October 31, 2023 — nearly a full year after the rupture first occurred.

The pipeline's operator at the time, TC Energy, attributed the failure to structural stress on the pipe combined with what it described as "a weld flaw" — a term that, in the context of infrastructure carrying hundreds of thousands of barrels of crude oil daily, carries enormous consequences when it fails.

Twelve Years of Stress — and Nobody Stopped It

The most damning detail in the regulatory record surrounding the spill does not come from the cleanup reports or the settlement filing. It comes from a third-party investigation conducted by the Pipeline and Hazardous Materials Safety Administration, the federal agency responsible for pipeline safety oversight.

That report concluded the Keystone Pipeline had been operating under stress for approximately 12 years before the December 2022 rupture — meaning the conditions that produced the largest spill in the pipeline's history were not sudden, not unforeseeable, and not the product of an isolated manufacturing defect. They were the accumulated product of more than a decade of strain that inspection and maintenance protocols failed to catch, flag, or correct before the pipe gave way and 650,000 gallons of crude oil found their way into Mill Creek.

That finding — 12 years of stress, one catastrophic rupture — forms the moral and regulatory core of everything the settlement is designed to address.

Prevention as Part of the Price

The $40 million in prevention work that South Bow has agreed to undertake is, in some respects, the most consequential component of the settlement. Civil penalties punish past conduct. Prevention expenditures are meant to change future behavior — to force the kind of structural investment in integrity management that, had it been made earlier, might have identified and corrected the weld flaw and stress conditions before they produced a disaster.

Whether $40 million in future prevention work is commensurate with 12 years of inadequate oversight of a pipeline carrying crude oil through the American heartland is a question the settlement does not answer. What it does answer — at least partially — is who pays for the consequences: the company that owned and operated the pipeline, to the tune of nearly $70 million in combined penalties and remediation costs.

What the Settlement Means for Kansas

The $3 million directed to Kansas for natural resource restoration represents a recognition that the spill's impact was not merely regulatory — it was ecological and local. Mill Creek and the surrounding watershed absorbed the environmental consequences of the rupture, and the communities and ecosystems along that waterway are entitled to investment in their recovery.

The proposed settlement is subject to a period of public comment before it receives final court approval — a standard procedural step that allows citizens, environmental groups, and other stakeholders to weigh in on whether the terms adequately address the harm caused.

For the Keystone Pipeline, the Washington, Kansas, rupture of December 2022 will stand as the defining moment of its operational history — the day a weld flaw that had been building for 12 years finally gave way, and the bill for that failure came due.