WASHINGTON COUNTY, Kan. — Federal and state authorities announced a settlement Friday that will require the company operating the Keystone Pipeline to pay nearly $70 million in penalties, restoration funding and infrastructure work tied to the December 2022 rupture that released more than 540,000 gallons of oil into Mill Creek and surrounding land.
What the agreement requires
The settlement, announced by the U.S. Environmental Protection Agency and the Department of Justice and outlined in an EPA release, holds South Bow LP — the operator of the portion of the Keystone system that ruptured — responsible for a civil penalty and a series of remediation and prevention measures.
- Civil penalty: roughly $26 million to $27 million to the federal government;
- Pipeline integrity and repairs: about $40 million in work to prevent future spills, according to agency estimates;
- State restoration funds: $3 million to the state of Kansas for natural resource restoration projects related to the spill.
| Item | Amount |
|---|---|
| Civil penalty (federal) | $26–27 million |
| Pipeline repairs and prevention projects | $40 million |
| Kansas natural resource restoration | $3 million |
| Approximate total | $69–70 million |
Background and local impact
The pipeline ruptured in December 2022 near Washington, northwest of Topeka, discharging an estimated 543,000 gallons of crude into Mill Creek and adjacent prairie and cropland. The spill was the largest in the pipeline system’s history and had documented impacts on wildlife and agricultural land. Federal investigators reported oil residue across roughly 35 acres surrounding the discharge. Officials said more than 2,700 animals were killed or harmed by the contamination.
Jeffrey A. Hall, assistant administrator for the EPA’s Office of Enforcement and Compliance Assurance, framed the settlement as a response to the scale of environmental harm. In the agency release he said the 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."
"This case demonstrates why the oil pipelines crossing our heartland must be maintained properly," Hall said in the EPA statement.
U.S. Attorney Ryan A. Kriegshauser for the District of Kansas called the incident a "massive impact on the State of Kansas" and said the settlement would help mitigate damage. Jim Macy, administrator for EPA Region 7, noted the thousands of hours that federal staff logged during cleanup efforts and described the agreement as a demonstration of federal-state partnership to protect waters and prevent future spills.
Who is responsible and how the company has changed
At the time of the spill the Keystone system was owned by Canadian energy company TC Energy. That portion of the business was spun off in 2024 into South Bow, which now operates the segment that ruptured. According to statements by company and federal investigators, the rupture stemmed from a faulty weld that caused an "instantaneous rupture" and the rapid release of tar-like crude oil.
What changes for Kansas residents
Residents near Mill Creek and across the affected watershed can expect the settlement to fund:
- Natural resource restoration projects paid in part by the $3 million state contribution;
- Inspections, repairs and infrastructure upgrades the company must complete to reduce the risk of future ruptures;
- Longer-term monitoring of water and soil in impacted areas as remediation projects proceed.
Officials said details and timelines for specific restoration projects and preventive measures would be provided as the federal and state agencies move forward with implementation and oversight. The EPA’s legal complaint cited violations of the Clean Water Act and documented the presence of oil residues on land and in waterways that required extensive cleanup.
The settlement brings to a close the enforcement phase of one of the largest inland oil spills in recent Kansas history, but officials emphasized continued oversight to ensure the company follows through on remediation and integrity work.
Cole Bergman
Kansas Correspondent, News Block
