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Keystone Pipeline system’s operator agrees to pay a $26.9M penalty over a major Kansas oil spill

The proposed settlement would also require about $40 million in prevention measures and more than $3 million for Kansas restoration projects.

  • On Friday, a proposed settlement required South Bow to pay a $26.9 million civil penalty for a 2022 Keystone Pipeline oil spill in Washington County, Kansas, plus $40 million to prevent future accidents.
  • An engineering firm reported the pipeline bend where the rupture occurred had been "overstressed" since 2010, while a court complaint noted soil under the pipe was "improperly compacted."
  • The spill harmed or killed more than 2,700 animals, and Jeffrey Hall, the EPA's assistant administrator, stated the spill rendered the waterway "lifeless and useless," reflecting the "seriousness of the environmental harm."
  • South Bow also faces paying more than $3 million for restoration projects; while the company disputes the government's allegations, it told The Canadian Press that it "proactively" began cleaning up the area.
  • The Keystone system transports oil to Illinois, Oklahoma, and Texas, and in April, President Donald Trump approved a new pipeline project, a smaller version of the Keystone XL blocked by President Joe Biden in 2021.
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Lodinews.com broke the news on Saturday, July 11, 2026.
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