Keystone Pipeline operator South Bow has agreed to a proposal to pay a $26.9 million penalty stemming from a December 2022 oil spill in Kansas.

According to a July 10 release from the U.S. Environmental Protection Agency, South Bow would pay the penalty to settle a case brought by the EPA and the state of Kansas. As part of the proposed settlement, the pipeline operator would also agree to pay another $40 million to guard against future oil spills, as well as $3 million to Kansas for environmental restoration projects.

In the 2022 incident, a rupture in the Keystone Pipeline spilled 13,000 barrels of heavy crude oil into Washington County's Mill Creek in Kansas. It was the largest onshore oil pipeline spill in the U.S. in nearly a decade, covering the creek bank-to-bank with an inch of crude oil for three-and-a-half miles downstream. The spill killed or impacted 2,700 animals, with oil residue found in the 35 acres surrounding the rupture in the pipeline. 

“The oil spill blanketed land and water, rendering the waterway lifeless and useless, and requiring extensive cleanup and remediation,” said EPA Assistant Administrator Jeffrey Hall.

South Bow removed the oil from the creek and surrounding areas following a 2023 cleanup order from the EPA.

Moving forward, a U.S. District Court judge will still have to approve the proposed settlement after a 30-day public comment period.