Keystone Operator to Pay $26.8M Over 2022 Oil Spill Violations
EPA and Kansas settle with TC Energy for $26.8M over 2022 Keystone spill violations.
Why it matters: The settlement emphasizes the legal and financial consequences of environmental compliance failures in major infrastructure projects. It signals stricter enforcement trends that corporate legal teams must monitor to manage regulatory and reputational risks.
- December 2022 Keystone Pipeline rupture spilled about 13,000 barrels (588,000 gallons) of crude oil in Kansas.
- TC Energy agreed to $26.8 million in civil penalties under a consent decree with EPA and Kansas.
- Operator committed $40 million for preventive work to avoid future discharges.
- An additional $3 million will fund Kansas restoration projects to preserve natural resources.
On December 7, 2022, a rupture in the Keystone Pipeline operated by TC Energy released roughly 13,000 barrels of crude oil into Mill Creek, Washington County, Kansas. This incident was the largest onshore oil spill in the U.S. since 2013 and represents the worst spill in Keystone's history, caused by a faulty weld and bending stress at a pipe-to-fitting girth weld.
Cleanup costs for the spill reached an estimated $480 million. Following extensive investigations and remediation efforts, the Environmental Protection Agency (EPA) and the state of Kansas filed a proposed consent decree on July 10, 2026, addressing violations of the Clean Water Act related to the spill.
Under the agreement, TC Energy accepted $26.8 million in civil penalties. Beyond fines, the company agreed to invest approximately $40 million in preventive measures designed to avoid future discharge incidents, reflecting a commitment to enhanced pipeline safety and environmental protection. In addition, TC Energy pledged $3 million to support state restoration projects that aim to preserve natural resources impacted by the spill.
TC Energy stated it safely restored the Keystone Pipeline service after completing repairs, inspections, and testing. Environmental groups, like the Sierra Club's Kansas Chapter, highlighted the severe impact such spills can have on ecosystems and communities.
This settlement illustrates how enforcement agencies continue to hold infrastructure operators financially and legally accountable for environmental damages, a trend legal and compliance professionals should observe closely given the increasing regulatory scrutiny in the energy sector.
By the numbers:
- 13,000 barrels spilled — volume of crude released in 2022 Keystone Pipeline rupture
- $26.8 million penalty — civil fines agreed under consent decree
- $480 million — estimated cleanup costs for the oil spill