Ten Years After Valdez, And Still Making a Killing
March 24 brought us the tenth anniversary of the most notorious foul-up in the history of the oil business: the Exxon Valdez spill which took place in Prince William Sound, 25 miles south of Valdez, Alaska around midnight when the vast 948 foot long tanker ran into Bligh reef. Over the next few days at least 11.2 million gallons of Alaskan crude oil poured into the Sound.
The spill fouled more than 1,500 miles of shore line. It killed more than 250,000 beaver; 26 orca whales; 2,000 sea otters; 300 harbor seals; 250 bald eagles. It turned the Sound's mussel beds into toxic graveyards and decimated herring and pink salmon stocks. Ten years later, of the 30 different species, only one has recovered, the bald eagle.
Exxon has boasted of spending $1.5 billion cleaning up the spill, but 20 per cent -- 2.5 million gallons -- of crude oil remains in the Sound, either coating the mussel beds or in tarry deposits on the shore. Exxon's cleaning crews only mopped up 15 per cent of the spilled crude. The remainder either evaporated or broke down.
America's largest oil company soon faced suits from the federal government and from native tribal and fishing communities. In 1994 a federal district court jury ordered Exxon to pay $5 billion in punitive damages to 30,000 natives, fisherman and businesses suffering economic hardship because of the spill. To date, Exxon hasn't turned over a penny in satisfaction of that judgment. In fact the company is earning $400 million a year in interest on the money reserved in case it's ultimately compelled to pay up. Lee Raymond, Exxon's CEO, has said that the jury award was an "excessive and unwarranted judgment". Exxon has instigated appeals and other legal maneuvers to squash it. Among other tactics Exxon has claimed that a court bailiff tried to influence a juror by showing him a bullet and his gun while saying that a juror who was holding out for Exxon should be "put out of her misery." The bailiff, Donald Warwick, died in 1995. Two years ago, the federal judge, H. Russel Holland, found the allegations groundless.
Meanwhile the fishing industry in the Sound remains moribund and long-term prospects for the salmon fisherman are bleak, since the pink salmon have developed what biologists call functional sterility and such fry as do get spawned are severely deformed. The National Oceanic and Atmospheric Administration reckons that the salmon and herring catch in the chief fishing port of Cordova has been roughly cut in half, an annual $90 million loss.
The spill also had dire, long-term effects on human communities in the area. A long-term research project on the town of Cordova by Dr Steve Picou of the University of South Alabama, finds people still reeling from chronic stress. Picou's research suggests that widespread depression, broken families and increased use of drink and drugs parallel similar breakdowns in such communities as those around Three Mile Island and Love Canal.
Reacting to the smouldering fury of the spill's victims, Senator Ted Stevens of Alaska put through a law, known as the 1990 Oil Pollution Act, which forever barred a rehabbed Exxon Valdez from plying Alaskan waters. Unabashed, Exxon renamed the tanker the Sea River Mediterranean and tried to sail it back to Valdez. When the tanker was stopped, Exxon challenged the constitutionality of the 1990 Act. This bid failed and so the company filed a "takings" claim, demanding $125 million from the federal government, on the ground its tanker had been unfairly "demonized".
The tanker's skipper at the time of the spill, Joseph Hazelwood, waited many years for the courts to decree punishment. This coming summer he will begin 1,000 hours of community service in south-east Alaska, picking up trash along highways outside Anchorage. The court has ordered him to spend a month a year in Alaska for the next five years.
Despite much public opprobrium at the time and spontaneous consumer boycotts, Exxon is doing just fine. North slope oil production has soared. The consortium operating on the North Slope -- Exxon, Arco and British Petroleum -- are earning after-tax profits estimated by Fortune magazine at over $3 billion a year. Even after production begins to decline in a couple years, the state of Alaska predicts the three companies will be earning profits of more than $2 billion a year.
Did the spill produce federal regulation to guard against such contamination in the future? The answer is an emphatic No. The companies are even resisting having their tankers escorted by tug boats through the Sound.
The Clinton administration has acquiesced in the oil companies' next proposed onslaught on the Alaska's Arctic plain. There's been a fair measure of publicity about the threat to the Arctic Wildlife Refuge, just east of the Prudhoe Bay oil field Such fears are well justified since Arco, B-P and Exxon are all test drilling next to the Refuge. Much less is being said about Interior Secretary Bruce Babbitt's decision to open the National Petroleum Reserve to the oil companies. At 24 million acres, the Reserve is the largest undeveloped swath of land in North America, home to wolves, caribou and some of the most productive raptor habitat in the world.
The Clinton administration has been lissome in its posture towards Big Oil. By contrast, Washington senator Slade Gordon, a Republican, has told the administration that it should hold up the impending merger of Exxon and Mobil until the former pays the $5 billion fine. CP
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