Exxon Valdez

The Exxon Valdez oil spill was the most devastating environmental disaster to occur
at sea in history. Its remote location (accessible only by helicopter and boat) made
government and industry response efforts difficult, and severely taxed existing plans
for response. The region is a habitat for salmon, sea otters, seals, and sea birds.

During the first few days of the spill, heavy sheens of oil, such as the sheen visible in
this photograph, covered large areas of the surface of Prince William Sound.

Early Stages of the Spill

• On March 23, 1989, the oil tanker Exxon Valdez departed from the Valdez oil
terminal in Valdez, Alaska (on its 28th voyage), heading south through Prince
William Sound, with a full load of oil.
• Captain Joseph Hazelwood radioed to the Coast Guard station that he would be
changing course in order to avoid some growlers, small icebergs which had
drifted into the sound from the Columbia Glacier.
• The captain received permission to move into the northbound lane.
• Before retiring to his cabin, Captain Hazelwood instructed his third mate
Gregory Cousins to "start coming back into the lanes" once the ship was abeam
Busby Island Light, some 2 minutes ahead.
• Although Cousins did give the instructions to the helmsman to steer the vessel to
the right, the vessel was not turning sharply enough.
• At 12:04 a.m. on March 24, the vessel hit Bligh Reef. It is not known whether
Cousins gave the orders too late or the helmsman did not follow instructions
properly.
• The spilled oil affected 1,900 km of Alaskan coastline, though there are
conflicting estimates of how much oil spilled. Exxon initially reported 10.8
million gallons (40,900 m³) (based on measurements in the ruptured tanker).
 • However, later measurements of the amount of seawater in the fluid pumped
from the tanks indicate that this figure is certainly too small. A conservative
estimate is that 30 million gallons (110,000 m³) of oil spilled. [1])

Cleanup Measures
• A trial burn was conducted during the early stages of the spill, in a region of the
spill isolated from the rest by a fire-resistant boom.
• The test was relatively successful, but because of unfavorable weather no
additional burning was attempted in this cleanup effort.
• Mechanical cleanup was started shortly afterward using booms and skimmers,
but the skimmers were not readily available during the first 24 hours following
the spill and thick oil and kelp tended to clog the equipment.
• Transferring oil from temporary storage vessels into more permanent containers
was also difficult because of the oil's weight and thickness.
• In addition, a trial application of dispersants was performed. Less than 4,000 US
gallons (15,000 L) of dispersant were available in Valdez, Alaska, and no
application equipment or aircraft. A private company applied dispersants on
March 24 with a helicopter and dispersant bucket.
• Because there was not enough wave action to mix the dispersant with the oil in
the water, their use was discontinued. Beginning 3 days after the vessel
grounded, a storm pushed large quantities of fresh oil onto the rocky shores of
many of the beaches in the Knight Island chain. In this photograph, pooled oil is
shown stranded in the rocks.

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Legal Implications
 • An award of $287 million for actual damage and $5 billion for punitive
damages was awarded by an Anchorage jury in 1994.
• The punitive damages amount was based on a single year's profit by Exxon at
that time.
• Exxon appealed the ruling and the 9th U.S. Circuit Court of Appeals.
• On December 6, 2002 the judge announced that he had reduced the damages to
$4 billion, which he concluded was justified by the facts of the case and not
grossly excessive.
• Exxon appealed again, sending the case back to court to be considered in regard
to a recent supreme court ruling in a similar case, resulting in Judge Holland
actually upping the punitive damages to $4.5 billion, plus interest.
• Exxon is again appealing, some seventeen years after the incident. The case
currently sits in the 9th Circuit Appellate Court, and oral arguments were heard
on January 27, 2006; a ruling is expected by September of 2006. [2]

Exxon's company position is that

• Punitive damages greater than $25 million are not justified because the spill was
an accident and because Exxon spent some 2 billion dollars cleaning up the spill,
and a further 1 billion to settle civil and criminal charges related to the case.
• However in court it was argued that allowing a "known drunk" to captain the
ship was reprehensible.

Some factors to consider when weighing the justice of a large punitive damages
penalty are

• Although Exxon acted admirably in paying for cleanup efforts, they also
subsequently recovered a significant portion of their cleanup and legal expenses
through insurance claims, tax writeoffs, and by an increase in the price of their
products.
• The original $5 billion amount was based on annual profits in 1989; In 2005
Exxon posted a $36 billion annual profit, the largest of any company, ever.
• Exxon immediately set aside the unpaid $5 billion, and has been collecting
interest on that amount since 1994. By now, the amount of interest earned on
that amount may be larger than the original punitive damages were in the first
place.
• Exxon made an agreement with the Seattle Seven, which will result in them
recovering around $750 million of any punitive damages they eventually have to
pay.

The Exxon Valdez damages assessment is notably important in the environmental

resource in question, an assessment which was done through the use of contingent
valuation techniques.
The Ship
• In the aftermath of the Exxon Valdez incident U.S. Congress passed the Oil
Pollution Act of 1990, including a clause banning the Exxon Valdez from
Alaskan waters.
• In addition, requirements were made that all oil-carrying vessels have a double-
hull design, providing an additional layer between the oil tanks and the ocean.
• The Exxon Valdez supertanker was towed to San Diego, arriving on July 10 and
repairs began in July 30, 1989.
• Around 1,600 tons of steel was removed and replaced.
• In June 1990 the tanker, renamed SeaRiver Mediterranean left harbor after $30
million of repairs.
• The ship was banned from Valdez by a new regulation that prohibited vessels
that had caused oil spills of more than 1 million US gallons (3,800 m³).
• In April 1998 the company argued in a legal action against government that the
ship should be allowed back to Valdez, since the regulation was unfairly
directed at Exxon alone (no other ships meet this criterion). Since the SeaRiver
Mediterranean is not a double-hulled vessel, it was not allowed back in Alaska,
and is currently mothballed off the coast of Africa.

Environmental Impact
• Both the long and short-term effects of the oil spill have been studied
comprehensively.
• Thousands of animals died immediately; the best estimates include 250,000 sea
birds, 2,800 sea otters, 300 harbor seals, 250 bald eagles, up to 22 orcas, and
billions of salmon and herring eggs.
• Despite a thorough cleanup, and little visual evidence apparent even only one
year later, the effects of the spill continue to be felt today.
• In the long term, reductions in population have been seen in various ocean
animals, including stunted growth in pink salmon populations. Sea otters and
ducks also showed higher death rates in following years, partly because they
ingested contaminated creatures. The animals also were exposed to oil when
they dug up their prey in dirty soil.
• Researchers said some shoreline habitats, such as contaminated mussel beds,
could take up to 30 years to recover. While it will take years for a solid long
term study, some interim effects have already been noted
• Rockweed - The Rockweed is once again growing on boulders where the spill
occurred.
• Salmon - Pink Salmon Harvests have varied in the years since the spill.
Workers using high-pressure, hot-water washing to clean an oiled shoreline.
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Social Impact
• In addition to the environmental effects of the spill, the disruption to the lives of
the people affected is noteworthy.
• Native American groups in the area were impacted, and the fishing industry also
experienced serious changes as a result.
• Commercial fishing was closed for the remainder of 1989, so many fishermen
went elsewhere to work.
• Unfortunately for the local industry, many seafood markets also turned
elsewhere to purchase products, and some never returned.
• In the years following the spill, a very high percentage of the fishermen and
associated companies declared bankruptcy. The promise of a punitive damages
award from Exxon was not realized in the difficult years that followed the spill,
and caused much frustration.
• Bob Van Brocklin, the mayor of Cordova, a nearby fishing community,
committed suicide, and requested that his ashes be scattered on Bligh Reef,
where the Exxon Valdez grounded.