The Exxon Valdez Oil Spill

The Exxon Valdez Oil Spill was one of the largest manmade environmental disasters ever to occur at sea, seriously affecting plants and wildlife. 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.

On March 24, 1989, the oil tanker Exxon Valdez departed on its 24th voyage from the Valdez oil terminal in Valdez, Alaska, heading south through Prince William Sound, with a full load of 52 million gallons of oil. Captain Joseph Hazelwood radioed to the Coast Guard station that he would be changing course in order to avoid some growlers, or 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 two minutes ahead.

Although Cousins did give the instructions to the helmsman to steer the vessel to starboard, the vessel was not turning sharply enough and at 12:03 a.m. on March 24, it struck Bligh Reef. According to the National Transportation Safety Board report, “he probable cause of the spill was: the failure of the third mate to properly maneuver the vessel because of fatigue and excessive workload. Other contributing factors were one, the failure of the master to provide a proper navigational watch because of impairment from alcohol, two, the failure of the Exxon Shipping Company to provide sufficient crew for the Exxon Valdez, and three, the lack of an effective Vessel Traffic Service because of inadequate equipment and manning levels.”

The spilled oil affected 1,900 km of Alaskan coastline. Some effects are still felt today.

According to official reports, the ship carried 53,094,510 gallons of oil, of which 10.8 million gallons were spilled. This figure has been accepted by the State of Alaska’s Exxon Valdez Oil Spill Trustee Council, and environmental groups such as Green Peace and Sierra Club. However, some groups such as Defenders of Wildlife believe that the spill was much larger than reported and that about 30 million gallons spilled into the ocean, pointing out that oil reclaimed from the damaged tanker (which was the basis for Exxon’s calculations) was later discovered to have a large amount of seawater in it.

$287 million for actual damages 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 ordered the original judge Russel Holland to reduce the amount. 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, which caused Judge Holland to actually increase the punitive damages to $4.5 billion, plus interest.

After more appeals, and oral arguments heard by the 9th Circuit Appellate Court on January 27, 2006, the damages award was cut to $2.5 billion on December 22, 2006. The court cited recent U.S. Supreme Court rulings relative to limits on punitive damages.

Exxon’s official position states that punitive damages greater than $25 million are not justified because the spill resulted from an accident and because Exxon spent an estimated $2 billion 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 that may be considered in the current ongoing legal battles are:

Exxon subsequently recovered a significant portion of cleanup and legal expenses through insurance claims, tax writeoffs, and by an increase in the price of their products. ExxonMobil’s position remains that since they voluntarily paid out a large amount of money up-front, additional punitive measures are not justified.

Exxon immediately set aside the amount of $5.4 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. (“rule of 72”). If they claimed a capital loss for taxation purposes Exxon paid much less taxes, still collecting an interest from 5.4 billion deposit, therefore real looser is the American people because less revenue means less money for education, health or Iraq war.

Exxon made an agreement with the Seattle Seven, which will result in their recovering around $750 million of any punitive damages they eventually have to pay.

Exxon corporation’s reported disaster response did not effectively remove much of the lost oil that washed onto the shores of coastal Alaska, yet some argue that human efforts to clean the oil spill damage were actually counterproductive.

The Exxon Valdez damages assessment is notably important in the environmental resource in question, an assessment reached with the use of contingent valuation techniques.

In the aftermath of the Exxon Valdez incident the U.S. Congress passed the Oil Pollution Act of 1990, including a clause prohibiting 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). In addition, requirements were made for a gradual phase in of a double-hull design, providing an additional layer between the oil tanks and the ocean.

Rule is but there is no double hull tankers. Big boys in oil business are not going to built them because they carry much less oil than single hullers, besides still have old ones. I used to carry oil from Persian Gulf to USA in 1998 on 2 millions barrels single hull tanker and never heard that such are positively banned from entering US waters.

At an Athens party for the movers and shakers in world shipping the drinks flow freely. Life is still good…..

One more thing; drinks flow freely not only in Athens, they, I’m sure of that flow in the Exxon headquarters, as well.

By: Globtrotter

The Exxon Valdez supertanker was towed to San Diego, arriving on July 10 and repairs began in July 30, 1989. Approximately 1,600 tons of steel were removed and replaced. In June 1990 the tanker, renamed “SeaRiver Mediterranean”, left harbor after $30 million of repairs.

Wildlife was severely impacted by the oil spill

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 – 500,000 sea birds, 2,800 – 5,000 sea otters, approximately 12 river otters, 300 harbor seals, 250 bald eagles, up to 22 orcas, and billions of salmon and herring eggs. Due to a thorough cleanup, little visual evidence of the event remained in areas frequented by humans just one year later, but 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.

We humans are lucky that Mother Nature in her wisdom knows the best how to correct stupidity of our race and damaging effect we are constantly bringing to our World.

Colas Bregnon – Nuda Veritas