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Definition: Valdez from Dictionary of Energy

Environment. (Exxon Valdez) a huge oil tanker that ran aground on Alaska’s Bligh Reef in 1989 and spilled an estimated 10.8 million gallons of crude oil, fouling the waters of Prince William Sound and eventually affecting more than 1000 miles of beach in south-central Alaska. This spill caused widespread environmental damage, which according to a recent study continues to this day. The cleanup effort cost Exxon $2.5 billion.

Summary Article: Exxon Valdez Oil Spill
From Encyclopedia of White-Collar & Corporate Crime

Prior to the 2010 oil spill off the Gulf of Mexico, the worst incident in American history related to petroleum loss was the crash of the Exxon Valdez off the coast of Alaska shortly after midnight on March 24, 1989. The Valdez ran aground on the Bligh Reef in the Valdez Narrows and proceeded to lose over 11 million gallons of crude oil into Prince William Sound. The ship had been scheduled to make a five-day run from Valdez to Long Beach, California, and had over 1.2 million barrels of North Slope crude aboard at the time of the accident.

The primary causes of the incident involved the crew. First, the crew was overworked and unrested. More important, Captain Joe Hazelwood had been drinking vodka in the time preceding the ship running aground. He was borderline intoxicated, based on his slurred speech and inability to properly identify which vessel he was captaining at the time. His blood alcohol content, had it been taken soon after the accident, would have suggested a strong explanation for the poor decisions he made that night. Using a process called retrograde extrapolation on the blood test taken 11 hours after the accident, a blood-alcohol expert would testify that Hazelwood's blood alcohol concentration at the time of grounding could have been as high as 0.37. A jury would later fail to accept that speculative evidence.

The Accident

Hazelwood had been worried about the possibility of icebergs in Prince William Sound and opted to undertake a series of unusual maneuvers. When encountering ice, most ships opt to go slowly or even stop and wait for the ice to pass. Hazelwood, however, turned the ship around, ordered its speed increased, and had it placed on autopilot. The area he aimed to take the ship was narrow, and the captain's decisions would exacerbate that situation. Hazelwood left only one officer in charge of the dangerous maneuvering, and shortly after he left the bridge, the Exxon Valdez ran aground. An investigative report in 2008 made a similar finding. The report claims that Hazelwood was drinking and below decks when the third mate ran aground, in addition to not having the radar turned on—which it could not have, since it had been broken for over a year. Ultimately, the 2008 report blames Exxon for determining that repairing the radar was prohibitively expensive.

The floundering ship immediately began spilling high volumes of oil into the water. The captain spent nearly 30 minutes trying to push the boat forward but was eventually forced to await help from the U.S. Coast Guard. Although the immediate cause of the grounding was clearly the inability of the officer to successfully maneuver the tanker through the strait, numerous other variables were in play. First, Hazelwood's decision making was clearly blurred. Second, the crew was overworked and exhausted. Third, Exxon had not replaced radar equipment in the tanker. Fourth, Exxon did not have any recovery plans in place if such an accident occurred.

The Aftermath

Although the initial incident was troublesome enough, the bigger concern was the environmental effects of the oil spill. Given Prince William Sound's location (which can be reached only by plane, helicopter, or boat), it was nearly impossible for either the U.S. government or Exxon to respond efficiently and effectively to the incident. The oil spill occurred during a time period in which most of the native wildlife (mainly salmon, otters, seals, and birds) were in the middle of reproductive cycles, those jeopardizing both current and future populations. Over 200,000 birds and thousands of otters were lost as a result of the oil spill.

Beyond the wildlife victims, local economies struggled mightily in the aftermath. Commercial fishing had been a staple of the economy, and it was all but eliminated by the accident. Exxon desired to assist with recovery, but everything moved very slowly. The area is still not fully recovered. Most shellfish cannot be safely consumed by humans, and many animals have not returned to their previous numbers. Other animals—such as seals, ducks, and killer whales—have rarely been seen in the region since the Exxon Valdez crashed. Most concerning, large volumes of oil still exist in the geology of the area.

Exxon suffered in the aftermath of the wreck, as its reputation continued to nosedive. The company was required to pay billions of dollars in criminal and civil fees. The surrounding ecosystem received the largest sum of money, nearly $900 million, from a civil suit filed under the U.S. Clean Water Act and the U.S. Comprehensive Environmental Response, Compensation, and Liability Act. The company paid a $100 million fine for a criminal conviction and was ordered to pay an additional $5 billion in punitive damages to help natives harmed by the spill. An Anchorage jury ultimately awarded just under $300 million for actual damages and $5 billion in punitive damages. To come up with the $5 billion, the jury used a one-year profit yardstick for Exxon. In order to protect its business in the event the jury's awards were upheld, Exxon utilized a line of credit from J. P. Morgan for $4.8 billion. Ultimately, the U.S. Supreme Court found the amount excessive and rolled back the punitive damages to $507.5 million (equal to compensatory damages in the case).

As for Hazelwood, he was ultimately convicted of negligent discharge of oil, a misdemeanor. Jurors also decided that Hazelwood's decision to leave the bridge in the hands of others was questionable enough for a finding of negligence, but not recklessness. He was acquitted of operating a watercraft under the influence of alcohol and reckless endangerment. He ended up serving many thousands of hours of community service.

See Also: Clean Water Act; Corporate Criminal Liability; Environmental Protection Agency, U.S.; Gulf of Mexico Oil Spill; Negligence; Pollution, Water

William J. Miller
Flagler College
© 2013 SAGE Publications, Inc

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