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Case Two: Exxon Valdez – March 1989

The fate of the Exxon Valdez, carrying 1.26 million barrels of oil, also involved human error and bad weather. It ran aground on 24 March 1989 in the Gulf of Alaska. It was destined for the remote tanker terminal of Valdez in Alaska but had bourne off course into treacherous waters, surrounded by icebergs, with the third mate, who was not a certified pilot, at the helm. The 300-metre tanker hit the Bligh Reef, which was marked clearly on the charts, and spilt 11 million gallons of crude oil over 1,600km of Alaskan coastline.

The massive extent of the slick was later blamed on Exxon’s failure to contain the slick before heavy winds impacted the initial site of the spillage. In this way, it was similar to the Prestige incident in that a fast, expedient response could have helped to minimise the damage.

The following reveals how events unfolded in the Exxon Valdez disaster.

• 27 March – The slick covers a 30km² area, then 110km/h winds hit the scene. Containment booms were ripped apart and workers gave up hope of containing the slick. Fishermen moved the booms to an island 80km away to save salmon hatcheries.
• 28 March – The Valdez port was reopened for supertankers. The slick has grown into a 65km² area.
• 29 March – Criminal investigation begins into the accident. The slick extends to a 70km² area.

Implications of the Exxon Valdez Disaster

The cost of the largest oil spill in US history was estimated at US$3–15 billion in environmental damages since it eventually covered over 1,000 miles (1,600km) of the Alaska coastline, killing hundreds of thousands of fish and seabirds and thousands of otters. A criminal indictment was brought by the state of Alaska against the tanker’s captain, Joseph J Hazelwood, who had allegedly been drinking. He was acquitted in March 1990. In September 1994, a federal court jury ordered Exxon Corp. to pay US$5 billion in punitive damages to Alaskan fishermen, natives and property-owners. Exxon disputed the claim for several years. The case against Exxon rested on:

• the captain, Joseph Hazelwood, who had unacceptably high levels of alcohol in his blood nine hours after impact;
• inadequate attempts to clean up the slick – the deputy commissioner of the Alaska Department of Environmental Conservation, Dennis Kelso, said there had not been adequate containment even 24 hours into the spill; and
• Exxon Shipping Co., the owner of the Exxon Valdez, accepted full financial responsibility for the slick – estimated at 240,000 barrels.

Exxon’s Response

Exxon had little choice but to battle out the claims in the court. In 1994, a court ruled that Exxon should pay US$5 billion in damages to a group of local companies that were affected. However, a US$745 million claim was thrown out due to a secret deal that Exxon had struck with a group of seafood- processing companies in 1991. Exxon and its lawyers were heavily criticised by Judge H Russel Holland in Anchorage for manipulating the jury.

The Prestige’s Owners’ Response

The Prestige was chartered by Crown Resources, a Swiss-based commodities trading house. They changed their name quickly and announced that they had scaled back activities. Its parent company, the Alfa Group, bought Crown from its Russian owners and changed the name to Energy, Resources & Commodities (ERC) Trading Company. The Chief Executive, Steve Rudofski, left the company.

Crown Resources had already chartered another single hull vessel, the Byzantio, carrying 50,000 tonnes of heavy fuel oil from the Estonian port of Muuga. The French navy are stationing a navy patroller near Dunkirk to watch for the ship.

The Future of European Union Policy

Early signs show a tough new line on single hull tankers from the Spanish and Portuguese authorities. They expelled an ageing 17-year-old oil tanker, Moskoviskiy Festival, carrying 25,000 tonnes of fuel oil, from their waters in December 2002. They may now perform spot checks on single hull heavy fuel transporters older than 15 years. It is believed that the ship was chartered by Russian oil major LUKoil. The tanker loaded in Estonia’s Tallinn on 22 November and followed exactly the same route as the Prestige.

Spain, France, Italy and Portugal are likely to continue to take a hard line on single hull tankers, but the UK, Greece and Germany are less keen. One solution may be to phase out single hull tankers quicker and to legislate so that heavy crudes are carried by double hull vessels. Current European Union policy calls for single hull tankers to be phased out by 2015, with lesser measures implemented, for example tighter port inspections.

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