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Exxon spill case still unresolved

Posted: August 26, 2013 - 12:03am

During the chaos of the 1989 Exxon Valdez oil spill, one oil industry representative famously predicted that “lawyers yet to be born will work on this spill.” Today, as we approach the 25-year anniversary of the spill, the legal case remains unresolved. The Exxon Valdez case is now the longest-lasting environmental litigation in history. 

Some 32,000 private plaintiffs went to trial in 1994, proved Exxon guilty of gross negligence, and won $287 million in actual damages and a $5 billion punitive verdict. But after 14 years of appeals, in 2008 the U.S. Supreme Court (invoking a peculiar 1818 maritime ruling) reduced the punitive judgment to only $507 million, with the appeals court adding another $470 million in interest. The plaintiffs may have been better off taking their case to “Judge Judy.”

The state and federal government settled their case with Exxon in 1991 for $1.025 billion, to be used primarily for restoration. A “Reopener for Unknown Injury” provision in the 1991 settlement was supposed to allow the governments to collect another $100 million from Exxon in 2002-2006, to address environmental damage not anticipated at the time of settlement.

In 2006 the governments finalized a restoration plan to address long-term environmental damage, and presented Exxon with a “Demand for Payment” of $92 million to fund the work. One of the lawyers working for Exxon’s law firm at the time was Sean Parnell.

Although it had agreed to the Reopener provision in the 1991 settlement, Exxon has refused to pay the 2006 government demand. And the state and federal governments have done nothing to try to collect it. It’s hard to imagine the government affording average citizens such lenience. 

Today, government studies confirm that most of the populations and habitats injured by the spill have not fully recovered, and some are not recovering at all. Despite this, the government’s Reopener claim focuses solely on remediating intertidal oil. Government studies report thousands of gallons of Exxon Valdez oil still in beaches today, that this oil is still “nearly as toxic as it was the first few weeks after the spill,” that “the remaining oil will take decades and possibly centuries to disappear entirely,” and that tests on nearshore animals “indicate a continuing exposure to oil.” 

In their 2006 restoration plan, the governments committed to a specific timeline to remove this intertidal oil. Tests demonstrated that injecting nutrients and oxygen compounds into the subsurface oil will accelerate biodegradation. The full restoration effort was to begin in 2009, and much of the work was to have been completed by now. But today, they are at least 5 years behind schedule, citing “unforeseen contracting issues,” and “late studies.” Alaska’s Attorney General explained this month that: “Short field seasons and difficult working conditions in Alaska led to some of the unforeseen delays.”

And last month, the U.S. District Court wrote that: “The court is dismayed that so few of the projects that the Governments had expected to be completed by now have been completed.” But the court will not intervene in the ongoing dispute between the government and Exxon unless the government asks it to, something the state Attorney General will still not commit to. The statute of limitations on the claim may soon expire. 

Although Exxon has not paid the claim, the government spill account today has $195 million, much of which can be used to fund its beach remediation work, in expectation that this will be reimbursed if and when Exxon finally pays the claim. As the oil continues to injure the coastal ecosystem, there is no excuse for further delay.

In hindsight, either a lot of smart government lawyers really didn’t know the reopener would not reopen when they agreed to it in 1991, or they did, and this was their secret little gift to Exxon, with a wink and a nod and a pat on the back. 

Regardless, the take-home message from this quarter-of-a-century long spill debacle is that no one should expect environmentally responsible behavior by government or the oil industry in Alaska. 

• Rick Steiner was the University of Alaska’s marine advisor for Prince William Sound from 1983-1996, based in Cordova. He is now an environmental consultant through Oasis Earth, living in Anchorage.

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