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Happy Anniversary, Exxon March 31, 2009

Posted by Jamie Friedland in Climate Change, Offshore Drilling.
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Imagine 11 million gallons of oil coating beaches from Massachusetts all the way down here to North Carolina.  As the Natural Resource Defense Council’s Kate Slusark points out, this is what the Exxon Valdez oil spill would have looked like had it occurred on the East Coast instead of Alaska’s Prince William Sound.  Last Tuesday marked the 20th anniversary of the country’s largest oil spill. Exxon Mobil, despite it close association with the poster child of environmental disasters, has not learned from its mistakes.

Oil pours into Prince William Sound

Oil pours into Prince William Sound

I cannot speak to whether Exxon still hires drunks to captain its supertankers, but the company has balked at a simple precaution to reduce the likelihood of another oil catastrophe.  In 1989, 100 percent of the oil supertanker fleet was single-hulled, including the Exxon Valdez.  Since then, the percentage has dropped to just 21% as that old design is phased out in favor of much safer double-hulled ships.

And that percentage will continue to decline.  Singe-hulled tankers will be banned from the United States in 2015, and a similar ban by the U.N. International Maritime Organization will go into effect next year.  France and Spain haven’t even allow single-hulled tankers within 200 miles of their shores since their own major spills in 1999 and 2002 respectively.  As a result, most Western oil companies have abandoned risky single-hulled tankers even ahead of the upcoming bans.  But Exxon has brazenly defied this logical trend.

The nation’s largest oil company remains the biggest Western user of single-hulled tankers.  And this is not just a function of its size: In 2008, Exxon hired more single-hulled tankers than the next nine largest companies combined.  Why?  The only apparent benefit is that the older, more accident-prone tankers cost about 20 percent less to rent.

Bloomberg estimates that choosing single-hulled tankers saved Exxon less than one cent per share in 2008.  Granted, that scales to a savings of about $18 million, but compared to the company’s record $45.2 billion in profit last year, that’s not even a drop in the barrel.   And if you consider the $3.8 billion cost for Valdez cleanup and damages to date, any cost-benefit analysis becomes even more absurd.

Such flagrant disregard for environmental safety reinforces the negative feelings many still harbor towards Exxon.  But they don’t seem to care.  The Exxon Valdez (repaired, renamed and sold) is banned from returning to the Prince William Sound.  But Exxon still operates the Valdez’s single-hulled sister ship, the SeaRiver Long Beach, and regularly sails it right through the scene of the crime.

All that the Valdez experience has taught Exxon is that the courts are their friends.  In repeated legal battles after the spill, Exxon was able to reduce its punitive fines by almost 90% and delay that restitution for literally decades.  After its Supreme Court victory in 2008, Exxon owed the equivalent of just four days’ profit in damages.  That’s not a deterrent, it’s barely a slap on the wrist.

In 1989, Exxon’s CEO predicted that the Prince William Sound would be completely restored in just a few years.  And earlier this month, the company claimed that the area has recovered with “no long-term damage.” This is patently untrue; oil can still found be on or under many of the sound’s beaches.

How can Exxon claim there is no long-term damage while oil still lies on miles and miles of beaches?

How can Exxon claim there is no long-term damage while oil still lies on miles and miles of beaches?

The Exxon Valdez Oil Spill Trustee Council recently found that 17 of the 27 monitored species have not recovered, especially the larger predators that suffer from the bioaccumulation of toxins.  For example, researchers say one of the two Orca pods in the sound is doomed with “no hope of recovery.”

And for those less sympathetic towards cetaceans, there are the missing schools of Pacific herring that used to support a profitable fishing industry.  Their absence impacts the families of local fishermen who used to rely on that fishery for half of their income.  The Exxon Valdez spill has undoubtedly caused long-term damage.

Obligatory.

Obligatory.

Although shipping spills have decreased with the post-Valdez regulatory improvements, its risks are intrinsic and will never be completely averted.  And offshore drilling poses similar threats with a whole host of new ones – especially during severe weather events.  Hurricanes Katrina and Rita alone caused 125 spills that dumped about 685,000 gallons of petroleum into our oceans.  Oil spills will inevitably continue as long to rely on this dirty, climate-altering fuel (as if we needed another reason to pursue alternative energy).

The transition from oil is a long-term goal, but it won’t become reality without short-term action.  And we can start down that road by removing the Bush II administration’s contributions: For example, in 2007, Bush opened the previously protected Bristol Bay to offshore drilling.  Such shortsighted policy must be overturned and prevented.  Even from a purely economic standpoint, this move jeopardizes $2.2 billion in annual fishing revenue for less than $8 billion in oil – over the next 20 to 40 years.  That’s just silly and a great place to start.

In the meantime, though, we need to hold companies like Exxon fully accountable for mistakes of such egregious magnitude.  We cannot afford to let them repeat their history, even if they refuse to learn from it.

A version of this post ran in The Chronicle at Duke University.

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Comments»

1. Why BP Deserves This « The Political Climate - May 3, 2010

[…] More on Exxon Valdez and a similarly twisted cost-benefit analysis for single- vs. double- hulled tankers here. […]

2. 2010 Oil Spill Answers (Pt. 2) « The Political Climate - May 4, 2010

[…] More about that situation and Exxon Valdez in general here. […]

3. All Aboard! Oil Reaches the Loop Current « The Political Climate - May 18, 2010

[…] 4 days’ profit.  Does that sound familiar to anyone?  It should – that’s all that Exxon ended up paying for the Valdez spill: 4 days’ profit. […]

4. A Crisis We Cannot Afford to Waste « The Political Climate - May 19, 2010

[…] Exxon Valdez oil spill is a case study of how these opportunities can be eviscerated by special interests or even lost […]

5. Send BP’s Spokespeople Home « The Political Climate - May 31, 2010

[…] It is worth mentioning again, however, that a similar, seemingly obvious economic argument should have compelled Exxon to use only double-hulled tankers after Exxon Valdez, but it has not. […]

6. The Dis-Honorable Judge Martin Feldman « The Political Climate - June 24, 2010

[…] THE SINGLE-HULLED TANKERS IN THE WORLD ARE JUST LIKE EXXON VALDEZ.  That’s why we’ve switched [embarrassingly slowly] to using double-hulled […]


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