Mobil Exxon Valdez Oil Spill and Aftermath

Expertise in earth sciences is vitally important to many modern businesses, especially those that operatein oil production or transportation, industrial manufacturing, or different industries that release waste or by products into the surrounding airor water.

The fact that very large punitive legal damages have been imposed by courts to large corporations such as Exxon, Union Carbide, and Pacific Gas and Electric serves notice upon organizations that their very survival may well depend upon how their employees respond to earth science related incidents

In an effort to implicate the importance of the earth science studies to modern corporate organizations, a study of the massive 1989 oil spill in Prince William Sound and how it affected Exxon would be of much use. The environmental damage was unprecedented, and initial public anger against the corporation was very high, however Exxon Mobil succeeded in weathering the storm and kept on continuing its operations, in large part because of the efforts of its own earth sciences people.

The problems all started on March 24, 1989 at 4 minutes after midnight, when the very big oil super tanker Exxon Valdez struck a reef hidden under the pristine surface of Alaska’s spectacular Prince William Sound and started spilling vast amounts of crude oil into the sea. In the Alaskan darkness that spring night an environmental nightmare started that changed not only Prince William Sound itself, but the entire world, especially the business world.

In the first weeks after the disaster, upon the advice of their own earth sciences people, who understood all very well how much environmental damage might ensue, Exxon volunteered to spend whateverall the money was needed on cleanup efforts and assessments of environmental damages after the accident and before the settlement. Over 2 billion dollars was quickly spent by Exxon on these efforts, and the company’s public relations people used every opportunity to publicize the money being spent, and to repeatedly stress that it was voluntary, so everyone would be aware of that fact and appreciate that Exxon was meeting its responsibilities to the public for the damage done to the environment.

Although all the efforts, nothing could stop the flood of lawsuits which resulted from the spill. After anightmarish thirty months of devastating negative publicity for Exxon, and extremely serious financial losses, a legal settlement agreement was finally reached on October 8, 1991 between the plaintiffs—the State of Alaska and the federal government—and Exxonattorneys on both criminal charges and civil damage claims stemming from the incident.

In settlement of civil charges, Exxonagreed to pay Alaska and the United States more then nine-hundred million dollars over a 10 year period. This money would be used for environmental and wildlife restoration and would be administered by six government trustees; three of them federal appointees, and the other three state appointees.

In settlement of criminal charges, it was agreed that Exxon would pay 250 million dollars. Two restitution funds of fifty million dollars each were found, one under state control and another one under federal authority. Although there was much opposition from many Alaskans, one-hundred and twenty-five million dollars of the balance was forgiven due to Exxon’s cooperation during the cleanup, and because of the upgraded and highly-publicized safety procedures Exxon earth sciences staff had designed to prevent a reoccurring similar event. The remaining 50 million dollars was divided between the Victims of Crime Act account and the North American Wetlands Conservation Fund.

But another large setback was in store for Exxon. On September 16, 1994, an angry jury in a U.S Federal courtroom returned a stunning five billion dollar punitive damages verdict against the corporation. Exxon attorneys have fought this judgment in appeal after lengthy appeal over the last seven years, and on November 7, 2001 won a major victory when United States Court of Appeals justices threw out the 1994 punitive damages verdict.

But Exxon has suffered mightily since the Exxon Valdez went aground in Prince William Sound that fateful night in 1989, and it is not an exaggeration to say that the very existence of the corporation has been at stake. Any business, no matter how large or small, is at the mercy of public approval, for it needs public approval to sell its product. And in Exxon’s case, public approval has been very much dependent upon what the corporation’s earth sciences people have been able to say and do to convince the public that the environmental damage done is nowhere close to being as damaging as other earth scientists have claimed.

In the 12 years since the oil spill, Exxon has relied heavily upon their own earth sciences personnel, and hired outside earth sciences consultants to defend themselves against charges that they are liable for billions of dollars in environmental damage to the ecosystem of Prince William Sound.

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