Exxon Valdez Oil Spill and Aftermath

A thorough understanding in earth sciences is very important to a lot of modern businesses, especially those that operatein petroleum 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 enforced by courts to large corporations such as Mobil Exxon, Union Carbide, and Pacific Gas and Electric brings notice upon organizations that their very survival can well be related upon how their staff respond to earth science related incidents

In an effort to emphasize the much importance of the earth science studies to modern corporate organizations, an examination of the massive 1989 oil spill incident in Prince William Sound and how it affected Mobil Exxon would be of much use. The environmental damage was incredibly much, and initial public anger against Exxon was very high, however Exxon succeeded in weathering the storm and continue to do business, in large part because of the efforts of its own earth sciences people.

The problems all started on March 24, 1989 at four 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 massive 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 provided by their own earth sciences people, who understood all too well how much environmental damage might ensue, Mobil Exxon volunteered to spend whateverall the money was needed on cleanup activities and assessments of environmental damages after the accident and before the settlement. Over two billion dollars was quickly spent by Mobil Exxon on these efforts, and the company’s public relations people used every opportunity to publicize the amount being spent, and to repeatedly stress that it was voluntary, so everyone would be aware of that fact and appreciate that Mobil 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 anightmare 30 months of devastating negative publicity for Mobil 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 Mobil Exxonattorneys on both criminal charges and civil damage claims stemming from the incident.

In settlement of civil charges, Mobil Exxonagreed to pay the State of Alaska and the US government more then nine-hundred million dollars over a ten year period. This money would be spent 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 Mobil Exxon would pay a fine of two-hundred and fifty million dollars. Two restitution funds of fifty million dollars each were established, one under state control and one under federal authority. Against strong opposition from many Alaskans, 100 and twenty-five million dollars of the balance was forgiven due to Mobil Exxon’s cooperation during the cleanup, and because of the upgraded and highly-publicized safety procedures Mobil Exxon earth sciences personnel had designed to prevent a reoccurrence. The remaining 50 million dollars was divided between the Victims of Crime Act account and the North American Wetlands Conservation Fund.

But another big setback was in store for Exxon. On September 16, 1994, an angry jury in a United States Federal courtroom returned a stunning five billion dollar punitive damages verdict against the corporation. Mobil Exxon attorneys have fought this judgment in appeal after lengthy appeal over the last 7 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 Mobil 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 products or services. And in Mobil 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 near as bad as other earth scientists have claimed.

In the twelve years since the oil spill, Mobil Exxon has relied heavily upon their own earth sciences department’s employees, 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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