OIL SLICK: The Exxon Valdez oil spill in 1989, which dumped 11 million gallons of crude into Prince William Sound, is worth only as much as $507.5 million in damages, according to U.S. Supreme Court. Image: ©Niall Benvie/CORBIS
Oil giant ExxonMobil will pay the equivalent of 24 hours worth of petroleum sales to the people impacted by the 11 million gallons (41.5 million liters) of crude oil spilled into Prince William Sound in Alaska in 1989 when the drunken skipper of the Exxon Valdez allowed the tanker to run aground, according to a U.S. Supreme Court decision. The ruling caps the total damages assessed to the company at $507.5 million, a fraction of the $5 billion a jury initially awarded in 1994.
"This means that corporations like Exxon can simply put a price tag on the destruction of our marine life, our oceans and, ultimately families," says Jim Ayers, Juneau-based vice president at marine environmental group Oceana and the first executive director of the trust set up to manage the recovery and restoration of the sound. "They can estimate the value of that loss, put it into the expense column and roll forward with blatant disregard."
Although the recovery is nearly complete, aftereffects of the massive spill can still be found in the area, according to supervisory research chemist Jeffrey Short at the National Oceanic and Atmospheric Administration's Alaska Fisheries Science Center. "We've been tracking the long-term effects of the spill because it's such a clear example. [We] don't have a lot of other pollution sources to confound the picture," he says. "The animals that have had the most difficulty bouncing all the way back are sea otters, sea ducks and possibly some intertidal fish."
Sea otters that have been contaminated by oil can still be found in the sound and two killer whale pods have been devastated, among other environmental impacts. "One is in big trouble and the other is almost certain to go extinct," Short says. "Bottom line is they're not reproducing," even though almost all of the oil is gone.
And local communities have still not recovered, according to Ayers. "It wasn't like it happened and then it was over," he says. "It happened every single day of their lives for 15 years."
Some 32,677 landowners, native Alaskans, commercial fishermen, seafood processors and small business owners—as well as lawyers—will now divide as much as $507.5 million in damages. The U.S. District Court of Anchorage will decide how much of that total possible fine will appropriately punish ExxonMobil.
The company has already paid roughly $3.4 billion in other expenses, according to a statement by ExxonMobil chairman and CEO Rex Tillerson, including at least $900 million for the cleanup of the sound. "The Valdez oil spill was a tragic accident and one which the corporation deeply regrets," he said.
The majority in the 5–4 court ruling decided that punitive damages should be capped at the level of actual damages proved—in effect, a new legal standard, at least for maritime cases such as oil spills from tankers. "The justices stepped forward and did what Congress refused to do, which is set limits on the punitive damages," Ayers says, who also notes that the ruling eliminates an important deterrent for bad behavior.
This could prove particularly relevant in the Arctic, which, thanks to climate change, is more open to future oil exploration and shipping. "This means that Exxon and other oil companies can now roll into the Arctic, the last great pristine environment, and do whatever it takes to collect and transport oil," Ayers says. "They can now buy and destroy America's resources for a mere pittance. All they need to do is throw a few bucks at the family that it devastates."