Environmental Policy Term Paper

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Exxon and Environmental Policy

Despite its assurance of the complete safety of its operations, the Exxon Valdez tanker hit a reef in Alaska's Prince William Sound at midnight of March 24, 1989 and poured 11 million gallons of Alaska North Slope crude oil from a ruptured hull of the ship (Explore North 1999). Within the next two months following the wreck, oil had spread to 470 miles to the southwest. The initial cleanup in the succeeding three years cost more than $2 billion, although no lives were lost. Wildlife destruction was staggering and the full impact of the disaster may never be known. The State of Alaska and the federal government filed both criminal and civil suits against Exxon in October 1991

In settling the civil charges, Exxon agreed to pay the State of Alaska and the United States $900 million within a 10-year period and the money would be devoted to restoration work to be administered by six government Trustees, three federal and three state (Explore North 1999). In settling the criminal charges, Exxon would be fined $250 million: $50 million restitution funds each to fall under state control and the other under federal authority. It, however, shocked many Alaskans when $125 million of the fine balance was forgiven on account of Exxon's cooperation in the cleanup and upgrading of safety procedures as preventive measure. The remaining $50 million was assigned by the courts to the Victims of Crime Act and the North American Wetlands Conservation Fund at $13 million and $12 million, respectively (Explore North). On September 16, 1994, a jury in the federal court returned a $ billion punitive damages suit against Exxon, which appealed several times (Explore North). The delay went in favor of Exxon, which earns $90,000 per hour or almost $2 million a day or close to $800 a year. With the delay at the appeals court, it could pay the $5 billion from the interests earned alone.

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In November 2001, a panel of the 9th Circuit Courl finally overturned the $5 billion decision.

The captain of the Exxon, Joseph Hazelwood, admitting having had at least three drinks before boarding the ship before the incident, but he was acquitted in 1990 of the charge of operating the ship while drunk (Explore North 1999) and convicted only of a misdemeanor of illegally discharging oil. The sentence was upheld by the Alaska Court on July 8, 1998. Exxon Valdez, now named SeaRiver Mediterranean, continues to carry oil around the world today. The courts barred it from Alaskan waters again and Exxon went on appeal, but its appeal was turned down (Explore North). It attempted to merge with Mobil into becoming the world's largest corporation, but Senator Slade Gorton opposed the initiative on March 4, 1999 on the ground of Excon's non-payment of the assessed penalties (Explore North).

Directly or indirectly, tighter environmental regulations have been in force on many industries as a result of the Exxon Valdez havoc, the most important of which is the imposition of a modern standard for tanker ships. The new model has double hulls, which will prevent leaks if the outer layer were torn off or punctured. Using Exxon fines, large tracts of land were also added to Kenai Fjords National Park (Explore North 1999).

In response to the disaster, U.S. Congress passed the Oil Pollution Act of 1990, which put more stringent requirements into place in preventing spills, for implementation by the U.S. Coast Guard (Earle 1996). Transporters of oil and production facilities had to develop and implement response plans, participate in preparedness drills and observe safe shipping and handling….....

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