Court Rewards Exxon for Valdez Spill

by Greg Palast

 

[Thursday, June 26, 2008] Twenty years after Exxon Valdez slimed over one thousand miles of Alaskan beaches, the company has yet to pay the $5 billion in punitive damages awarded by the jury. And now they won't have to. The Supreme Court today cut Exxon's liability by 90% to half a billion. It's so cheap, it's like a permit to spill.

 

Exxon knew this would happen. Right after the spill, I was brought to Alaska by the Natives whose Prince William Sound islands, livelihoods, and their food source was contaminated by Exxon crude. My assignment: to investigate oil company frauds that led to to the disaster. There were plenty.

 

But before we brought charges, the Natives hoped to settle with the oil company, to receive just enough compensation to buy some boats and rebuild their island villages to withstand what would be a decade of trying to survive in a polluted ecological death zone.

 

In San Diego, I met with Exxon's US production chief, Otto Harrison, who said, "Admit it; the oil spill's the best thing to happen" to the Natives.

 

His company offered the Natives pennies on the dollar. The oil men added a cruel threat: take it or leave it and wait twenty years to get even the pennies. Exxon is immortal - but Natives die.

 

And they did. A third of the Native fishermen and seal hunters I worked with are dead. Now their families will collect one tenth of their award, two decades too late.

 

In today's ruling, Supreme Court Justice David Souter wrote that Exxon's recklessness was ''profitless'' - so the company shouldn't have to pay punitive damages. Profitless, Mr. Souter? Exxon and it's oil shipping partners saved billions - BILLIONS - by operating for sixteen years without the oil spill safety equipment they promised, in writing, under oath and by contract.

 

The official story is, "Drunken Skipper Hits Reef." But don't believe it, Mr. Souter. Alaska's Native lands and coastline were destroyed by a systematic fraud motivated by profit-crazed penny-pinching. Here's the unreported story, the one you won't get tonight on the Petroleum Broadcast System:

 

It begins in 1969 when big shots from Humble Oil and ARCO (now known as Exxon and British Petroleum) met with the Chugach Natives, owners of the most valuable parcel of land on the planet: Valdez Port, the only conceivable terminus for a pipeline that would handle a trillion dollars in crude oil.

 

These Alaskan natives ultimately agreed to sell the Exxon consortium this astronomically valuable patch of land -- for a single dollar. The Natives refused cash. Rather, in 1969, they asked only that the oil companies promise to protect their Prince William Sound fishing and seal hunting grounds from oil.

 

In 1971, Exxon and partners agreed to place the Natives' specific list of safeguards into federal law. These commitment to safety reassured enough Congressmen for the oil group to win, by one vote, the right to ship oil from Valdez. 

 

The oil companies repeated their promises under oath to the US Congress.

 

The spill disaster was the result of Exxon and partners breaking every one of those promises - cynically, systematically, disastrously, in the fifteen years leading up to the spill.

 

Forget the drunken skipper fable. As to Captain Joe Hazelwood, he was below decks, sleeping off his bender. At the helm, the third mate would never have collided with Bligh Reef had he looked at his Raycas radar. But the radar was not turned on. In fact, the tanker's radar was left broken and disasbled for more than a year before the disaster, and Exxon management knew it. It was just too expensive to fix and operate.

 

For the Chugach, this discovery was poignantly ironic. On their list of safety demands in return for Valdez was "state-of-the-art" on-ship radar.

 

We discovered more, but because of the labyrinthine ways of litigation, little became public, especially about the reckless acts of the industry consortium, Alyeska, which controls the Alaska Pipeline.

- more -