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Eight years after Exxon settlement, some seek $100 million from 'reopener' clause

Suzanna CaldwellAlaska Dispatch News
The Exxon Valdez oil tanker. NOAA

Monday marked the 25th anniversary of the Exxon Valdez oil spill, and questions still linger over whether Alaskans received their fair share from the settlement.

In Juneau, Anchorage Sen. Berta Gardner introduced Senate Joint Resolution 25, asking the state and federal governments to consider filing a motion in U.S. District court to compel ExxonMobil Corp. to pay additional damages related to a controversial provision in the 1991 spill settlement agreement.

In introducing the bill, Gardner said her desire was two-fold: To ensure Exxon is held accountable for what it owes Alaskans for costs related to the spill, and to put resource developers on notice they'll be held to high a standard as they pursue resource development in the state.

"We have not done all that we could (with Prince William Sound)," she told the Senate Judiciary committee Monday. "That effort is ongoing, and we want to make sure we don't miss our opportunity."

On March 24, 1989, the Exxon Valdez oil tanker ran aground on Blight Reef, 25 miles outside of Valdez. A gash in the tanker's hull allowed 11 million gallons of crude oil to seep into Prince William Sound. Volunteers flooded the region to assist with a clean-up that would end up costing Exxon billions of dollars.

Two years later, the company settled with the U.S. and Alaska governments for almost a billion dollars in civil, criminal and associated fees. Part of that settlement included a "reopener" clause, meaning an additional $100 million going toward environmental damages unknown at the time of the settlement could be paid if governments could show ongoing damages.

But figuring out those costs, like much of the rest of the settlement, has been tricky. In 2006, both the state and federal government submitted a claim to the company to pay the $92 million to fund continued recovery efforts -- just a day before the deadline to submit the claim and 15 years after the settlement agreement. But Exxon has declined to pay, essentially arguing that the original consent decree covered the costs of lingering oil and that neither government has pushed for payment. 

While 13 of the 32 monitored populations of wildlife in the sound are classified as "recovered" or "very likely recovered" a few species, including Pacific herring and killer whales, are listed as not recovering. Whether that's because of the oil spill is unknown -- and whether the reopener would even cover them appears to be in question.

“Recent government studies of the potential impact of lingering oil on sea otters and harlequin ducks show no ongoing impact, and both animals have recovered from the spill," Exxon Spokesman Richard Keil wrote in an email. "The governments’ demand related to the reopener in 2006 was based on the effects of the oil on these species. It’s important to note that the reopener provision was intended to serve as insurance against a wholly unforeseen, catastrophic failure of a species or a population caused by the spill.”

Former University of Alaska Fairbanks marine science professor Rick Steiner, a longtime critic of the lack of movement on the reopener efforts, called the current situation "disgraceful."

"(The Exxon Valdez settlement) is the longest-lasting environmental lawsuit in world history, and that's nothing to be proud of," he said from Washington D.C. Monday. "It's a betrayal, not just by Exxon, but by state and federal governments for not collecting and not doing everything that could be done."

Steiner called the reopener a kind of "unwanted stepchild of government and industry." Still, while the settlement -- only $100 million, or $127 million including 5 percent interest -- is chump change in terms of the settlement, it sets a precedent. In total, Exxon paid more than $4 billion, including the cost of cleanup. Steiner said he heard that BP, in the midst of dealing with its own settlement relating to the 2010 Deepwater Horizon spill, is also trying to figure out how to handle the reopener provisions. Steiner suggested for example there be a "trigger" timeline, forcing industry to pay within a set timeline or else have courts settle it.

"We've learned a lot from this," he said.

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