HARD AGROUND - Wreck of the Exxon Valdez - March 24, 1989



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Anchorage Daily News
Date: 04/04/89
Day: Tuesday
Edition: Final
Section: Nation
Page: A1

JUNEAU- The crude oil polluting Prince William Sound is spoiling the political environment oil companies have enjoyed in the legislature for a dozen years, with even the most ardent pro-oil legislators now saying no to development in some sensitive areas.

The spill has dominated legislative action since the March 24 wreck of the Exxon Valdez. Lawmakers' visits to the Sound, messages from angry constituents and media coverage of the disaster are beginning to make an impression in Juneau.

"There is going to be a different attitude toward the industry in the legislature following this last act of negligence," said Senate President Tim Kelly, R-Anchorage.

No more, say Kelly and other lawmakers, will blind faith direct legislators in dealing with the oil companies. A move to get rid of an oil company tax break, the socalled Economic Limit Factor, or ELF, may gain momentum, funding for the Department of Environmental Conservation may increase and future development will get a tougher look.

But no one knows how long the new attitude will last.

"Soon the tears will dry up and people will not pay as much attention as they should," said Sen. Jay Kerttula, D-Palmer.

And the oil companies already have begun to throw out political booms to contain the political damage from the spill.

"The potential environmental impact of drilling an exploratory well in Bristol Bay can in no way be compared to the incident in Prince William Sound," Gordon Evans, a lobbyist for Shell Oil Company, told the Senate Oil and Gas Committee on Monday.

Tom Cook, Chevron U.S.A. Inc.'s exploration representative for Alaska, told the same committee that it is important to keep "various petroleum operations in perspective in the aftermath of the massive oil spill in Prince William Sound."

Sen. Drue Pearce, R-Anchorage, said some oil companies have "made the argument that it is Exxon and not them. But I told them as far as I'm concerned they all have a part."

Already the oil companies have lost ground here:

* Last week the House voted 373 for a resolution calling on President Bush to cancel an oil lease sale in Bristol Bay. Similar resolutions have passed the House before, but not by such a wide margin, with most Republicans signing on, too.

One of the most surprising votes was the yes vote by Rep. Fritz Pettyjohn, R-Anchorage. Pettyjohn is one of the legislature's most conservative and prodevelopment members. But as the Exxon Valdez sat on Bligh Reef, burping crude oil into the Sound, Pettyjohn reversed his longtime stand in favor of drilling offshore in Bristol Bay.

"I don't change my mind very often but this was one I felt strongly about," he said Monday. "I've always voted against it in the past. But it is clear that no matter what kind of safeguards are taken concerning oil development, the accident in Valdez proved no system is immune to human error and the best intentions in the world don't mean you won't have another accident like that somewhere else."

Pettyjohn has also introduced legislation to establish an arbitration commission to help settle claims against Exxon.

* Monday the Senate Special Committee on Oil and Gas unanimously passed a similar resolution. The committee includes some of the Senate's strongest supporters of oil, including Chairwoman Pearce, Kelly and Sen. Paul Fischer, R-Soldotna.

Kelly, sounding more like an environmentalist than the leader of the oil industrybacked Senate coalition, said the vote would have been different if it had come before the spill.

"Of course we've been influenced by the Prince William Sound spill," he said. "That is the second time in two years that we have had an oil company that has done damage to the Alaska environment and enough is enough."

Pearce agreed the vote was greased by the spill. She said it may be an early warning sign of a change in the public's attitude toward Big Oil.

"I think the backlash is going to be on Big Oil as an industry," she said. "They have real public relations problems and a credibility gap."

* Monday Rep. Ron Larson, D-Anchorage, and co-chairman of the House Finance Committee, said the committee is considering introducing a bill to raise property taxes on the transAlaska pipeline. The additional money would go to create a $50 million emergency relief fund for oil spill cleanup with any excess funds going into the state general fund.

Larson, who last month voted against raising oil company taxes, said he didn't know exactly how much money the committee's plan would raise but he hoped it would be discussed soon.

Most lawmakers said there should be no direct connection between the spill and oil taxes. But voters don't see it that way.

"I've already gotten one or two phone calls from people who said pass the ELF. The oil companies deserve anything we can do to them," Pearce said.

And outside the Capitol on Monday, a small group of fishermen and environmentalists protested Exxon and Alyeska Pipeline Service Company's slow response to the spill. The protesters carried signs saying, "Oil companies break promises; break lives; break hearts" and "Exxon stashes the cash and passes the buck," but it was taxes they were shouting about.

"Tell your legislators to get off their butts and pass ELF today," shouted protest organizer Allan Stein.

House Speaker Sam Cotten, a strong supporter of doing away with the tax break, said he did not want to use the Valdez accident to get the Senate to pass the House's ELF bill. But, he said, there are connections.

"I think the industry has a credibility problem and it will spill over," he said. "The industry says a lot of things on the ELF issue that I have never bought into and maybe this will attract some attention to that."

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