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Environment

Exxon Valdez oil spill saga reaches anticlimactic end in federal court

  • Author: Yereth Rosen
  • Updated: September 28, 2016
  • Published October 15, 2015

Twenty-four years ago, U.S. District Court Judge Hezekiah Russel Holland gave his blessing to a landmark settlement that resolved criminal and civil complaints pressed by the federal and state governments against Exxon for its huge oil spill in Prince William Sound.

On Thursday, in the same Anchorage courtroom, Holland, who uses his middle name and first initial, heard attorneys tell him that the state and federal governments have no more reason to fight with the oil giant over the 1989 Exxon Valdez disaster.

At a status hearing, one in a long series held in Holland's courtroom in the years since the Exxon Valdez supertanker went aground March 24, 1989, the government attorneys summarized what they had already said in a 20-page report filed late Wednesday: They have dropped their effort to claim an additional $92 million from Exxon that could have been available under a special "reopener" provision in the 1991 spill settlement.

Under that settlement, Exxon paid $125 million in criminal fines and, over 10 years, $900 million in civil penalties for spill damages to publicly owned natural resources -- land, water and wildlife. Its reopener provision allowed the state and federal governments to seek up to $100 million more in future years for restoration projects to address unforeseen environmental damages. The governments in 2006 invoked that provision, demanding $92 million to pay for a program to identify and clean up lingering pockets of leftover Exxon oil. They said the oil, in scattered pockets of tidelands totaling about two miles in length, remained in quantities that had been unexpected in 1991.

Nine years later, state and federal attorneys told Holland, the governments concluded that the proposed program would not do much good and is no longer needed.

Though the decision to drop their reopener claim is not subject to his approval, Holland gave it anyway.

"I am satisfied that the governments gave this habitat-restoration plan a thorough and complete, fair evaluation and they reached a decision. That's what was supposed to happen," he said at the hearing. Some may disagree, he said. "But based upon what is in the report, I'm satisfied that it was the right decision," he said.

People still worried about the spill's impacts, Holland said, should take solace in the knowledge that restoration will continue with about $200 million still managed by the Exxon Valdez Oil Spill Trustee Council, the federal-state panel that administers the civil settlement funds.

"The analysis of what's going on in Prince William Sound doesn't end here today," he said. "It ends in court here today, but the process doesn't end."

Environmentalists and some Prince William Sound residents were bitterly disappointed by the decision to drop the reopener. A handful attended Thursday's hearing, part of an audience that was sparse compared to the crowds that packed the same courtroom two decades ago when Holland was presiding over civil and criminal Exxon Valdez proceedings.

They included Rick Steiner, a retired University of Alaska Fairbanks marine science professor who has bird-dogged Exxon Valdez issues since the tanker grounding. Abandoning the reopener was "a really dark end to a very dark chapter in Alaska history," said Steiner, a former fisherman who was the UAF marine advisory agent in Cordova when the spill happened and now heads his own environmental consulting business.

The reopener was "a flawed provision in the first place in 1991," structured to gives Exxon the right to refuse to pay, he said.

That contrasts with the federal government's and Gulf states' $20.8 billion settlement with BP for the Deepwater Horizon disaster, a deal that includes $700 million already set aside for natural resource damages to be discovered in the future, said Rick Steiner and Kate McLaughlin, head of the environmental group Prince William Soundkeeper. A trustee will decide how to use that money, and BP has no say in the decisions, they said.

McLauglin lamented another aspect of the reopener -- the claim had to be made by 2006 and could not be altered later, even if new information came in. Under that agreement, she said, "the world froze in 2006," she said. At that time, government attorneys decided they could not make a convincing case to invoke the reopener to address the post-spill Prince William Sound herring crash.

Since then, McLaughlin said, scientists have collected more evidence to link the spill to the Sound's herring woes. That includes new Exxon Valdez research by the National Marine Fisheries Service published last month that found salmon and herring embryos exposed to even very low levels of oil developed long-lasting cardiac defects.

Lingering oil will continue to harm fish, McLaughlin predicted. "We still have a number of threats to the Sound," she said. "The governments really let us down."

Attorneys for the state and federal governments defended their decision to drop the reopener.

There has to be an endpoint to even complex litigation, said Bill Brighton, assistant chief of the U.S. Justice Department's environmental enforcement section and one of the federal attorneys who negotiated the 1991 settlement with Exxon.

"The reality is, are we going to keep a case open for multiple decades while science (continues) its process of improvements?" he said.

Steve Mulder, chief assistant Alaska attorney general and head of the state Department of Law's environmental section, said several years of Exxon Valdez Oil Spill Trustee Council-funded studies yielded mixed results for the proposed reopener project.

That phased work identified spots of known and suspected lingering oil and tested methods of removal, he said. At the end, scientists concluded that there were probably only nine sites suitable for the type of piped-oxygen remediation that the 2006 reopener claim proposed, far fewer than the 63 sites believed to still hold oil, he said. Doing that remediation work would cost an estimated $4 million, far less than the $92 million originally sought, he said.

Much of the basis for the reopener claim has evaporated, the governments' status report said, because the species believe to be hurt by lingering oil -- sea otters and harlequin ducks -- have now rebounded to pre-spill levels and are considered "recovered," according to the spill trustee council's classifications.

Until the fatal Macondo well blowout that caused the Deepwater Horizon spill in 2010, the Exxon Valdez was considered the biggest U.S. oil-spill disaster; it still is a yardstick used to measure spills around the world. In the rich Prince William Sound environment, where the oil lingered before floating into the Gulf of Alaska and along the Kenai and Alaska peninsulas, it was particularly damaging to fish and wildlife, with a toll estimated to include 250,000 seabirds and thousands of marine mammals.

Much has changed since then. The spill spurred numerous legal and environmental reforms, like the Oil Pollution Act of 1990. Much time has passed; lawyers and judges involved in the case have died, noted Holland, a Reagan appointee who became a semi-retired senior judge in 2001.

"My colleagues have been fretting for 14 years that some of this litigation might outlast my time on this court. Happily, that hasn't happened," he said at the end of the hearing.

Holland himself has changed a bit. Now 79, he has less hair on the top of his head than in 1994 when he presided over the civil trial that produced a jury verdict ordering Exxon to pay $5 billion in punitive damages for reckless conduct leading up to the spill. The company launched a lengthy appeal; the U.S Supreme Court in 2008 ultimately cut that to about one-tenth of what the jurors ordered.

Like the governments' case, that private case is now over, with the final payouts made to plaintiffs and the final court reports filed months ago, said Lloyd Miller, one of the lead attorneys in the case.

But for Anna Young, who came to Holland's courtroom on Thursday wearing a shirt emblazoned with the slogan "Never Forget" to commemorate last year's 25th anniversary of the spill, the story continues.

She was a gillnet fisherman in Cordova when the Exxon Valdez ran aground. She was among the thousands of litigants affected by the 2008 Supreme Court ruling. "I got 10 cents on the dollar for my losses," she said. She used that money to start a new venture, a filmmaking company.

She is now mulling a new project -- sailing the Sound next year to document the sites where she is sure that Exxon Valdez oil still lurks.

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