Exxon Valdez Oil Spill

What Were Its True Costs?

Oiled bird being rehabilitated
•••

Justin Sullivan/Getty Images

The Exxon Valdez oil spill occurred when an oil tanker crashed onto the shore of Prince William Sound in Alaska on March 24, 1989. It contaminated 1,300 miles of coastline with 250,000 barrels or 11 million gallons of oil. 

Direct contact with the oil slick killed at least 250 bald eagles, 300 harbor seals, 2,800 sea otters, and 250,00 seabirds within a few days. Four people died as part of the clean-up efforts. Although it was only the 34th worst oil spill in history, its impact on the Alaskan shoreline made it the nation's biggest environmental disaster since Three Mile Island. 

Effect on Alaska

Fisheries for salmon, herring, crab, shrimp, rockfish, and sablefish were closed. Some shrimp and salmon commercial fisheries remained closed through 1990. Herring and salmon species never fully recovered. The commercial fishing industry that depends on them hasn't either. Over 2,000 Alaskan Native Americans and 13,000 other subsistence permit holders lost the source of their food. This continues today, as many are afraid of being poisoned by contaminated fish.

Economic Impact of Wildlife Loss

Wildlife value is measured by the cost to obtain or rehabilitate them. Exxon claimed to spend between $40,000 and $90,000 per sea otter rescued from Prince William Sound. The cost needed to replace the 2,800 sea otters killed by the spill was estimated at $11,500 each ($32.2 million total). The replacement cost of the 300 harbor seals killed was estimated to be $700 each, for a total of $210,000. Most seabirds cost $300 each, so replacing 250,000 costs $75 million. Eagles cost $22,000 each, so 250 are worth $5.5 million. The total cost for just these four species would be $112.91 million.

As of 2016, about 20 acres of Prince William Sound shoreline are still contaminated with 21,000 gallons of oil. Surprisingly, the oil is just as toxic as it was right after the spill. It is decomposing no more than 4% a year. It could take centuries to completely dissipate. Four species have not recovered, including a 36-member pod of killer whales that lost 15 members. Until all species recover, the economy that depends upon them cannot fully recover, either.

Clean-Up Costs

Exxon spent over $4.3 billion to clean up the site, compensate the 11,000 residents, and pay fines. But it could have been $4.5 billion more. The Alaskan court ordered Exxon to pay $5 billion in punitive damages in 1994. After 14 years of lawsuits and appeals, the U.S. Supreme Court ruled that Exxon only owed $507.5 million. That was only about 12 hours of revenue for the giant oil company.

Exxon Spill Was Caused by Its Captain

The Exxon Valdez disaster was caused by the negligence of its captain, Joseph Hazelwood. He was cleared of felony charges. He was convicted of a misdemeanor of negligent discharge of oil, for which he performed community service.

Hazelwood had been drinking during the day but did not appear intoxicated when he boarded the ship that night. He violated company policy by not being on the bridge during the transit of Valdez Narrows. Instead, it was steered by Third Mate Gregory Cousins. He had been working for 18 hours prior and could have been impaired by fatigue. As a result, he steered the ship off course to avoid ice. He did not correct in time to avoid grounding on Bligh Reef.