A well-designed disaster: the untold story of the Exxon Valdez
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A well-designed disaster: the untold story of the Exxon Valdez
Fifteen years after the world's most notorious oil spill, ExxonMobil has
still not paid for the damage it caused and the story of what really happened
has not yet been told. Award-winning investigative journalist Greg Palast
exposes the cover-up.
On March 24, 1989, the Exxon Valdez broke open and covered twelve hundred miles
of Alaska’s shoreline with oily sludge.
The official story remains "Drunken Skipper Hits Reef." Don’t believe it. In
fact, when the ship hit, Captain Joe Hazelwood was nowhere near the wheel, but
belowdecks, sleeping off his bender. The man left at the helm, the third mate,
would never have hit Bligh Reef had he simply looked at his Raycas radar. But
he could not, because the radar was not turned on. The complex Raycas system
costs a lot to operate, so frugal Exxon management left it broken and useless
for the entire year before the grounding.
The land Exxon smeared and destroyed belongs to the Chugach natives of the
Prince William Sound. Within days of the spill, the Chugach tribal corporation
asked me and my partner Lenora Stewart to investigate allegations of fraud by
Exxon and the little-known "Alyeska" consortium. In three years’ digging, we
followed a twenty-year train of doctored safety records, illicit deals between
oil company chiefs, and programmatic harassment of witnesses. And we documented
the oil majors’ brilliant success in that old American sport, cheating the
natives. Our summary of evidence ran to four volumes. Virtually none of it was
reported: The media had turned off its radar. Here’s a bit of the story
you’ve never been told:
We discovered an internal memo describing a closed, top-level meeting of oil
company executives in Arizona held just ten months before the spill. It was a
meeting of the "Alyeska Owners Committee," the six-company combine that owns
the Alaska pipeline and most of the state’s oil. In that meeting, say the
notes, the chief of their Valdez operations, Theo Polasek, warned executives
that containing an oil spill "at the mid-point of Prince William Sound not
possible with present equipment" – exactly where the Exxon Valdez grounded.
Polasek needed millions of dollars for spill-containment equipment. The law
required it, the companies promised it to regulators, then at the meeting, the
proposed spending was voted down. The oil company combine had a cheaper plan to
contain any spill – don’t bother. According to an internal memorandum,
they’d just drop some dispersants and walk away. That’s exactly what
happened. "At the owners committee meeting in Phoenix, it was decided that
Alyeska would provide immediate response to oil spills in Valdez Arm and Valdez
Narrows only" – not the Prince William Sound.
Smaller spills before the Exxon disaster would have alerted government
watchdogs that the port’s oil-spill-containment system was not up to scratch.
But the oil group’s lab technician, Erlene Blake, told us that management
routinely ordered her to change test results to eliminate "oil-in-water"
readings. The procedure was simple, says Blake. She was told to dump out oily
water and refill test tubes from a bucket of cleansed sea water, which they
called "the Miracle Barrel."
A confidential letter dated April 1984, fully four years before the big spill,
written by Captain James Woodle, then the oil group’s Valdez Port commander,
warns management that "Due to a reduction in manning, age of equipment, limited
training and lack of personnel, serious doubt exists that [we] would be able to
contain and clean up effectively a medium or large size oil spill." Woodle told
us there was a spill at Valdez before the Exxon Valdez collision, though not
nearly as large. When he prepared to report it to the government, his
supervisor forced him to take back the notice, with the Orwellian command, "You
made a mistake. This was not an oil spill."
Slimey Limeys
The canard of the alcoholic captain has provided effective camouflage for a
party with arguably more culpability than Exxon: British Petroleum, the company
that in 2001 painted itself green (literally: all its gas stations and
propaganda pamphlets now sport a seasick green hue). Alaska’s oil is BP oil.
The company owns and controls a near majority (46 percent) of the Alaska
pipeline system. Exxon (now ExxonMobil) is a junior partner, and four other oil
companies are just along for the ride. Captain Woodle, Technician Blake, Vice
President Polasek, all worked for BP’s Alyeska.
Quite naturally, British Petroleum has never rushed to have its name associated
with Alyeska’s recklessness. But BP’s London headquarters, I discovered,
knew of the alleged falsification of reports to the U.S. government nine years
before the spill. In September 1984, independent oil shipper Charles Hamel of
Washington, DC, shaken by evidence he received from Alyeska employees, told me
he took the first available Concorde, at his own expense, to warn BP executives
in London about scandalous goings-on in Valdez. Furthermore, Captain Woodle
swears he personally delivered his list of missing equipment and "phantom"
personnel directly into the hands of BP’s Alaska chief, George Nelson.
BP has never been eager for Woodle’s letter, Hamel’s London trip and many
other warnings of the deteriorating containment system to see the light of day.
When Alyeska got wind of Woodle’s complaints, they responded by showing
Woodle a file of his marital infidelities (all bogus), then offered him payouts
on condition that he leave the state within days, promising never to return.
As to Hamel, the oil shipping broker, BP in London thanked him. Then a secret
campaign was launched to hound him out of the industry. A CIA expert was hired
who wiretapped Hamel’s phone lines. They smuggled microphones into his home,
intercepted his mail and tried to entrap him with young women. The industrial
espionage assault was personally ordered and controlled by BP executive James
Hermiller, president of Alyeska. On this caper, they were caught. A U.S.
federal judge told Alyeska this conduct was "reminiscent of Nazi Germany."
Cheaper Than Manhattan
BP’s inglorious role in the Alaskan oil game began in 1969 when the oil group
bought the most valuable real estate in all Alaska, the Valdez oil terminal
land, from the Chugach natives. BP and the Alyeska group paid the natives one
dollar.
Arthur Goldberg, once a U.S. Supreme Court justice, tried to help the natives
on their land claim. But the natives’ own lawyer, the state’s most powerful
legislator, advised them against pressing for payment. Later, that lawyer
became Alyeska’s lawyer.
The Alaskan natives, the last Americans who lived off what they hunted and
caught, did extract written promises from the oil consortium to keep the Prince
William Sound safe from oil spills. These wilderness seal hunters and fishermen
knew the arctic sea. Eyak Chief-for-Life Agnes Nichols, Tatitlek native leader
George Gordaoff and Chenega fisherman Paul Kompkoff demanded that tankers carry
state-of-the-art radar and that emergency vessels escort the tankers. The oil
companies reluctantly agreed to put all this in their government-approved 1973
Oil Spill Response Plan.
When it comes to oil spills, the name of the game is "containment" because,
radar or not, some tanker somewhere is going to hit the rocks. Stopping an oil
spill catastrophe is a no-brainer. Tanker radar aside, if a ship does smack a
reef, all that’s needed is to surround the ship with a big rubber curtain
("boom") and suck up the corralled oil. In signed letters to the state
government and Coast Guard, BP, ExxonMobil and partners promised that no oil
would move unless the equipment was set on the tanker route and the oil-sucker
ship ("containment barge") was close by, in the water and ready to go.
The oil majors fulfilled their promise the cheapest way: They lied. When the
Exxon Valdez struck Bligh Reef, the spill equipment, which could have prevented
the catastrophe, wasn’t there – see the Arizona meeting notes above. The
promised escort ships were not assigned to ride with the tankers until after
the spill. And the night the Exxon Valdez grounded, the emergency
spill-response barge was sitting in a dry dock in Valdez locked in ice.
When the pipeline opened in 1974, the law required Alyeska to maintain
round-the-clock oil-spill-response teams. As part of the come-on to get hold of
the Chugach’s Valdez property, Alyeska hired the natives for this emergency
work. The natives practiced leaping out of helicopters into icy water, learning
to surround leaking boats with rubber barriers. But the natives soon found they
were assigned to cover up spills, not clean them up. Their foreman, David
Decker, told me he was expected to report one oil spill as two gallons when two
thousand gallons had spilled.
Alyeska kept the natives at the terminal for two years – long enough to help
Alyeska break the strike of the dock workers’ union – then quietly sacked
the entire team. To deflect inquisitive inspectors looking for the
spill-response workers, Alyeska created sham emergency teams, listing names of
oil terminal employees who had not the foggiest idea how to use spill
equipment, which, in any event, was missing, broken or existed only on paper.
When the Exxon Valdez grounded, there was no native spill crew, only chaos.
The Fable of the Drunken Skipper has served the oil industry well. It
transforms the most destructive oil spill in history into a tale of human
frailty, a terrible, but onetime, accident. But broken radar, missing
equipment, phantom spill personnel, faked tests – all of it to cut costs and
lift bottom lines – made the spill disaster not an accident but an
inevitability.
I went back to the Sound just before the tenth anniversary of the spill. On
Chenega, they were preparing to spend another summer scrubbing rocks. A decade
after the spill, in one season, they pulled twenty tons of sludge off their
beaches. At Nanwalek village ten years on, the state again declared the clams
inedible, poisoned by "persistent hydrocarbons." Salmon still carry abscesses
and tumors, the herring never returned and the sea lion rookery at Montague
Island remains silent and empty.
But despite what my eyes see, I must have it wrong, because right here in an
Exxon brochure it says, "The water is clean and plant, animal and sea life are
healthy and abundant."
Go to the Sound today, on Chugach land, kick over a rock and you’ll get a
whiff of an Exxon gas station.
The final injustice
Everyone’s heard of the big jury verdict against Exxon: a $5 billion award.
What you haven’t heard is that ExxonMobil hasn’t paid a dime of it. It’s
been a decade since the trial. BP painted itself green and ExxonMobil decided
to paint the White House with green: It’s the number-two lifetime donor to
George W. Bush’s career (after Enron), with a little splashed the
Democrats’ way. The oil industry’s legal stalls, the "tort reform"
campaigns and the generous investment in our democratic process has produced a
Supreme Court and appeals panels that look more like luncheon clubs of
corporate consiglieri than panels of defenders of justice. In November 2001,
following directives of the Supremes, the Ninth Circuit Court of Appeals
overturned the jury verdict on grounds the punishment was too dear and severe
for poor little ExxonMobil.
The BP-led Alyeska consortium was able to settle all claims for 2 percent of
the acknowledged damage, roughly a $50 million payout, fully covered by an
insurance fund.
And the natives? While waiting for Exxon to make good on promises of
compensation, Chief Agnes and Paul Kompkoff have passed away. As to my
four-volume summary of evidence of frauds committed against the natives: In
1991, when herring failed to appear and fishing in the Sound collapsed, the
tribal corporation went bankrupt and my files became, effectively, useless.
Greg Palast is the author of The Best Democracy Money Can Buy (Constable and
Robinson), from where this article is taken.