13 March 1991: Exxon fined $1bn for Alaskan oil spill
Exxon agreed to pay up to $1bn to regulators and the state of Alaska on this day in 1991 after the oil tanker Exxon Valdez ran aground and spilled 11 million US gallons of oil into the sea – one of the worst environmental disasters in maritime history.
In 1967 a major oil field was discovered at Prudhoe Bay in the north of Alaska. Production began in 1977 and by the late 1980s output from this and other Alaskan fields accounted for a quarter of total US production.
To transport the oil from the far north, the trans-Alaska pipeline was built, running 800 miles from Prudhoe Bay to the town of Valdez, the nearest ice-free port. At Valdez, oil was loaded into tanker ships to be transported further south.
On 24 March 1989, the tanker Exxon Valdez ran aground on a reef. A number of factors have been blamed for the accident, including crew fatigue, outdated and malfunctioning navigation equipment, and allegations that the captain was drunk. Whatever the cause, the ship's hull was breached, sending at least 11 million US gallons of oil into the sea and onto nearby beaches.
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The result was one of the worst environmental disasters in maritime history. Large numbers of fish and birds died, with devastating knock-on effects on the Alaskan fishing industry. The US government took action against Exxon for breaching laws against pollution and to recover clean-up costs. On 13 March 1991, Exxon agreed to pay up to $1bn to regulators and the state of Alaska.
This wasn't the end of Exxon's liability. In 2008, it was ordered to pay civil compensation and $507.5m in damages to Alaskan fisherman and fishing firms (reduced from an initial award of $5bn). Delayed interest payments effectively doubled this bill. Experts estimate that the overall costs to the energy giant, including emergency payments and money the company spent on its own clean-up efforts, totalled $3.8bn.
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Matthew graduated from the University of Durham in 2004; he then gained an MSc, followed by a PhD at the London School of Economics.
He has previously written for a wide range of publications, including the Guardian and the Economist, and also helped to run a newsletter on terrorism. He has spent time at Lehman Brothers, Citigroup and the consultancy Lombard Street Research.
Matthew is the author of Superinvestors: Lessons from the greatest investors in history, published by Harriman House, which has been translated into several languages. His second book, Investing Explained: The Accessible Guide to Building an Investment Portfolio, is published by Kogan Page.
As senior writer, he writes the shares and politics & economics pages, as well as weekly Blowing It and Great Frauds in History columns He also writes a fortnightly reviews page and trading tips, as well as regular cover stories and multi-page investment focus features.
Follow Matthew on Twitter: @DrMatthewPartri
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