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 A number of factors have been blamed for the accident, including crew fatigue, outdated and malfunctioning navigation equipment, and allegations that the captain was drunk.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.

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.

Recommended

The charts that matter: more pain for goldbugs
Economy

The charts that matter: more pain for goldbugs

Gold investors saw more disappointment this week as the yellow metal took a tumble. Here’s what’s happened to the charts that matter most to the globa…
18 Sep 2021
The new social-care levy: an unfair tax that protects the “assetocracy”
National Insurance

The new social-care levy: an unfair tax that protects the “assetocracy”

The government’s regressive social-care levy will make Britain’s tax system even more complex. Root-and-branch reform is long overdue.
18 Sep 2021
Kieran Heinemann: the history of shareholder capitalism
Investment strategy

Kieran Heinemann: the history of shareholder capitalism

Merryn talks to Kieran Heinemann, author of Playing the Market: Retail Investment and Speculation in Twentieth-Century Britain, about the history of t…
17 Sep 2021
Cryptocurrency roundup: litecoin blunder, cardano update and bitcoin mining in Laos
Bitcoin & crypto

Cryptocurrency roundup: litecoin blunder, cardano update and bitcoin mining in Laos

Saloni Sardana looks at the week’s biggest stories in the world of cryptocurrencies.
17 Sep 2021

Most Popular

The times may be changing, but don’t change how you invest
Small cap stocks

The times may be changing, but don’t change how you invest

We are living in strange times. But the basics of investing remain the same: buy fairly-priced stocks that can provide an income. And there are few be…
13 Sep 2021
Two shipping funds to buy for steady income
Investment trusts

Two shipping funds to buy for steady income

Returns from owning ships are volatile, but these two investment trusts are trying to make the sector less risky.
7 Sep 2021
Should investors be worried about stagflation?
US Economy

Should investors be worried about stagflation?

The latest US employment data has raised the ugly spectre of “stagflation” – weak growth and high inflation. John Stepek looks at what’s going on and …
6 Sep 2021