Air Date: Week of September 30, 1994
Commentator Nancy Lord expresses her view on the $5 billion in damages a jury recently awarded to Alaskan plaintiffs for the oil spill in Prince William Sound.
CURWOOD: After more than 4 months, jurors in Alaska recently rendered a verdict against the Exxon Corporation for punitive damages from the 1989 Exxon Valdez oil spill in Prince William Sound. The $5 billion judgment is the largest punitive award ever levied against a corporation. Living on Earth commentator Nancy Lord was one of the plaintiffs in the case. She says the jury award is a mixed blessing.
LORD: Five billion dollars is a lot of money, no question about it. One of Exxon's attorneys said, when it was over, that he thought it was a case of the jury not appreciating what $5 billion means. Exxon plans to appeal. I think, in fact, the jury knew precisely how much $5 billion is. Early on, they determined that Exxon and Captain Hazelwood had been reckless in causing the spill. And the whole idea of punitive damages is punishment. The fine should hurt. The fine should make Exxon and others who put our environment at risk think about potential costs and make business decisions accordingly.
The Exxon Valdez was an almost new tanker at the time, but was built with a single, rather than double, hull, to save money and leave more cargo space for oil. A captain with an alcohol problem was put at the helm, and the crew was trimmed, again to save money. Somewhere along the line, Exxon calculated that such savings, short cuts, and yes, recklessness, were profitable. They decided to assume a level of risk as a cost of doing business.
So, $5 billion. That equals $455 for each of the 11 million gallons of oil spilled. It's about 3 times the value of Alaska's yearly total fish and shellfish harvest. If evenly divided among the 14,000 plaintiffs, each would receive over $357,000. Looked at with a different yardstick, $5 billion equals roughly one year's profit for Exxon. The initial reaction of the stock market was telling: Exxon's stock rose slightly. Analysts say the judgment will not have significant long-term effects on either Exxon or its shareholders.
Does it hurt yet? I have my doubts. But already the oil industry and its apologists are threatening their worst. They say large jury awards make it tough to do business in this country. And if we make it too tough for them, they'll take their business elsewhere. I'm not sure that threats to abandon highly profitable oil fields and markets to do speculative business with unstable Third World governments are very credible. But there is a real question here. As we safeguard our American environment and health, do we sometimes end up exporting pollution and other problems to peoples less able to protect their homelands and themselves? The Exxon Valdez case shows the need for uniform international standards that will keep rust buckets and cavalier attitudes from all our oceans. We're all, after all, riding aboard the same blue boat.
CURWOOD: Commentator Nancy Lord is a writer and salmon fisher from Homer, Alaska. She comes to us from member station KBBI.
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