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Ten years after In part two if this series, VECO managers look back at 1989 Exxon Valdez oil spill cleanup: a crisis, a handshake and an accounting nightmare Jim Prevost PNA Contributing Writer
Good Friday, March 24,1989. Exxon Valdez was hard aground, leaking crude oil into Prince William Sound. In these early hours before sunup at Bligh Reef, the official responses to questions in Juneau, Washington and Valdez had been rote confirmation that “an incident” had occurred.
Along the informal communications network, the first descriptions and accounts had spread from VHF to ham operators; from crowded waiting lounges in concourse “B” to the lunch counters in every scarf ‘n’ barf along every interstate: “It’s really big.”
That terse description got more attention than any authorized utterances captured by front yard microphones on this semi-official day of rest.
In Anchorage, it was holiday routine at VECO Corp. headquarters. A lot of projects, however, were at various critical stages, and there was plenty of work to do. To add to the ongoing operations in Cook Inlet and on the North Slope, the company was involved in a joint venture with NANA Regional Corp. to install ore processing and port facilities for the Red Dog lead and zinc mine near Kotzebue. As the oil industry began its recovery from the depression of the mid-1980s, more VECO drilling rigs were being refurbished and put into operation in Colorado, Utah, Nevada and California. Support facilities for offshore operations were being expanded in Southern California. In addition, the company was putting together a proposal to bid on providing logistical support for the National Science Foundation’s operations in Antarctica.
Jamie Slack, vice president and personnel services manager, heard about the spill on his way to work. Within a couple of hours, after the first calls had gone out to verify the scope of the disaster and to send the company’s 60 Cook Inlet oil spill response technicians from Kenai to Valdez, Slack found himself in charge of bringing in extra people to deal with the crisis and procuring equipment and supplies and getting it onto trucks for shipment to Valdez.
A frantic call came in at about 2 a.m. Slack jotted down a long list of supplies needed at Valdez, then began looking for a place to find the items required. Settling on B & J Sporting Goods, he dispatched an employee to find which security company’s logo was on the building.
Slack called the alarm company and explained the situation, but the people on duty there were understandably hesitant.
“I said, ‘You have two choices: either you can work with us and call the owner and have him call me, or we’ll rattle the door and set off the alarm and deal with repercussions later.’ So, the owner was down there at three in the morning and stood out there on the sidewalk as people just looted his store,” Slack said. “He wrote down everything that we took out of there, and we paid for it.” Change of plans Mac McKee was scheduled to leave on Monday for California on company business, but received a call from CEO Bill Allen, advising him of a change in plans. He found himself in charge of a squadron of pickup trucks loaded down with absorbent pads, rakes, shovels, rubber gloves and boots, bound for Valdez.
“And I never left Valdez,” he said, “except for one weekend, when I came back to town and slept for two days, then went back.”
Kelly Tyner, company comptroller, was not called during the weekend.
“I had a nice weekend,” she said.
“When I showed up Monday morning, it was like a bomb had gone off. People were running around like crazy. And, if your whole job is numbers and controls…‘Excuse me, you’re raiding stores?’ It was a bit of an adjustment for me.”
The company started hiring people right away.
“All our controls — identify the need, find out the person’s background — that all went out the window immediately,” Tyner said. “If you could walk, you got hired.”
VECO added more than 100 accounting people in the next three weeks. This necessitated double shifts for Tyner and most of her original 13 accounting people. One shift was for dealing with the accounting gymnastics associated with the spill, and one shift was for hiring and training people.
One night while expansion remodeling was under way, Tyner was working late, trying to get a large group of new employees familiar with the system, when a horrendous noise was followed by the disquieting sight of the business end of a chain saw exploding through the wall.
“Things like that stopped affecting us after a while,” she said. “We became immune to anything except a very big emergency, because everything was an emergency. Your whole level of what pushed your button went down dramatically, or else you couldn’t survive.”
Island-hopping, night-hawking There were 60 aircraft leased to support the cleanup. Most of them were helicopters, used to ferry personnel, documents and payroll. Float planes were used to transport critically needed parts and supplies to vessels and field operations. Wheeled aircraft were used for regular air service, which included three flights per day from Anchorage to Valdez, and one per day from Anchorage to Homer, Seward and Kodiak. One helicopter was assigned full-time to the helipad attached to the medical barge, for emergencies.
A typical day for McKee, who was appointed general manager for the entire cleanup project, began at 4 a.m. and ended at 2 a.m.
“I got my best sleep during the helicopter rides between task groups in the daytime,” McKee said.
After the normal daytime activities associated with the operation of such an enormous effort came a 7 p.m. meeting with Exxon officials, to plan the next day’s activities. It was a meeting that often ended with frantic calls to Anchorage headquarters, after hours, to arrange shipments of hard-to-find articles in equally hard-to-find quantities, that had to be on the dock the next morning.
“We were expected to have everything in place by the next morning,” McKee said. “So, in this day and age, you just can’t imagine the magnitude of things that were done on a handshake. I’d call these guys (Slack and Tyner) and say that I needed 10,000 rain suits. They’d say, ‘How many?’ But they’d get ‘em there. They flew stuff in from everywhere in the world.” Image: wiping the rock In the early stages of the cleanup effort, it seemed easier to row a boat through the crude than to move a decision through the bureaucratic goo. Action was delayed by arguments over procedure, environmental concerns and whose expert was to be believed. This led to the propagation of an image of the cleanup effort that, a decade later, still rubs VECO President Pete Leathard the wrong way.
“The first thing we had to do was protect the sensitive waterways and hatcheries. We put a lot of effort into that,” Leathard said. “The next deal was getting the oil off the beaches. How do you do that, without inflicting more damage than good?”
That was a question that caused frustrating delay. According to Leathard, anyone who called himself an expert was involved in trying to make that decision. Some argued that washing the beaches with cold water would just thicken the oil, making it harder to move. Others said hot water would kill all the plant life and insects, making the damage worse.
“During all that time,” said Leathard, “we were shipping people out there. When they got out there, they couldn’t go on the beaches. They weren’t allowed to do anything.
“There was a lot of publicity coming out about there being no action. So, somebody had the bright idea to at least put ‘em on the beach down there and have them do something. So, they got ‘em on the beach and told them, ‘You can’t turn over the rocks, but you can wipe off the surface of the rocks.’ They did that, I think, for one day, just one trip.
“Well, there were some pictures taken of that, and that image went around the world. That was the image of the oil spill around the world — some guy bending over and wiping a rock! That image needs to be put to bed once and for all.” Task groups Rick Smith, who is now VECO’s general manager for community and government affairs, was hired during the first week after the spill. He was assigned to Valdez, where he assisted McKee in setting up communications and procuring vessels for use in task groups.
“We had vessels going out two, three, four at a time to identify areas to be cleaned,” Smith said. “Shortly, we decided we’d organize into task groups, and that’s when we started to build large groups of vessels.”
Eventually, six task groups were formed in Prince William Sound, each having responsibility for a specific geographic area. Three other task groups were formed to handle the cleanup in the Gulf of Alaska.
Each task group employed 350 to 500 people, supported by approximately 100 vessels, including “mini-barges” equipped for cold water washing, “maxi-barges” set up for hot water washing and various housing vessels and support craft.
The first task group came on line approximately 30 days after the spill.
When the decision was made to organize task groups, an Exxon official was notified at one of the evening meetings. The official told McKee to bring him the requisition, and he would sign it — cautioning McKee not to make the requisition for more than $30 million, because that was all the official was authorized to sign for.
“We spent $29 million that night,” McKee said. “It was that kind of an effort.”
The company grew from 1,000 total employees before the spill to more than 10,000 by the end of summer. Most of those 9,000 extra people were headquartered in more than a dozen locales around the spill area. These people had to be trained, housed, fed, transported, clothed, equipped, supplied and paid. Besides being a logistics exercise to rival Hannibal crossing the Alps, It was an accounting nightmare.
“So we set up systems, and computers, coordination and paper trails, to put some kind of control on it,” Tyner said. “All the time, people kept saying, ‘Exxon will pay you. Exxon will pay you.’ My reply to that was, ‘Excuse me, but do they know how much money we’re spending?’ Our contract with Exxon then consisted of a handshake, which went against everything I’d ever learned.”
McKee acknowledged the need for order and controls, but said the lack of such authority was not all bad. He said that in the early days, people were truly on board because there was an emergency, and they were doing their part to help.
“That is what really made you feel good about the thing — everybody was just basically not worried about a contract or how they were going to get paid,” he said.
Aside from the oil spill, 1989 was VECO’s largest year ever, to date, by more than 30 percent.
“We went from $110-120 million in 1988 to $160 million, outside the oil spill work, in 1989,” Smith said.
Though many thousands of people were hired to deal only with cleanup operations, VECO’s key management personnel, while giving priority to the cleanup, also had to maintain relationships with existing clients.
“So, as we took on all these added responsibilities overnight,” Slack said, “it was really impressive how everybody stepped up a bunch of notches.”
Next month: Why the smartest thing Exxon could have done was to hire VECO as their prime contractor.
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