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Ten years after VECO managers look back at 1989 Exxon Valdez oil spill cleanup: human nature, complexities, why VECO was the perfect choice for job Jim Prevost PNA Contributing Writer
The silence of a city asleep was broken by the sounds of any awakening town: a cough; the clunk of a boot hitting the floor; a protesting groan from a screen-door spring; the morning news on a radio, three doors down.
The early chill was shrugged off, morning ablutions were completed, and greetings were exchanged. Conversation quietly began over a first steaming cup, and breakfast beckoned with its enticing aromas.
An hour after the morning meal, a crowd of commuters gathered — not for a train ride to an office or retail establishment in the center of the city, but for transport out to the city’s frontier. There they took up once again their grimy task of removing a stinking, sticky, black glaze from the city’s thousand-mile boundary — the rocky beaches of Prince William Sound.
Managing a marine metropolis “There really was a whole city living out there in Prince William Sound,” said Rick Smith, general manager for community and government affairs at VECO Corp. “It was probably about the fourth or fifth largest city in the state of Alaska.”
Smith had been hired by VECO in the first week after the Exxon Valdez grounding, and had been assigned to Valdez to assist project manager Mac McKee in setting up communications and procuring vessels for use in the cleanup effort.
“We had 20-plus tender vessels in the 125- to 250-foot class that took off sewage, supplied potable water and transferred food, supplies, materials and equipment from Valdez out to the task groups,” Smith said.
In addition to the support vessels supplying the task groups, there were nearly 100 vessels assigned to each group (PNA, March 1999), including housing vessels with large barges tied alongside to be used as decontamination stations. The housing vessels consisted of tour ships, U.S. Navy vessels, large pleasure craft and barges with construction camps attached to their decks.
Seiners, bow pickers and skiffs were employed to work offshore from the beaches being cleaned, to handle and control containment booms that surrounded the free oil. Skimmers were used to collect the oil into tanks that were then transferred to oil waste barges.
The great majority of these vessels were leased from ports around Prince William Sound and the Gulf. At the peak of the project, more than 2,000 vessels of all sizes were leased to Exxon and VECO.
Many vessels were older, and didn’t meet OSHA and Coast Guard standards. VECO was instructed by Exxon to bring them up to code, which meant anything from supplying PFDs (personal flotation devices) to running conduit and re-wiring the vessel and putting in new junction boxes and switching gear, or installing refrigeration, so food could be stored and people could actually live on these vessels.
Providing the necessities The tender vessels made the rounds constantly, providing spare parts, fuel and other supplies for all the task group vessels.
Providing job-related materials, however, took second billing to the support of hundreds of people in each task group, who also needed supplies and services.
“Every person who went aboard that boat, he basically tought his skivvies and a pair of Levi’s, and a couple pair of socks,” said McKee. “We put boots, shoes, rain gear and coveralls on him, washed that gear for him daily, made sure he had a place to take a bath.”
Meanwhile, the people kept coming from the central hiring center in Anchorage. Hiring operations had been relocated there to ease the strain on the little town of Valdez. After training, the new-hires were sent to Valdez, a busload at a time.
In addition, McKee was receiving staff people by the busload, who had been hired through recruiting programs administered in Anchorage.
“Forty-four people on a bus, who were superintendents, that I’d never seen, and I’ve got to sit down with them for five or 10 minutes, figure out what they can do and what they should do for us on the oil spill,” he said.
As the new people were plugged into the system, new orders had to be relayed into the supply system — already operating at a breakneck pace — so that extra shaving cream, toothpaste and cigarettes would meet the new worker or staff person in his or her new billet.
Exxon’s fortuitous decision Jamie Slack, VECO vice president and personnel services manager, was in charge of the massive support effort for the project, carried forth from VECO headquarters in Anchorage.
Slack said it was unfortunate that the spill happened to Exxon, who had virtually nobody in the state, rather than to BP or ARCO, who already had an operational base and would have been quicker to respond. Exxon had 20 percent of the oil, but no infrastructure here, because the other two companies were operating the field for them.
“As unfortunate as it was that it happened to Exxon,” Slack said, “the smartest thing that Exxon ever did was to choose VECO to be their contractor, because we knew Alaska. The first thing that would have happened if we hadn’t been there, I feel, is that they would have brought up a company from outside, and that outside company would have had all their relationships with outside vendors.
“This state would have suffered immensely, because Alaskans would not have even had the opportunity to take advantage of the employment opportunities, or the purchase and sale of goods. It really worked because VECO knew what to do to get the community involved in the project.”
From the start, Smith said, the standing order was to buy all materials and equipment locally.
“We just kept moving from Valdez to Cordova, Kodiak, Anchorage and Fairbanks, and our people would get everything they needed locally, until they had to go stateside or international,” he said.
Slack was quick to point out that even after it was determined that certain materials would have to be obtained outside the state, VECO allowed Alaska vendors to participate to every extent possible.
“Even after we knew they weren’t pulling stuff off their shelves — they were picking up the phone and ordering — we didn’t cut off the Alaskan vendor.”
Good relationships helped McKee credits the long-established relationships VECO enjoyed with BP, ARCO and Alyeska Pipeline Service Co. for helping his company get the contract for the cleanup work.
“Their contract people knew that what we said we were going to do we could do,” McKee said. “Every contractor of any size was beating on Exxon’s door, and the input provided by BP, Alyeska and ARCO people, saying we were upright, capable, and would do right by them had a lot to do with it. Their contracts people drove a lot of the issues to us, and finally we were selected as the prime contractor on the oil spill.”
Important for the community Kelly Tyner, who oversees the 13-person accounting department at VECO, was in charge of more than 100 “math majors” during the height of the cleanup effort. She believes that it was very important for the community at the time of the spill that the people at VECO had been here awhile.
A bank failure had forced the company to reorganize under Chapter 11 in 1982. During the reorganization, Tyner worked closely with the company’s vendors, and after two years all the company’s debts were paid.
“When the oil spill happened,” Tyner said, “every vendor we’d ever used called me and asked me, personally, ‘Are you going to pay me, Kelly?’ Because we had that relationship, they said, ‘OK … take the store.’”
Taking advantage of the system Although the leaders of the cleanup effort never lost their faith in people, it was inevitable in dealing with so many people that a few would try their luck with the system.
“It took us two or three weeks to figure out that we needed to badge people, to get a picture on those badges,” Tyner said.
“We’d have people coming in, taking the drug test,” Slack explained. “John Smith would be in the line, but a different John Smith would show up on the job. So, we had to get coordinated on things like this.”
The company after a while was constantly working on identifying areas of vulnerability. Eventually, they became sensitive to the prices they were paying for some items.
“Some people started realizing that they had the merchandise and they could take advantage because we needed the stuff and had an emergency situation,” McKee said.
It didn’t take long to identify those who were taking unfair advantage, Smith said, and take them out of the loop.
“The major suppliers that we still deal with today provided the materials then at the same margins they would today,” he said, “and made good money.”
McKee and Tyner agreed that a lot of avarice was manifested when the company was procuring boats and bringing them up to code.
“The greed showed up when the boat captains got involved,” Tyner said.
“We know a little about boats, and we knew that Exxon was getting ripped off,” McKee said. “We tried to bring in a little realism — ‘You know, that boat’s not really worth that much’ — back into the system. We tried to shop prices when we could.
“When the initial thrust was over, and we had done what we could to get the thing up and running, we started shopping a little bit, to try and keep the costs of this thing down, because we could see that it was going billions. And it did.”
Faith restored When the project ended and a final accounting of equipment was taken, VECO officials were pleasantly surprised at the low percentage of loss. McKee said that the shrinkage rate on major equipment returned was only 6 to 8 percent.
“Amazing,” he said, “when you take a little Achilles with a 40-horse outboard on it and you’re just sending it out to Timbuktu, you think, ‘God, will I ever see that again?’
“We got ‘em back.”
Agreeing with McKee that maintaining faith in their fellow Alaskans was justified, Slack recalled the early days after the spill, when loads were being hurriedly put together for shipment to Valdez.
“When we were dispatching all this equipment Mac was screaming for,” he said, “we weren’t sophisticated enough to set up manifests, where you could tell what was aboard shipment number such-and-such. I’d never been to Valdez before, and I was giving them directions like, ‘Drive until you can’t drive any farther, then start asking for Mac McKee when you get there.’
“From a control standpoint, that trucker could have turned off at Wasilla, and we would have never seen him again. But it all got there.”
A decade later Sitting with several long-time employees around one end of the large table at VECO’s headquarters meeting room, a visitor is impressed by the quiet confidence displayed by those who have helped accomplish a grand-scale, seemingly impossible task.
How did VECO take on such a mammoth project, hitting the ground running within 24 hours of the first call, when normally an undertaking of this magnitude takes years to plan?
Without doubt, a lot of planning was done on the run. In this case, however, implementation of the contingency plan had to be coordinated at so many levels, over such great distances and under such political pressures that one is left to wonder how it was possible.
“We’re privately held, and we’re kind of fast-track,” said Smith.
“It was very easy for decisions to be made,” said Slack, “based on the fact that the owner (VECO Chairman/CEO Bill Allen) was here directing, telling us what he wanted done.”
Tyner said that because her company was trusted, and because Anchorage at the time of the spill was still a relatively small community, VECO was able to react swiftly and get people and materials in motion. This surprised the auditors at Exxon, who had come in to help VECO get a system of controls in place.
“They were just in awe of what we could do in the state of Alaska, and how fast we could do it,” she said. “They’d never seen it before.”
“The only way you can get that done is to have a company in charge that was as reactive as VECO was,” said McKee. “We don’t know the word, ‘can’t.’ We figure out a way to get it done. It was just a total, team effort from every facility we had.”
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