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Judge to hear debate on ‘reopener’ issue Exxon looks to kill government request for $92 million to deal with lingering oil from 1989 spill in Alaska’s Prince William Sound Wesley Loy For Petroleum News
An Alaska judge has scheduled oral argument on ExxonMobil’s motion to effectively kill a government demand for $92 million from the company to address lingering pollution from the 1989 oil spill in Prince William Sound.
U.S. District Judge H. Russel Holland of Anchorage will hear arguments in mid-November, with the exact date still undecided as Petroleum News went to press.
Exxon’s attorneys on Sept. 30 filed court papers arguing the joint federal-state demand for the money is “doomed.” The demand is flawed, and the governments have missed the deadline to submit a perfected request, the company says.
A demand, but no collection
A $900 million civil settlement in 1991 between Exxon and the governments over the Exxon Valdez oil spill contained a “reopener” clause. The clause allowed the governments to request up to $100 million more from the company to deal with unanticipated injury to habitat or species.
In 2006, as the deadline for a reopener request approached, the governments jointly demanded $92,240,982 of Exxon.
But to date, the company hasn’t paid and the governments haven’t sued to enforce the demand.
Rick Steiner, an oil industry critic and former University of Alaska professor, triggered the current court flurry when, in December, he asked the judge to order ExxonMobil to pay. Steiner said the governments had shown a lack of resolve in going after the money.
Holland in March denied Steiner’s request. But he did ask the governments and Exxon to submit September status reports on the reopener issue.
That, apparently, inspired Exxon’s motion to disqualify the $92 million demand.
Disagreement on timing ExxonMobil argues that the governments want the money to resume cleanup of oiled beaches, and not for “restoration,” which the company argues is “something separate from and in addition to” cleanup. The reopener precludes demanding additional funds merely for cleanup, and anyway, Exxon long ago was released from any further cleanup liability, the company’s lawyers argue.
The company wants Holland to rule right away on the reopener demand, and urges the judge to effectively kill it.
The governments oppose Exxon’s motion, and argue the judge should not rule now. That’s because certain habitat and wildlife studies remain incomplete, government lawyers say. One study tests the feasibility of a bioremediation technique to break down lingering oil discovered in the subsurface of beaches.
“Exxon’s argument that any action designed to accelerate natural degradation of lingering oil is exclusively a ‘clean-up’ action, and therefore not a valid ‘restoration’ action under the Reopener, is merely an attempt to create an exception to the Reopener that was not negotiated by the Parties,” the governments argue.
ExxonMobil contends the studies are immaterial, as the 2006 deadline has passed for the governments to propose a qualifying restoration plan.
The company says that if the governments want to conduct further cleanup, the Exxon Valdez Oil Spill Trustee Council still has more than $175 million in investment accounts. The council is a federal-state partnership formed to oversee ecosystem restoration using the $900 million civil settlement.
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