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Conflict rises over $92 million demand Exxon argues governments, still studying ways to clean up oil from 1989 spill, failed to submit valid ‘reopener’ restoration plan Wesley Loy For Petroleum News
ExxonMobil Corp. is arguing government officials, in effect, missed the boat in their demand for $92 million to address lingering environmental impacts from 1989 Exxon Valdez oil spill.
Lawyers for the company say the federal and state governments, in handing a demand for the money to Exxon in 2006, lacked a fully formed plan at that time on how to spend the funds for restoration. And today, five years later, the governments continue with studies to flesh out their plan.
Thus, the governments failed to submit a valid environmental restoration plan by the deadline in 2006, Exxon’s lawyers argued in a Sept. 15 filing in Alaska federal court.
The filing adds to escalating court arguments over the Exxon Valdez “reopener.”
A $900 million civil settlement in 1991 between the governments and Exxon over the spill in Prince William Sound contained a so-called reopener clause. The clause allowed the governments to request up to $100 million more to deal with unanticipated injury to habitats or species.
In 2006, as the deadline for a reopener request approached, the federal and state governments jointly demanded $92.2 million of Exxon.
But to date, the governments have not sued the company to enforce the demand.
Steiner presses the action For years, the reopener demand lay quietly in the background.
But in late 2010, Rick Steiner, a former University of Alaska professor and well-known oil industry critic, sought permission to file an amicus curiae or “friend of the court” brief asking a judge to order Exxon to pay the $92 million.
Steiner faults the governments for failing to go after the money long ago, and says the funds are needed to address ongoing environmental injury, 22 years after the tanker Exxon Valdez ran aground and spilled nearly 11 million gallons of North Slope crude oil.
A federal judge in March denied Steiner’s motion to file the amicus brief, reasoning that no active case existed on the reopener matter.
On Sept. 19, Steiner again submitted a motion to file an amicus brief. He requested the court order a hearing on government studies related to the reopener, why they have taken so long to complete, and “what additional ecological injury may have occurred due to the delay in government action.”
Steiner also asked the court to order Exxon to “immediately pay in full the August 31, 2006 demand for payment of $92,240,982 plus interest.”
Position of the governments Exxon’s lawyers are urging the court to settle the reopener issue by disqualifying the 2006 demand. They contend the governments didn’t submit a proper habitat restoration plan, but rather signaled an intent merely to reinstitute a cleanup federal and state on-scene coordinators declared complete many years ago.
“The best way to bring this matter to an end,” Exxon’s Sept. 15 filing said, is for the court to grant the company’s pending motion arguing it has no further cleanup obligation under the 1991 settlement.
Lawyers for the federal and state governments oppose Exxon’s motion, and on Sept. 15 they filed a status report on the reopener issue.
The governments won’t sue Exxon until certain habitat and wildlife studies are complete, the government lawyers said.
“The Governments undertook a pilot study during the summer of 2011 to test the feasibility of a technique of bioremediation to address the lingering oil,” the government filing said. “This technique is aimed at providing nutrients and oxygen to oiled subsurface sediments to accelerate biodegradation. The study has been conducted at a select number of beaches in Prince William Sound. The field work associated with this study has just concluded, and the Governments are now in the process of evaluating the success of the study methods in transporting oxygen and nutrients to oil patches and in degrading lingering oil.”
‘Next steps’ A report on the findings of the pilot study is expected in spring 2012, the government lawyers said.
Once all studies are complete, the governments anticipate discussing with Exxon its interest in participating in “the appropriate next steps,” and possibly settling the reopener demand.
In March, federal Judge H. Russel Holland, who has long presided over court cases flowing from the oil spill, urged the governments to “proceed with all possible speed” to complete the studies, and said public perception was that the reopener matter had gone unresolved for too long.
But Exxon’s lawyers, in their Sept. 15 filing, told the court no progress had been made toward a resolution, and they accused the governments of “stonewalling.”
“Since March, the Governments have not come forward with any new studies or scientific data supporting the assertion that they are entitled to an additional $92 million for restoration projects,” Exxon said. “The Governments have continued to frustrate Exxon’s Freedom of Information Act requests, they have failed to provide additional information of any kind, and there have been no additional settlement discussions between the parties.”
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