Engineering Ethics

Chapter 6

1989: Exxon Valdez Oil Spill

75

THE REPORTED STORY

The New York Times Abstract:

A tanker filled to capacity with crude oil ran aground and ruptured yesterday

25 miles from the southern end of the Trans-Alaska Pipeline, spewing her cargo

into water rich in marine life. (Shabecoff, 1989)

THE BACK STORY

T

HE TRANS-ALASKA PIPELINE SYSTEM

After oil was discovered in Prudhoe Bay on the northern coast of

Alaska in 1968, the Alyeska Pipeline Service Company was formed by the

owner companies: BP Exploration, ARCO, Exxon, Mobil, Amerada Hess,

Phillips, and Union. Alyeska determined that the most economic method

of transporting oil from Prudhoe Bay to the U.S. west coast was oil trans-

port through a pipeline from the bay to Valdez, followed by oil tanker

transport south. President Richard Nixon signed the Trans-Alaska Pipeline

Authorization Act on November 16, 1973.

The Trans-Alaska Pipeline System (TAPS) consists of an extensive 800

mile pipeline (Figure 6.1), 11 pump stations, and an oil terminal at Valdez;

it cost more than $8 billion to build (USDIBLM, 2005).

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76 Engineering Ethics: An Industrial Perspective

Figure 6.1 A section of the Trans-Alaska Pipeline that is elevated to prevent permafrost

from melting.

Courtesy U.S.Army Corps of Engineers.

TAPS is fed by several North Slope fields, including the Prudhoe Bay

Oil Field. Prudhoe accounts for one-fourth of total domestic U.S. produc-

tion and, through 1996, about one-eighth of U.S. consumption. The Valdez

terminal contains 18 holding tanks, each of which holds about 0.5 million

barrels of crude oil. Smaller storage facilities at Valdez add another 0.2

million barrel capacity. The average flow from the North Slope drilling

sites for many years was 1.8 million barrels per day, or more than 650 mil-

lion barrels per year. The Valdez shipping lanes through Prince William

Sound are shown in Figure 6.2.

Alaska is very dependent on TAPS. Between 1969 and 1987, Alaskan

state taxes amounted to $1.5 billion per year; federal taxes amounted to $2

billion per year. During this same period, Alyeska made about $2.4 billion

per year in profit. Every year, each Alaska resident receives a TAPS divi-

dend check of between $800 and $1000. This conflict of interest may

explain why Alaskans allowed Alyeska to let construction and operations

requirements, which were conditions of congressional TAPS approval,

lapse. Even though the traditional Valdez industry is fishing, with more

successful fishermen able to bring in annual incomes of six figures,Alyeska

was allowed to extensively pollute Valdez waters.

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1989: Exxon Valdez Oil Spill 77

Figure 6.2 Prince William Sound and its shipping lanes.

Reprinted from Skinner, 1989, with additional citations.

These unfulfilled congressional requirements included 14 additional

storage tanks, an incinerator to destroy toxic sludge produced by the termi-

nals’ operations; and stainless steel (replaced by less expensive carbon

steel) in the toxic vapor recovery system of the storage tanks. The carbon

steel pipe sprang dozens of leaks, resulting in more toxic vapors being

released into the atmosphere. Although Alyeska had promised that its

oil fleet would be composed of double-hulled tankers, almost all tankers

reaching Valdez were single hulled.

The state of Alaska estimated that up to 1000 tons of hydrocarbons per

week entered the air through vents on the decks of the tanks. However,

Alyeska argued that tanker emissions were not its responsibility. Ballast

water also polluted the environment. Ballast water is carried by tankers

traveling to the Alyeska terminal to remain stable. The water is stored in

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