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Exxon valdez case study

What is exxon mobil?
ExxonMobil, the largest publicly traded international oil and gas
company, uses technology and innovation to help meet the worlds
growing energy needs. We hold an industry-leading inventory of
resources and are one of the worlds largest integrated refiners,
marketers of petroleum products and chemical manufacturers.

When and where its happen?

An oil tanker from Exxon which namedExxon Valdezhappened oil spill crisis on

Friday, March 24, 1989.

The oil tankerbound forLong Beach, California, struckPrince William
Sound'sBligh Reefat 12:04am.
It is considered to be one of the most devastating human-caused environmental
disasters.
At that moment, Exxon was ranked in the top five largest companies in America.
Its CEO was Lawrence G. Rawl.
The captain forExxon Valdezon that night was Joseph Hazelwood, however he
left his post when the oil tanker headed for Bligh Reef.
Third Mate Gregory Cousins who was in charge ofExxon Valdezwaited too long
to get the order about turning direction for the oil tanker, as a result; the tanker
had run aground on the rocks with ripping open a huge hole in its hull.

 The map showing the affected area.

The trajectory of the oil spill from day 1 until day 6.

Causes : how did the accident

happen?
The National Transportation Safety Board investigated the accident and
determined that the probable causes of the grounding were:
The failure of the third mate to properly maneuver the vessel, possibly due to
fatigue and excessive workload;
The failure of the master to provide a proper navigation watch, possibly due to
impairment from alcohol;
The failure of Exxon Shipping Company to supervise the master and provide a
rested and sufficient crew for theExxon Valdez;.
The failure of the U.S. Coast Guard to provide an effective vessel traffic system.
The lack of effective pilot and escort services.

 According to official reports, the ship was carrying

approximately 55million US gallons (210,000m3) of oil, of
which about 10.1 to 11million US gallons (240,000 to
260,000bbl; 38,000 to 42,000m3) were spilled into the
Prince William Sound.

The impact
After the oil tanker hit reef, it leaked massive crude oil in Prince William

Sound. Prince William Sound was abundance of sea life.

Approximately 1300 miles of shoreline were impacted by the oil.200 miles
were heavily or moderately oiled and 1100 miles were lightly or very lightly
oiled. It is stretched From Bligh to the tiny village of Chignik on the Alaska
Peninsula. The estimation is about 460 miles.
As a result, the crude oil spill not only polluted the environment around
Alaska, it also had a negative impact on sea life in Sound. Besides that,
people had a fear to travel to Alaska.
Exxon says it spent about $2.1 billion on the cleanup effort.
This disaster resulted in International Maritime Organization introducing
comprehensive marine pollution prevention rules (MARPOL) through various
conventions.

Cont.
Exxons reputation was greatly damaged because of their
reaction to the situation. They did not handle any part of
the crisis well, making the damage even worse on
themselves.
They lost customers and support for their company.

Economic impact of the spill

In the years immediately following the oil spill, the governments funded several studies
to evaluate the economic effects of the spill. The five studies funded by the State of
Alaska are:

A Preliminary Economic Analysis of Recreational Fishing Losses Related to

the Exxon Valdez Oil Spill (December 1992)

Alaska Sportfishing in the Aftermath of the Exxon Valdez Oil Spill

(December 1992)

An Assessment of the Impact of the Exxon Valdez Oil Spill on the Alaska
Tourism Industry (August 1990)

Replacement Costs of Birds and Mammals (December 1992)

A Contingent Valuation Study of Lost Passive Use Values Resulting from the
Exxon Valdez Oil Spill (November 1992)

Cont.
The studies of sportfishing activity and tourism indicators
(vacation planning, visitor spending, and canceled
bookings) all indicated decreases in recreation/tourism
activity. The contingent valuation study estimated the lost
passive use value at $2.8 billion. The replacement cost
study identified a per-unit replacement cost of various
seabirds and mammals, as well as eagles.

The steps they do to control the

oil spills.

The immediate strategy was to clean the crude oil up as quickly as possible and

recover normalcy to Alaska.

Iarossi fired the captain ofExxon VeldezHazelwood.
Cornet set up a media center in Valdez for reporters and photographers.
Don Cornet reported the situation to the head of public affairs and swiftly arrived at
the Alaska.
Iarossi held a press conference.
CEO Rawl refused to go to the site and thought technologically obsolete.
Cornet asked Mason to handle the bad effect on the tourism industry and sea animals.
Manson referred a public relations agency in Anchorage to help cope with bad impact
on the seafood industry in Alaska.
The media tours and guidelines were planed to the Exxon animal rescue centers.
News conferences were held to convince public that Alaskas tourism industry was not
affected by the spill.
Exxon funded an advertising campaign to encourage Alaskas tourism.

More technique that were

used
Hot watertreatment was popular until it was determined that the
treatment could be causing more damage than the oil. Small organisms
were being cooked by the hot water.
High pressurecold water treatment and hot water treatment involved
dozens of people holding fire hoses and spraying the beaches. The water,
with floating oil, would trickle down to the shore. The oil would be
trapped within several layers of boom and either be scooped up, sucked
up or absorbed using special oil-absorbent materials.
Mechanicalcleanup was attempted on some beaches. Backhoes and
other heavy equipment would till the beaches to expose oil underneath so
that it could be washed out.

Consequences of the incident

The public relations campaign reached 50 million Americans while the advertising campaign reached even

more people
Tourism for the following year set a new Alaskan record. Tourism rose by 5% over the year before the spill
It took Exxon a month after the spill to have the equipment on site for a full scale clean-up; the company stated
it had spent $2.1 billion in clean-up and another $1 billion in fines, criminal restitution, and civil settlements to
state and federal governments; the company was originally fined $5 billion, but after several appeals, the U.S.
Supreme Court dropped the fine to $507.5 million (instead of $5 billion) to be paid to Alaskan natives,
fisherman and business owners
In 1999, scientists announced that Prince William Sound was recovering although not fully; environmental
groups still demonstrate against ExxonMobil, but the demonstrations have had no impact on the companies
business
Captain Hazelwood was acquitted of operating the tanker while intoxicated but he was charged with
negligence, fined and ordered to perform community service; Cousins, the third mate in charge at the time of
the spill was promoted to second mate on another ship
Exxon became a prodrome for other oil companies and now all companies operating in Alaska must have a
crisis plan approved by the state
Rawl resigned and the new Exxon CEO created the position of public relations manager and restructured the
organization so that the public relations department would have easier access to the CEO; Cornet was named
to this position in 1993

Additional Facts
The seas were calm and they had clearly marked maps.
Uncertified 3rd mate Gregory Cousins was at helm while Capt. Joseph
Hazlewood had been drinking and was resting.
Dead:
500,000 birds (90 species), including 150 bald eagles
4,500 sea otters

14 killer whales
Salmon, herring, clams, mussels, seaweed

Cont.
No human life lost, though 4 deaths associated with
cleanup
Immeasurable toll on tourism & fishing industry
Still known as one of the largest spills in history and is
widely considered the number one spill worldwide in
terms of damage to the environment. The timing of the
spill, the remote location, the thousands of miles of
shoreline with an abundance of wildlife all combined to
make it an environmental disaster well beyond the scope
of other spills.

 The report on the exxon valdez.