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What followed the emergency call by Exxon Valdez tanker captain Joseph Hazelwood went down as one of the biggest tanker oil spill disasters in history. On March 24, 1989, the massive Exxon Valdez went aground on rocks as it sailed out of Prince William Sound, Alaska. Some 25 years later the effects on the environment from the oil spill continue to be felt.

Federal scientists estimate that up to 80,000 liters of oil still lingers on the nearby beaches. Tim Donney, former Global Head of Marine Risk Consulting at Allianz Global Corporate & Specialty (AGCS), and his successor Captain Rahul Khanna remember the catastrophe and discuss how the Exxon Valdez incident changed the shipping industry. 

25 years later: Oil is still seeping from underground in water in a hole dug on a beach on Eleanor Island, Alaska.
25 years later: Oil is still seeping from underground in water in a hole dug on a beach on Eleanor Island, Alaska.

From the perspective of the shipping industry, which lessons have been learned from the Exxon Valdez oil spill?

Tim Donney: The damage was immense. The cleanup costs alone exceeded two billion dollars. And, since there was no corporate separation between the shipping company and Exxon corporation all liabilities flowed through to Exxon. So, one lesson that came out of the "Exxon Valdez" grounding was that Exxon and all other US oil majors either set up separate corporate subsidiaries, or divested themselves of owing an operating fleet of oil tankers. For example, Exxon created SeaRiver Maritime, Inc. and other oil majors chartered their oil carriers.

One of the other big ramifications was the creation of Oil Pollution Act of 1990. The act addressed another big issue: The Trans-Alaska Pipeline System (TAPS) Liability Fund. The fund was set up as a tax on oil companies to pay for any third party claims and clean-up costs that would come out of an oil spill. But since total damages related to the Exxon Valdez oil spill exceeded the TAPS Fund liability per incident of one hundred million dollars, it became clear that they had to do something differently.

The government created the National Pollution Liability Trust Fund for oil spills from a vessel whose limits of insurance where exceeded by the impact of a disaster. We were lucky in the circumstances that we had a big corporation like Exxon that could cover all the costs. But what if the tanker had been owned by a smaller company with limited financial resources?

Rahul Khanna: In addition, nowadays every tanker has to have a billion dollar financial security before they can operate in US waters. The financial security needs to be sent to the US Coast Guard and the US authorities before the tanker enters US waters.

Tim Donney, former Global Head of Marine Risk Consulting at Allianz Global Corporate & Specialty (AGCS): "Today vessels carrying oil as cargo have to be of double hull construction. However, a ship with double hull construction wouldn’t have changed much in the spill of the Exxon Valdez."
Tim Donney, former Global Head of Marine Risk Consulting at Allianz Global Corporate & Specialty (AGCS): "Today vessels carrying oil as cargo have to be of double hull construction. However, a ship with double hull construction wouldn’t have changed much in the spill of the Exxon Valdez."

Funds alone can’t protect from oil disasters. What has been done on the technical side?

Donney: We had legislation in the US sitting around since the 1970s about double hull construction for oil tankers. The Exxon Valdez incident renewed interest in that and got that moving. So today vessels carrying oil as cargo have to be of double hull construction. However, a ship with double hull construction wouldn’t have changed much in the spill of the Exxon Valdez.

 

What exactly happened when the Exxon Valdez ran aground?

Donney: Up there in the spring, the Columbia Glacier, which empties into Prince William Sound, is calving. Pieces of ice break off and then drift into the shipping channel that brings ships in and out of the Port of Valdez. So the common maneuver was to sail out of the shipping channel to pass these ice floats, which can’t be detected reliably on the radar. Then the ship must make a course change back into the shipping channel, at a predetermined time and pace yourself, otherwise a ship may go aground on Bligh Reef [reef off the coast of Bligh Island in Prince William Sound named after Bounty officer William Bligh]. And that’s what didn’t happen. The crew didn’t execute the turn into the channel at the right time and by the time they realized they missed it, it was too late. 

Timeline of recovery from Exxon Valdez Oli Spill

In an earlier interview with Allianz Open Knowledge you identified poorly trained crew members as one of the biggest risks for shipping safety. Could ghost ships or drone ships reduce this risk?

Khanna: The Exxon Valdez incident changed tanker shipping for good. It had a lot of far reaching consequences with regards to different factors such as the design. Double hull technology protects in case of low intensity collisions and grounding. But it is still debatable how much it saves the tanker from spilling oil in a major accident. So the biggest change that came out of the Exxon Valdez incidents was the implementation of the so called the ISM-Code (International Safety Management-Code) of ships and the protection of the environment. The ISM-Code focuses on human factors.

Donney: That’s about right. The Exxon Valdez incident really showed that we needed to do something. If you looked at the Exxon Valdez, by any measurement at the time it was run by a good company, the ship was in Class and by every measure, this was a quality ship, yet here we had this big disaster.

Khanna: You can have a very good ship, high quality operation but one small error from any person on the bridge or any other officer can lead to a disaster. The operations are still handled by the people on board. Human error still counts for roughly 80% of all accidents at sea. On the contrary, it is very difficult to say that if you replace the crew with machines it’s going to work better. In spite of these 80% of accidents caused by human error, I think humans still can assure and provide the key element of instant risk management that include decisions which need to be taken instantly.

Donney: In the late 80s, a passenger ship ran aground on the North American continent. The crew was relying exclusively on their satellite receiver for navigation. They ventured out of the shipping channel but didn’t realize it. What happened was: the wiring had become loose so the satellite receiver in the wheel house had lost the signal. The receiver defaulted to dead reckoning, that means a basic mode of operation that only measures the ground speed and course, but doesn’t take into account other significant factors like the current or wind. Not watching anything other than their satellite navigation system, the crew ran aground.

Captain Rahul Khanna took over the position from Tim Donney July 1, 2014."On the one hand we want people to be responsible for their actions. On the other hand we have installed draconian measures and put seafarers in jail. This development has become a real concern because it prevents quality seafarers from joining sea."
Captain Rahul Khanna took over the position from Tim Donney July 1, 2014."On the one hand we want people to be responsible for their actions. On the other hand we have installed draconian measures and put seafarers in jail. This development has become a real concern because it prevents quality seafarers from joining sea."

Say we would see a similar disaster to Exxon Valdez. How would the crisis management work today compared to back then?

Khanna: The onboard response to a major accident has improved quite a bit. There is lot of training drills and preparedness now. People are aware of what the consequences are for major disasters like the Exxon Valdez. I think the Oil Pollution Act of 1990 put a lot of additional regulation in place, including personal liabilities on the masters of tankers.

Donney: Which is not all positive. The Exxon Valdez incident was the first time that we saw negligence by a ship operation go from civil liabilities into criminal liabilities. Unfortunately this still exists. You could wreck a train or bus and the driver is not subject to criminal prosecution but if your ship runs aground and spill oil you are subject to criminal prosecution.

Khanna: One of the cases which come to my mind is the accident of the tanker Hebei Spirit 2007 in South Korea. There was a large crane barge being towed by a tug. The weather was bad and the tug wire broke so that the barge became loose and crushed into the oil tanker which was at anchor. The master and the chief officer of the tanker were put in jail. I was involved in the legal process of doing an accident investigation while working for London Offshore Consultants (LOC).

Cases like this highlight the problems with criminal liabilities on crew. On the one hand we want people to be responsible for their actions. On the other hand we have installed draconian measures and put seafarers in jail. This development has become a real concern because it prevents quality seafarers from joining ships. We have a large number of ships, a large number of specialized ships that also require a specialized crew. It takes years to teach these skills. Random criminalization of seafarers only adds to the problem of a shortage of good crew members. 

Michael Grimm

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