Alaska's Billion-Dollar Quandary

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To a casual visitor, the chill, choppy waters of Prince William Sound show little evidence of the disaster that struck on Good Friday 1989. Nearly 11 million gal. of crude oil poured from a gash in the grounded tanker Exxon Valdez that day, forming a slick that eventually reached into the Gulf of Alaska and nearly to the Shumagin Islands, about 965 km (600 miles) away. More than 1,930 km (1,200 miles) of coastline was fouled; commercial and subsistence fishing were halted; populations of bald eagles, seabirds, otters and other animals plummeted; and at least 35 archaeological sites were sullied. Now, after four summers of intensive oil scooping and shoreline scrubbing, seals, whales and bald eagles are plentiful and the fishing season is in full swing. The water, rocks and sand look pristine once more.

But looks can deceive. According to biologists, Exxon's $2.5 billion cleanup effort was by no means as effective as the company has proclaimed. Many killer whales have vanished from Prince William Sound, while the social structure of the remaining groups appears to be breaking down. Several large colonies of murres, a seabird, have not produced any chicks in the years since the spill. Harlequin ducks, black oyster catchers and other animals have been contaminated by eating oil-drenched mussels, and sea-otter populations are hemorrhaging, literally and figuratively -- a side effect of hydrocarbon poisoning.

Part of the problem is the disaster's magnitude, but scientists and environmentalists charge that Exxon squandered vast sums on paperwork, ill- conceived cleanup techniques and heroic rescues. It cost the company about $80,000 for each of the several hundred otters it cleaned, many of which died anyway. The use of scalding-hot, pressurized seawater to hose down beaches left many areas almost sterile, empty of the limpets and other intertidal creatures that dwell there.

No amount of money could ever fully compensate for the havoc wreaked by the Valdez spill, but the record $1.025 billion in fines and damages imposed on Exxon by a federal judge last October should have provided the state and federal governments with an extraordinary opportunity to take further protective measures, assess remaining problems and mollify resentful citizens. Instead, the deal has touched off a chorus of outrage from residents and environmentalists, who wanted a minimum of $2 billion, and has ignited a fierce debate over how best to spend the sum. Says biologist Rick Steiner of the University of Alaska: "The last thing we want to see out of this is a stack of studies, symposia and who knows what else."

Unfortunately for Alaska, the windfall is far less than it seems. After deducting the sums owed to federal and state governments for past cleanup, litigation expenses and damage assessment, Alaska can expect just $635 million. How to spend it is the official business of the six-member oil spill trustee council, which includes the Alaska attorney general along with representatives from two state and three federal departments. The body has already come under fire. Alaskans claim that Washington's representatives are watching out for the Bush Administration's interests and that the council is unreceptive to the views of the public. Environmentalists criticize the council for acting too slowly and for wasting money on items like excessive overhead.