"Economic Development and the Environment"
on the Sakhalin Offshore Oil and Gas Fields II

Copyright (C) 1999 by Slavic Research Center, Hokkaido University.
All rights reserved

Oil Spills: Lessons from Alaska for Sakhalin

Rick Steiner

Social and Psychological Impacts:
The spill had an extraordinary destabilizing effect on human communities in the region. These communities are very dependent on commercial, subsistence, and recreational harvesting of natural resources from the nearshore area, and thus were particularly vulnerable to disruption caused by the spill. Several studies documented that the social fabric of many such communities essentially fell apart following the spill. There were well documented, often dramatic increases in post-spill anxiety disorders, post-traumatic stress, depression, alcohol and drug abuse, domestic violence, conflict among friends and within families, divorce, and even suicides tied directly to the spill. These impacts came mostly from uncertainty about the ecosystem's future, fear of food contamination, the chaos of the cleanup, and the ongoing fish stock collapses. Today, there is still a deep and profound sense of sadness in the region. Many residents have moved elsewhere to avoid the ongoing stress and memory of the spill.
Economic Impacts:
The spill forced many fishery closures in 1989, and caused a depression in salmon prices statewide out of fears of contaminated product reaching market. And with fish stock collapses in the Sound, a continuing depression in the fishing economy is apparent. While the year before the spill, the harvest value of fisheries from the Sound was $82 million, the total has been less than half of that since stocks collapsed in 1992. In 1993 Alyeska, the pipeline owner, paid $98 million to private claimants and about $31 million to the governments to settle their liability for the spill. A 1994 federal jury set Exxon's liability for compensatory damages (lost income) to 30,000 plaintiffs at about $280 million. Further, punitive damages of an unprecedented $5 billion were awarded by the jury, but Exxon continues to resist paying any of this amount, and ten years later the case remains on appeal in the 9th Circuit Court of Appeals. Exxon spent over $2.1 on their attempted cleanup, and another $1 billion for natural resource damages to the governments. Depending on how the appeals in the private civil suit unfold, the spill could ultimately cost Exxon well over $10 billion. Other damage estimates for the spill were much higher, including almost $3 billion in lost income by fishing industry and coastal businesses, and at least $3 billion in non-economic, or natural resource damages. The economic damage from this spill is, so far, without precedent.
The spill also initiated the most extensive attempt in history to mitigate damage from an environmental disaster. The $1 billion Exxon payment to the government was intended to be used specifically for the purposes of "restoring, rehabilitating, replacing, or acquiring the equivalent of natural resources injured by the oil spill." But even with all of this money and all the scientific attention given the injured ecosystem, it has become painfully obvious that little can be done to actually repair the biological damage from the spill. This has indeed been a bitter pill to swallow.
While little in the way of direct restoration was possible, most realized quickly that the coastal ecosystem faced other serious threats, predominantly clear-cut logging of the old-growth, coastal forest. Because these forests are critical habitat for many of the bird and fish species injured by the spill, their removal only further compromised recovery. Thus, the single most significant accomplishment for the government restoration program has been to acquire protections on over 700,000 acres of coastal habitat along the shores of the region, costing over $400 million. Altogether, some 1,300 miles of shoreline, including several hundred salmon streams, have been permanently protected with these monies.
Many feel that this habitat protection was the most important positive legacy of the Exxon Valdez spill.
But despite this achievement, it is clear that no amount of human intervention after a major oil spill will significantly repair or replace lost natural resources.
In summary, using the Exxon Valdez spill as an example, several important lessons for Sakhalin regarding major marine spills should be clearly understood:
- catastrophic spills can occur from a series of simple human errors
- in general, large spills cannot be contained - seldom is 10% recovered
- oil cannot be recovered effectively from water or shorelines
- ecological damage can be extreme and long-lasting
- social and economic damage can be extreme and long-lasting
- damage is generally not correctable
The inescapable conclusion from this is that once you've e spilled it, you've e lost. The damage is done and there will be little anyone can do about it. Most of our efforts then, should be focused on prevention of catastrophic spills.
Thus, if government and industry are really serious about wanting to prevent environmental damage to the marine ecosystem off Sakhalin and Japan, it is critical that many of the improvements suggested above be implemented soon so that the offshore oil and gas projects are operated in as safe a manner as possible.