April 28, 2006

Unpaid Valdez Damages Helps Fuel
Public Ire toward Oil Industry

On March 24, 1989, shortly after midnight, the oil tanker Exxon Valdez struck Bligh Reef in Prince William Sound, Alaska, spilling more than 11 million gallons of crude oil into an area heavily relied upon by local fisherman. Five years after the disaster, an Anchorage jury awarded $5 billion in punitive damages to 34,000 fishermen and other Alaskans whose livelihoods were destroyed by the spill, agreeing with the plaintiffs’ assertion that the Valdez captain was drunk and that Exxon knew he had a drinking problem.

To this day, ExxonMobil remains unwilling to satisfy a judgment for damages it caused more than 17 years ago.  Yet the corporation reported earnings of $8.4 billion over the first quarter this year and recently provided their outgoing CEO with a $400 million retirement package. If an environmental conscience is insufficient motive for Exxon to make these fishermen whole again, then at minimum, a concern for the company's own public image should be enough to prod them to do the right thing.

As a former judge and prosecutor, I am fully understanding of ExxonMobil’s fundamental right to appeal these damages -- a right to which every American individual and company is entitled under our legal system. But the Valdez example typifies the cognitive dissonance and outright resentment many Americans have when they analyze the oil industry: record industry profits, lavish executive bonuses, and incomprehensible severance packages, and all the while Americans continue to get walloped with rising gas prices at the pump.

American consumers are taking a brutally hard hit with current gas prices, which act as a tax on the nation’s economy. House Republicans have acted aggressively, and last summer we passed legislation to diversify our oil supplies, ease the construction of new refineries and criminalize price gouging. But we want to do more. This week, Congressional leaders unveiled our strategy to combat the escalating and volatile price of gas, and we will consider an array of common-sense remedies to aid American consumers who feel they are getting hosed at the pump, and to protect our economy and American jobs from the emasculating impact of energy costs.

First, we will look to open up Arctic National Wildlife Refuge (ANWR) to allow American ingenuity and American technology to produce energy safely, protect the environment, and strengthen our national security. If we are to do more than pay lip service to the idea of energy independence, then we must take advantage of the natural resources available to us within our nation’s borders and reduce our reliance upon Middle Eastern oil producers.

Second, Congress will further ensure that Americans are getting a fair deal at the pump, and are not being victimized by price gouging or collusion. Americans must have confidence that gas prices are not being surreptitiously manipulated and that stations are not engaging in anti-competitive practices. To that end, Congress will push for legislation that provides for federal civil penalties for violations and empowers the Federal Trade Commission, in coordination with state attorneys general, to work to improve standards and enforcement mechanisms.

Congress will also look to limit boutique fuels – blends and additives to gasoline which drive up the costs of producing gasoline, and often lead to gas shortages in different markets. While boutique fuels burn more cleanly, air pollution has decreased over the past three decades primarily due to more efficient automobile engines, not because of these costly additives. And in the case of methyl tertiary butyl ether (MTBE) – a boutique fuel that has been added to gasoline at various levels since the late 1970’s – the additive actually proved to be environmentally harmful, contaminating some drinking water sources.

Finally, Congress will consider a short-term fix by limiting deposits into the Strategic Petroleum Reserve during summer months to increase the supply gasoline at a lower cost at a time when it’s most in demand, and a long-term solution of advancing the use of hydrogen – a virtually emission-free potential energy solution that could ultimately eliminate the planet’s reliance upon fossil fuels. While a hydrogen-based energy answer is years from being realized, America must recognize the finite limits of the earth’s fossil fuels, and vigorously pursue clean and safe energy alternatives.

Lavish salaries and corporate profits enjoyed by the oil industry are by no means evidence of underhanded activity; however, they are patently offensive to central Ohioans who must choose between filling their tank and feeding their families. And as Exxon’s lawyers continue to fight the damages ordered by an Alaskan jury over a decade ago while simultaneously enjoying record profits, it appears antithetical to any notion of shared sacrifice during this decidedly difficult energy crunch.

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