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Exxon Valdez to Be Junked Years After Worst U.S. Ship Spill

By Isaac Arnsdorf - 2012-03-20T13:48:35Z

Chris Wilkins/AFP/Getty Images

An oil skimming operation works in a heavy oil slick near Latouche Island near the southwest end Prince William Sound on April 1, 1989, a week after the beginning of an oil disaster which occurred when the tanker Exxon Valdez ran aground March 24, 1989 and spilled 11 million gallons of crude oil into Prince William Sound off Alaska.

The Exxon Valdez has been sold for scrap 23 years after causing the worst tanker spill in U.S. history, which led to new designs for oil carriers.

Now called the Oriental Nicety, the vessel was sold for about $16 million, Maryland-based Global Marketing Systems Inc., the world’s biggest cash buyer of ships for demolition, said in a report March 16. Converted into an ore carrier in 2007, it changed owners and names four times since the 1989 accident, American Bureau of Shipping records show.

The spill, which dumped 11 million gallons of oil in Alaska’s Prince William Sound, was the largest in U.S. waters until the 2010 accident at BP Plc (BP/)’s Macondo oil well in the Gulf of Mexico. It’s still the country’s largest leak from a tanker, and it led to the U.S. requirement for ships to have two hulls.

“The accident pointed out that the biggest risk involved in oil transport is the impact an accident can have on the environment,” Thomas Zwick, an analyst at Oslo-based shipping consultant Lorentzen & Stemoco AS, said in an e-mail today. “Large companies can go under as a consequence of the financial liabilities bestowed upon them following an accident.”

Exxon Mobil Corp. (XOM), the largest U.S. oil company, still faces litigation from the spill. The Irving, Texas-based company spent three years and $3.86 billion to clean up the spill, which damaged 700 miles of coastline and killed more than 36,000 birds, according to the Environmental Protection Agency.

Damage Claims

Exxon agreed in 2009 to pay $470 million in interest on a $507.5 million judgment won by local victims, including fishermen and small businesses, in addition to a $900 million civil settlement. Last month, a judge ruled that U.S. and Alaskan governments could pursue further damage claims.

The Oil Pollution Act of 1990 required owners to phase out single-hulled ships. All but 18 of the world’s 560 operating supertankers are now double-hulled, according to data compiled by Bloomberg.

The scrapping of the Oriental Nicety was reported earlier by TradeWinds.

To contact the reporter on this story: Isaac Arnsdorf in London at iarnsdorf@bloomberg.net

To contact the editor responsible for this story: Alaric Nightingale at anightingal1@bloomberg.net

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