Private Empire: ExxonMobil and American Power (2 page)

Prologue

“I’m Going to the White House on This”

A
s the
Exxon Valdez
churned through chalky turquoise port waters toward the Gulf of Alaska, Captain Joseph Hazelwood descended to his quarters. It was shortly after 9:30 p.m. on the evening of March 23, 1989, and he had some paperwork to complete, he told his subordinates. He was a taciturn man, forty-two years old, balding, about six feet and 180 pounds. He dangled the Marlboro cigarette he smoked on the corner of his lips. His father had flown torpedo bombers for the United States Marine Corps in the Western Pacific and then served as an international pilot for Pan American World Airways. Joseph Jr. won admission to the elite State University of New York Maritime College; the carefree notation in his college yearbook read, “It Will Never Happen to Me.” He scored 138 on an I.Q. test. While at sea he read widely; in conversation, he quoted Stonewall Jackson and Oscar Wilde. He had by now sailed for the Exxon Corporation for twenty-one years, ten of those as an oil tanker captain.
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He was attempting to recover that spring from what he would later call a “midlife crisis.” It had taken hold of him several years before. Long stretches at sea had caused him to miss much of his daughter’s childhood, and this weighed on him. His wife, he recalled later, “detected that I was moodier than I had been before.” He drank heavily—four or five doubles before dinner, wine with the meal, then several doubles afterward—but he did not feel immobilized by alcohol. Even after such a drinking regimen, although he could “detect a little clumsiness on my part,” he “didn’t trip over any furniture” and he “wasn’t blotto,” as he put it. While ashore, he periodically drove while intoxicated, attracted the attention of police several times, and lost his driver’s license. He sensed that he might be in some sort of descent: “I didn’t know what I was suffering from, if I was suffering from something.” An Exxon supervisor told him, “If you’ve got a problem, take care of it.” In 1985, he had checked himself into a New York hospital and underwent treatment for mild depression and alcohol abuse. Afterward he attended Alcoholics Anonymous meetings but continued periodically to drink. Exxon executives said that they had started to monitor his alcohol intake, prompted by incidents such as one in which the captain was overheard ordering beer over an Exxon ship’s radio, but Hazelwood remained in service as a tanker captain and said he had no indication that he was being monitored by anyone. In the port town of Valdez on the afternoon of March 23 he drank what he would recall as two or three vodkas at the Pipeline Club before passing unexamined through the oil terminal gate and boarding his ship.
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The livelihood Hazelwood put at risk by his drinking was a privileged one; his salary at Exxon was about $180,000 a year, including benefits. He was one among many thousands of Americans whose incomes that spring could be traced in part to the work of a British Petroleum geologic field party that had surveyed Alaska’s Brooks Range, north of the Arctic Circle, in the summer of 1958. The Suez Crisis and turmoil in Iran (the latter partially engineered by the Central Intelligence Agency) had made plain to B.P.’s executives that their oil holdings in the Middle East were politically insecure. Alaska’s storm-swept seas and icy glaciers might look forbidding, but at least they were situated in a nation that welcomed private capital. American government surveys had suggested for years that Alaska’s north was rich with oil and natural gas; B.P. was among the first of the major international oil companies to bear the uncertainties of the harsh climate and invest. By the early 1970s, it had established a large position as a leaseholder on Alaska’s North Slope. Transport was the major obstacle to maximized profits in a region iced over for months at a time. Oilmen had talked for years about wild-eyed schemes to build an overland pipeline from the Arctic to the south, but the project would require money and political alignments that seemed preposterously ambitious. Only another Middle Eastern crisis—the oil embargo of 1973, directed by Arab producers at the United States over its support of Israel—at last spurred construction of the Trans-Alaska Pipeline System to carry crude eight hundred miles from Prudhoe Bay across permafrost to the ice-free port of Valdez. To finance and operate the pipeline, B.P. formed a consortium with Exxon’s precursor Humble Oil and with Atlantic Richfield. The first oil flowed in June and reached the Valdez Marine Terminal on July 28, 1977.
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A dozen years later, it poured through Valdez at a rate of about 2 million barrels per day—an amount equal to more than a quarter of all of America’s domestic crude oil production. The Valdez terminal had grown into a labyrinth of pipes, oval storage tanks, and strings of festive-looking white safety lights—an improbable man-made installation tucked on a rise amid snow-draped mountain crags and majestic glaciers. Tankers as long as several football fields passed to and from the docks one after another. The Coast Guard funneled them through a ten-mile-wide shipping lane in Prince William Sound, an inland sea teeming with salmon, halibut, whales, seals, sea lions, porpoises, and sea otters. Inbound traffic traveled in a corridor to the east, outbound traffic to the west. That Thursday, the
Brooklyn
and the
ARCO Juneau
had departed Valdez for the Pacific only hours before Hazelwood embarked with a load of 1,264,155 barrels of crude. It was a misty night, but the winds were light, the seas were calm, and visibility extended eight miles. Hazelwood had navigated this passage at least a hundred times before.
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He returned to the
bridge shortly after 11 p.m. His Valdez port pilot had disembarked, and a tugboat escort had also peeled away. Bligh Island now lay ahead to the southeast, shaped in the water like a sleeping crocodile with a curling snout. To the island’s west a red light pulsed every four seconds to mark Bligh Reef, which spread beneath the surface at between one quarter and nine fathoms. (The draft of a loaded oil tanker could be ten fathoms or more.) White icebergs from the Columbia Glacier bobbed ahead as well, visible to eye and radar, and several of them now appeared to block the outbound shipping lane. Hazelwood decided on a common maneuver, one taken earlier without incident by the two ships ahead of him. The
Exxon Valdez
would turn south across the inbound shipping lane toward Busby Island, near Bligh, evade the ice, and then turn back to the outbound corridor toward the Hinchinbrook Entrance and the open sea. The captain radioed the Coast Guard’s Vessel Traffic Service to secure permission. “Judging by our radar, I will probably divert . . . and end up in the inbound lane if there’s no conflicting traffic—over,” he announced.
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The Coast Guard’s monitors did not question him. One of the men on duty was on a coffee break. In any event, it was not as if he or anyone else in the Coast Guard could easily track the
Exxon Valdez
’s movements once it reached the vicinity of Bligh. Budget cuts during the 1980s had left the Vessel Traffic Service without a radar system that could follow ships reliably once they moved thirty or more miles south of Valdez. Even if the Coast Guard had possessed such radar, it might not have mattered; blood tests administered later to the two men on duty showed traces of marijuana and alcohol.
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Regulators and the regulated had fallen into a slothful embrace, reflecting a national political atmosphere that emphasized the benefits of light government oversight. There was intense pressure to reduce costs within the oil industry. A decade of operations around Valdez had passed free of major accidents.

On the bridge, Hazelwood told Gregory Cousins, his third mate, “Bring it down to abeam of Busby and then cut back to the lanes.”

Cousins was an experienced sailor who had made the passage through Prince William more than two dozen times, but he was not legally qualified to take control of the ship in these waters.

“Do you feel comfortable with what we are going to do?” Hazelwood asked him.

“Yes.”

“Do you feel good enough that I can go below and get some paperwork out of the way?”

“I feel quite comfortable.”
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At 11:50 p.m., Hazelwood left the bridge again for his quarters. Like the drinks he had downed less than four hours before boarding the ship, this decision was a violation of Exxon Shipping Company policy. He said later that he left “because there wasn’t a compelling reason to stay.”
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What occurred on the bridge in the minutes that followed would never be fully explained. Cousins, helmsman Robert Kagan, and other crew members became confused, attempted to turn the ship as their charts instructed, made technical mistakes, and soon lost track of their position altogether. At last Cousins telephoned Hazelwood: “I think we’re in serious trouble.”
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A terrible shock and sound engulfed them around ten minutes after midnight. Cousins felt a series of sharp jolts, heard some of the ship’s relief valves open, and smelled oil. The ship’s chief mate, James Kunkel, banged on a crew member’s door to wake him: “Vessel aground. We’re fucked.” Bligh Reef had cut open the ship’s belly across its length. Oil pools surfaced on the dark sea.

Hazelwood raced upstairs. He saw two officers peering overboard at the gushing oil, its roiling blackness illuminated by a spotlight. He retreated to a toilet and vomited. He found that he had trouble catching his breath; he felt that he had “been hit in the breadbasket with a ten-pound maul.” He knew that “the world as I’d known it had come to an end.”

About eighteen minutes after the first sounds of steel on rock echoed through his ship, Hazelwood radioed the Coast Guard. “We’ve—should be on your radar there,” he said. “We fetched up hard aground north of Goose Island off Bligh Reef. Evidently we’re leaking some oil and we’re going to be here for a while.”
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T
he watch stander in Valdez telephoned the Coast Guard’s commander, Steve McCall. “I’ve got the
Exxon Valdez
hard aground Bligh Reef.”

“Are you serious?”

“I’m serious as a heart attack.”

Just over thirty minutes later McCall pulled off the Valdez dock in a fast boat with two other Coast Guard officers, a representative of the state Department of Environmental Conservation, and two local pilots. The night had turned crisp and clear, and when they reached the
Exxon Valdez,
“you could see oil bubbling out from underneath,” recalled Mark Delozier, one of the Coast Guard officers aboard. As the oil surfaced it “made a gurgling noise and big bloops would leap right out of the water two to four feet. Then it would settle down to the surface.” The slick around the ship was already twelve to eighteen inches thick.

They boarded and approached Hazelwood. “How did this happen?”

“You’re looking at it.”

Delozier stepped back and pulled a colleague into a huddle. “Did you smell what I smelled?”

“Yeah.”

“We need to get someone out here to do an alcohol test on the captain as well as the crew.”
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In the days ahead Hazelwood’s intoxication would simplify perceptions of the accident. It provided Exxon a means to narrow its responsibility. The corporation soon dispatched a telegram to its tanker captain informing him that he had been fired. (Hazelwood later testified that he learned of his dismissal only through media reports.) For late-night comedians the drunk-driving imagery proved irresistible. Hazelwood’s number-one excuse, according to a David Letterman Top Ten list: “I was just trying to scrape some ice off the reef for my margarita.” It did not take long for government investigators to discover, however, that the grounding had been caused by a more complex chain of human error, abetted by inadequate regulations and corporate safety systems.

When Steve Cowper, the governor of Alaska, arrived on the scene the next afternoon, one of his colleagues told him that Hazelwood “may have been drinking but I’m not sure that had anything to do with it.” A Coast Guard study would soon conclude that the service’s own multiple deficiencies contributed significantly, along with a pattern of expediency within the oil and shipping industries: “The game rules now are for a professional investor to move freely within the marketplace spending as little as is necessary. Today’s adage is to do more with less, make two tankers do the work done by three previously.”

That had certainly been the adage at Exxon in the years before the wreck. In 1982, the corporation employed 182,000 people. Unexpectedly, oil prices dropped. In response, chief executive Lawrence G. Rawl advanced a slashing campaign begun by his predecessor, Clifton C. Garvin Jr. The campaign eliminated about 80,000 jobs by 1989—more than 40 percent of the workforce in just seven years. At Exxon’s headquarters in a white skyscraper on Sixth Avenue in New York City, employment fell from 1,362 to 330. The corporation’s top environmental officer at headquarters was demoted; his staff was reorganized and absorbed by a research group. The experts in oil spill response that wrote Exxon’s manual for disaster management also lost their jobs. The cuts buoyed Exxon’s financial performance at a time when competitors struggled. In 1987, Exxon reported more annual profit per employee than any other major American corporation.

The National Transportation Safety Board concluded that third mate Cousins and his shipmates were overworked and that cutbacks of the number of crew assigned to Exxon tankers had compromised the ship’s ability to detect potential hazards. The N.T.S.B. cast blame not only on Exxon Shipping, but also on the state of Alaska, the Coast Guard, and the performance of the individuals aboard, including the captain. Hazelwood’s decision to leave the bridge was a factor in the accident, and his drinking may have contributed to that decision, but the failings that led the
Exxon Valdez
onto the rocks ran deeper than his own.
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