Exxon Valdez Oil Spill Trust fetches up hard aground, ignoring plan to preserve $150 million

It was on March 24, 1989 that the Coast Guard traffic center recorded the immortal words from the bridge of the Exxon Valdez: “We’ve fetched up, ah, hard aground, north of Goose Island, off Bligh Reef and, ah, evidently leaking some oil and we’re gonna be here for a while and, ah, if you want, ah, so you’re notified.”

Here we are in 2021 and you are so notified that the Exxon Valdez Oil Trust still exists, holding about $150 million, but the state and federal officials directing its future have fetched up hard aground—spending an inordinate amount of money on administrative expenses and concluding that the best thing to do now is to spend the money as quickly as possible.

A federal-state “Trustee Council” manages the fund and has made grants for research, monitoring, habitat restoration and protection, operating to a large degree in obscurity.

The Trustee Council said an annual public meeting requirement was too onerous and, after giving some thought to requiring a meeting once every 10 years, it settled on having a public meeting once every five years. There may be no need for a meeting in five years if the council succeeds in spending it down.

In January, the council refused to consider treating the fund as an endowment that could create long-term benefits and maximize benefits to the region damaged by the spill. Separate endowments would be set up and managed by the Alaska Community Foundation, which already manages more than $140 million.

The council wants to spend money outside the region affected by the spill and take other steps to spend the money in the short term. One idea under discussion was to use money to buy coal leases from a Korean company with holdings in the Bering River area, which is beyond the area impacted by the oil spill.

The Trustee Council includes three Dunleavy administration commissioners—Jason Brune, Doug Vincent-Lang and Treg Taylor; and three federal appointees—Jim Balsiger, David Schmid, and Sara Taylor.

In January, the board rejected the advice contained in a 2020 report prepared by a cross-section of Alaskans with expertise in government, public policy, fishing, business and science, “New Vision for EVOS: A roadmap to reshape the Exxon Valdez Oil Spill Trust.”

The Think Tank that created the report should not have been brushed off so easily—Sheri Buretta, Shauna Hegna, Mead Treadwell, Diane Kaplan, Marilyn Leland, Molly McCammon, Phil Mundy, Ann Rothe and Fran Ulmer.

The trust fund began with a $900 million settlement of state and federal lawsuits related to the Exxon disaster in Prince William Sound.

“A major reason for extending the Trust is that communities affected most by the spill believe the Trust has failed to accomplish restoration as required, especially of the Native villages who have received little direct benefit from the Trust,” one of the Think Tank proponents said. “The regional Native corps, tribal governments and city governments (Cordova and Kodiak) were unanimously opposed to the Trustee decision to set in motion a spend down without significant consultation with the effected communities.”

Public comments to the council were largely against its plan to eliminate the annual meeting, against two other resolutions and in support of a single resolution.

One of the key findings of the Think Tank is that far too much has been spent on administering the trust.

“Administration of the Trust Fund is absorbing almost a majority of the funds expended for research, restoration and habitat acquisition. Of every dollar spent, 46 cents goes to pay administrative costs for the Trustee Council, state and federal agencies, and contractors,” the Think Tank concluded.

A council auditor disputed that conclusion and claimed that the Think Tank plan would not be more efficient. The Think Tank said the auditor’s analysis was flawed.

By creating endowments, the Think Tank plan would allow money to be spent in perpetuity, rather than as soon as possible. Others have argued that the fund should remain a government responsibility and not one turned over to a private foundation. The Alaska Community Foundation is a public foundation.

The disparity between these claims and conflicting visions is great enough that the subject warrants an independent review. It is clear that the current operation is far from ideal—ending annual meetings, making the process less transparent and failing to take steps to maximize the benefits for the long term are not in the public interest.

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