True cost of Exxon Valdez oil spill may reach $15 billion Secret estimate of cost contrasts sharply with $1.1 billion settlement of last week.

October 08, 1991|By Los Angeles Times

Unpublished studies by state and federal researchers contend that the true cost of environmental damage from the Exxon Valdez oil spill could be as high as $15 billion, according to experts familiar with the secret reports.

The figure stands in dramatic contrast to the $1.125 billion settlement that Exxon Corp. agreed to last week to settle criminal and civil complaints brought by the state of Alaska and the federal government.

Alaska Gov. Walter J. Hickel arrived at the lower amount without consulting the scientists and economists whom taxpayers paid more than $70 million to estimate the 1989 spill's impact.

The researchers' lowest estimate of spill damage -- about $3 billion -- is close to what Exxon says it would lay out in total, between its clean-up spending to date and the proposed settlement.

The studies, conducted by government research teams including two Nobel laureates, are based on a method that has been used for decades in setting government policy.

But their economic modeling technique has never been tested in court, and government lawyers concluded it was too risky to try to defend it in a criminal trial.

U.S. District Judge L. Russel Holland, who has not seen the studies but rejected an earlier settlement as insufficient to deter future spills, begins hearings in Anchorage Tuesday to consider the latest effort to settle charges against the oil company for fouling the water and shores of Prince William Sound.

Meanwhile, scientists, economists and environmentalists familiar with the studies fear that many of them may never become public.

"Everyone is concerned that if the settlement goes through, (the studies) will be deep-sixed," said Erik D. Olson, a senior attorney with the Natural Resources Defense Council in Washington.

Although there also are scientific studies among the government's secret research documents, most closely guarded are the reports that estimate the economic effects of the spill.

Olson and others contend that the economic studies show such high ranges of damage that they are a potential embarrassment to government negotiators eager to avoid a criminal trial focusing on oil-spill damage just as Congress takes up debate over opening the Alaska National Wildlife Refuge to oil exploration.

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