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S. HRG. 111–874 

EXXON VALDEZ TO DEEPWATER HORIZON: 

PROTECTING VICTIMS OF MAJOR OIL SPILLS 

HEARING 

BEFORE THE

COMMITTEE ON THE JUDICIARY 

UNITED STATES SENATE 

ONE HUNDRED ELEVENTH CONGRESS 

SECOND SESSION 

JULY 27, 2010 

Serial No. J–111–102 

Printed for the use of the Committee on the Judiciary 

( 

(II) 

COMMITTEE ON THE JUDICIARY 

PATRICK J. LEAHY, Vermont, Chairman 

HERB KOHL, Wisconsin 

DIANNE FEINSTEIN, California 

RUSSELL D. FEINGOLD, Wisconsin 

ARLEN SPECTER, Pennsylvania 

CHARLES E. SCHUMER, New York 

RICHARD J. DURBIN, Illinois 

BENJAMIN L. CARDIN, Maryland 

SHELDON WHITEHOUSE, Rhode Island 

AMY KLOBUCHAR, Minnesota 

EDWARD E. KAUFMAN, Delaware 

AL FRANKEN, Minnesota 

JEFF SESSIONS, Alabama 

ORRIN G. HATCH, Utah 

CHARLES E. GRASSLEY, Iowa 

JON KYL, Arizona 

LINDSEY GRAHAM, South Carolina 

JOHN CORNYN, Texas 

TOM COBURN, Oklahoma 

BRUCE A. COHEN, Chief Counsel and Staff Director 

BRIAN A. BENZCOWSKI, Republican Staff Director 

(III) 

C O N T E N T S 

STATEMENTS OF COMMITTEE MEMBERS 

Page 

Klobuchar, Hon. Amy, a U.S. Senator from the State of Minnesota ................... 1 

Leahy, Hon. Patrick J., a U.S. Senator from the State of Vermont, prepared 

statement .............................................................................................................. 33 

Sessions, Hon. Jeff, a U.S. Senator from the State of Alabama .......................... 3 

WITNESSES 

Banta, Joe, Project Manager, Prince William Sound Regional Citizens’ Advisory Council, Anchorage, Alaska ........................................................................ 7 

Begich, Hon. Mark, a U.S. Senator from the State of Alaska ............................. 11 

McInerney, Thomas G., retired Lt. General, U.S. Air Force, Clifton, Virginia .. 9 

O’Neill, Brian, Partner, Faegre & Benson LLP, Minneapolis, Minnesota .......... 6 

SUBMISSIONS FOR THE RECORD 

Banta, Joe, Project Manager, Prince William Sound Regional Citizens’ Advisory Council, Anchorage, Alaska, statement ..................................................... 26 

McInerney, Thomas G., retired Lt. General, U.S. Air Force, Clifton, Virginia .. 35 

O’Neill, Brian, Partner, Faegre & Benson LLP, Minneapolis, Minnesota .......... 40 

Primary Recommendation, May 27, 2010, report ................................................. 48 

(1) 

EXXON VALDEZ TO DEEPWATER HORIZON: 

PROTECTING VICTIMS OF MAJOR OIL SPILLS 

TUESDAY, JULY 27, 2010 

U.S. SENATE, 

COMMITTEE ON THE JUDICIARY, 

Washington, D.C. 

The Committee met, pursuant to notice, at 2:40 p.m., in room 

SD–226, Dirksen Senate Office Building, Hon. Amy Klobuchar, presiding. 

Present: Senators Klobuchar, Franken, and Sessions. 

OPENING STATEMENT OF HON. AMY KLOBUCHAR, A U.S. 

SENATOR FROM THE STATE OF MINNESOTA 

Senator KLOBUCHAR. I call the hearing to order. Thank you, everyone, for being here. Good afternoon. 

Tomorrow will mark 100 days from the time the BP oil spill 

began with the tragic explosion on the Deepwater Horizon. Eleven 

men lost their lives, and until recently, oil continued to spill into 

the Gulf of Mexico. 

Unfortunately for our country and for the world, this is not the 

first oil spill that we have seen, and we have got a great panel of 

witnesses here today who are going to help tell us some of the lessons from the last massive oil spill in our country. That would be 

the Exxon Valdez disaster in 1989. 

We will probably have to recess this hearing about 3 p.m., and 

in the meantime, to keep things going, Senator Sessions and I will 

offer our opening remarks, and we will turn to the witnesses for 

testimony. I know Senator Begich, who wants to be here, is presiding over the Senate, and we hope that he will join us at some 

point as well. 

Now, today we are going to be hearing from a group of witnesses 

who are very familiar with the disaster that occurred in Alaska 21 

years ago, and I am hopeful that we will learn from their experiences so we know how to better help the victims of this latest oil 

spill. 

As we all know, on April 20th, tragedy struck in the Gulf of Mexico. An explosion aboard the Deepwater Horizon led to the largest 

oil spill in American history. Three months later, things are finally 

starting to turn a corner in the gulf. Officials are cautiously optimistic that the well has been plugged, and BP scientists believe 

that they may have a permanent fix when they put in the secondary well. 

2 

That day cannot come soon enough. When the oil gusher in the 

gulf is permanently sealed, the first chapter of this environmental 

tragedy will finally come to a close. But it is only the first chapter. 

Right now, the slick from the spill covers approximately 2,500 

square miles. Oil has washed up on shores from Texas to Florida. 

The gulf region’s beaches, marshes, and wildlife are imperiled. We 

have seen the pictures of the oil-soaked pelicans hobbling on the 

beaches, and we have watched as sea turtles and dolphins struggle 

to survive in water that has been polluted by oil. It is frustrating. 

It makes people very angry. It makes all of us very angry. 

The livelihood of countless Americans are also in danger. Businesses that depend on commercial fishing, deepwater drilling, and 

tourism industries are all in jeopardy. And while the Gulf States 

closest to the spill will bear the brunt of the environmental harm, 

the fallout from this kind of environmental disaster goes well beyond the gulf. Ecosystems and economies across the country will 

suffer. 

One example: Minnesota is the home of half a million ducks and 

the largest loon population in the continental United States. Every 

winter, those birds from Minnesota as well as 12.5 million other 

birds, 13 million birds make that long trek from the Midwestern 

States to the marshes along the gulf coast. The oil spill has spread 

to those marshes, and this year, when the migratory birds get to 

the gulf, there is a big risk that they will be ensnared by oil from 

the Deepwater Horizon spill. No one can just hold up a sign that 

says, ‘‘Hey, go to Texas instead.’’ No one can put a big net up, and 

the birds do not really have the kind of instinct that would lead 

them to go somewhere else. 

That is only one example of the many ways this oil spill is going 

to affect the health of entire ecosystems, even outside of the Gulf 

of Mexico. 

History might be our best teacher. Twenty-one years ago, the 

Exxon Valdez oil tanker struck Bligh Reef in Prince William 

Sound, Alaska; 11 million gallons of oil spilled into the ocean. Despite a large-scale cleanup, there are still lingering effects on the 

environment. An estimated 80,000 liters of oil in the form of lumps 

of oil and tar are still said to pollute the coast of Alaska. The 

Exxon Valdez oil spill is ingrained in the memories of many Americans as one of the greatest environmental catastrophes of the 20th 

century. Exxon Valdez stands out in my mind not just as an environmental disaster, but also as a grave injustice. 

A Minneapolis law firm, Faegre & Benson, represented 32,000 

Alaskan fishermen, natives, and cities in their lawsuit against 

Exxon. An Anchorage jury awarded $287 million in actual damages 

and leveled $5 billion in punitive damages against Exxon. In 2008, 

after nearly 20 years of legal wrangling, the Supreme Court reduced the fine to around $500 million. They went from $5 billion 

to $500 million. 

Exxon used every legal trick in the book to prevent the victims 

of the oil spill from getting compensation. After 20 years of court 

fights, 8,000 of the fishermen who sued Exxon died and were never 

paid. Other fishermen received less than they deserved, and they 

got their money 20 years too late. 

3 

While BP’s executives sound outraged and contrite now, who is 

to say that will not change in 2 to 3 years. In the immediate aftermath of Exxon Valdez, Exxon’s top executives were publicly repentant, but once they were behind the courtroom doors, they sang a 

very different tune. 

As David Lebedoff, a Minneapolis attorney and author who wrote 

the book ‘‘Cleaning Up,’’ one of the most definitive books on the 

post-Exxon Valdez litigation, as he put it, ‘‘A company’s public relations goals just after a disaster are very different from its litigation 

needs 5 years later.’’ 

I think we have made some steps in the right direction. BP executives, after meeting with President Obama and after a lot of 

pressure from Congress, agreed to create a $20 billion spill response fund. That is something we did not have in Exxon. Kenneth 

Feinberg will administer the fund, and I believe that Mr. Feinberg 

will work hard to make sure that those funds are distributed quickly and fairly. But the fund is only a first step, not a silver-bullet 

solution. 

I brought this panel together today to discuss how the lessons of 

Exxon Valdez can be applied to the tragedy in the gulf. How was 

Exxon able to keep the oil spill litigation gummed up in the courts 

for two decades? What compensation did victims in the Exxon 

Valdez tragedy get? And what challenges continue to plague their 

communities 21 years later? We need to have a clearer understanding of the financial, biological, sociological problems of the 

Alaskan communities, the ones they still face, in order to better understand the scope of the disaster in the gulf and to ensure that 

BP, not the taxpayers, are paying the bill for years to come. 

Senator Sessions is now going to give his opening statement, and 

then we will hope to get the witness testimony in before the vote 

starts. 

Thank you, Senator Sessions. 

STATEMENT OF HON. JEFF SESSIONS, A U.S. SENATOR FROM 

THE STATE OF ALABAMA 

Senator SESSIONS. Thank you very much. 

This is an important hearing, and it is not easy to deal with the 

losses of this kind of oil spill. I spent Saturday morning with Mr. 

Feinberg, meeting with local people who had suffered financial loss, 

perhaps not direct loss but very, very real loss to their financial 

ability to survive, and maybe it is not in normal terms a direct financial loss, but it is a very real financial loss. I do not envy the 

difficulties he has in deciding who gets paid and who does not, 

where you draw the line, and where you have got to, as a matter 

of equity, compensate people. He insists that he is prepared to pay 

far more than what these individuals would get if they were to go 

to court because for many of them they just would not meet the facial requirements, the elements of a lawsuit and would not be able 

to be compensated. That, as he acknowledges, remains to be seen, 

but that is his view. 

So this is a challenge, and $20 billion is a lot of money to distribute. How you do that fairly and objectively so people do not rip 

off the fund is a challenge? And you have got to determine who is 

4 

in crisis now and needs the money immediately, which is a big 

problem that I believe is occurring on the gulf coast. 

I do not believe this accident should have happened. I believe 

good, tight, tough management and oversight somehow or some 

way would never have allowed this disaster to occur. I am inclined 

to believe—and maybe as time goes by we will learn—that other 

rigs being operated more carefully with more control and more determination would have avoided this. So I am not at all defensive. 

I said within days of the disaster that, as far as I was concerned, 

BP was not too big to fail, that they were going to pay what they 

were obligated to pay, and if they cannot succeed, well, so be it. A 

lot of companies all over America fail every day as a result of actions that they take that get them in financial trouble, and nobody 

bails them out. So I do not think they need to be bailed out. I think 

they need to pay what they are lawfully required to pay. But being 

a person of the law, I think they can be encouraged to go beyond 

strict rules of law, but at some point every corporation is entitled 

to the protection of the law. 

I think the Exxon Valdez situation is a good learning point. I do 

believe the Oil Pollution Act that arose out of that has proven in 

many ways to be helpful to us today. We have seen some things, 

I think, that need to be changed in it, but it is a lot better than 

not having it, I believe at this point. Those who in reaction to that 

spill passed the Oil Pollution Act I think did some good work, and 

there is nothing wrong with us in reaction to this circumstance figuring out how to improve the act. 

We want to be sure that we do not eliminate 200,000 jobs and 

eliminate the economic benefit that we get from offshore oil and 

gas production through whatever it is that we decide to do about 

this. That worries me. A lot of people are not as attuned to it, I 

think, as I am. Having been involved in studying the economics of 

it for a number of years, it is a big, big deal for America. 

So I think we need to see how we can proceed. Can we create 

a circumstance that puts great pressure on the responsible party? 

They have to be deeply financially committed to the safety of the 

rig. And maybe also we can create some pressure on the entire industry to support one another in ensuring that there is safety in 

oil drilling. 

I was impressed that Exxon, Chevron, Conoco, and Shell have 

come together with building permanent response equipment the 

likes of which just now is being successful after 90 days. They are 

going to start now to spend $1 billion to develop a more effective 

capping procedure, which should have been done before, in my 

opinion. One of the great disappointments I have had about the oil 

industry is that though they have assured us repeatedly that they 

had everything under control, I have been disappointed they did 

not have this kind of equipment ready, because even though the 

chances for such a blowout were small, it was always possible. It 

would have been a few pennies in the scheme of the overall size 

of this industry to have had equipment sitting on the dock ready 

to respond within hours of this disaster. 

So, Madam Chairman, thank you for hosting the hearing. I look 

forward to hearing our witnesses and wrestling effectively with 

5 

how to compensate victims and how to create a legal process that 

is fair and just. 

Senator KLOBUCHAR. Well, thank you very much, Senator Sessions. Thank you for your words of willingness to look at this bill 

and make some improvements and changes to the existing law. I 

really appreciate that. 

I think we will swear in our witnesses now. Do you affirm that 

the testimony you are about to give before the Committee will be 

the truth, the whole truth, and nothing but the truth, so help you 

God? 

Mr. O’NEILL. I do. 

Mr. BANTA. I do. 

General MCINERNEY. I do. 

Senator KLOBUCHAR. Thank you. So let me introduce all three 

witnesses at once. 

First we have Brian O’Neill. He is a friend and colleague from 

Minnesota. He has extensive experience in oil spill litigation, and 

he has dedicated a large part of professional career—probably larger than he imagined when he first started doing this that it would 

last 20-some years—but a large part of his professional career 

fighting on behalf of the victims in the Exxon Valdez oil spill. He 

was the lead trial counsel for the 32,000 fishermen, natives, and 

cities in the Exxon Valdez litigation, and in 1994, the National Law 

Journal named him one of the Ten Best Lawyers in America for his 

work in Alaska. He graduated from the U.S. Military Academy at 

West Point and the University of Michigan Law School. He is a 

partner in the litigation group at Faegre & Benson, which is a law 

firm headquartered in Minneapolis, Minnesota. 

I know Senator Franken is here, and I do not know if you want 

to add a few words for hometown lawyer who is appearing before 

our Committee. 

Senator FRANKEN. Well, we are very proud. Thank you, Madam 

Chair, and we are very proud of you, Mr. O’Neill, for the work you 

did on the Exxon Valdez case and look forward to your testimony. 

We met this morning and a pretty harrowing story about what 

happened to the folks that you represented, how long this took, 

how such a high percentage of them died before seeing any money 

or restitution. And we just have an interest that the people who 

have been victimized in so many different ways by this oil spill in 

the gulf are not victimized twice, and I look forward to your testimony. Thank you for being here, as I thank all the witnesses. 

Senator KLOBUCHAR. I also note that your son is there behind 

you. Is that right? So ready in case you need representation. All 

right. Good. 

We will also hear from Joe Banta, who has flown all the way 

from Alaska. Senator Sessions, he took the red-eye—so I guess we 

should be nice to him—to be here with us. Joe grew up in Cordova 

in a commercial fishing family and was fishing in Prince William 

Sound by the age of 10. He was a herring fisherman before the 

Exxon Valdez oil spill and now is a project manager with the 

Prince William Sound Regional Citizens’ Advisory Council, which 

focuses on oil spill prevention and response. Thank you for being 

here, Mr. Banta. 

6 

Finally, we will hear from Lieutenant General Thomas 

McInerney of the United States Air Force. He currently runs his 

own consulting firm, Government Reform Through Technology, 

GRTT, since retiring from the military. However, 21 years ago, he 

was in charge of the Alaskan Air Command and basically coordinated the Department of Defense’s efforts on the oil spill cleanup 

during the time of the Exxon oil spill. He also graduated from West 

Point—wow, you are surrounded, Mr. Banta—and has a master’s 

degree in international relations from George Washington University, and we are glad to hear his unique perspective today. 

We will start with Mr. O’Neill. 

STATEMENT OF BRIAN O’NEILL, PARTNER, FAEGRE & BENSON 

LLP, MINNEAPOLIS, MINNESOTA 

Mr. O’NEILL. Thank you, Senator. I spent the last 21 years of my 

life working on a drunk-driving case, and I have some observations 

as a result of that endeavor. 

In 1994, I did try for half a year the punitive damage case 

against Exxon, and leading up to that, we took testimony from over 

1,000 people. We looked at 10 million documents, and since the 

trial, we have argued over 20 appeals and tried to distribute recoveries to fishermen and natives, and we have recovered about $1.3 

billion during that period of time. 

A fisherman is essentially a significant small business and may 

have as much as $1 million in capital invested in his business. But 

the capital is illiquid in that it is in the form of boats and fishing 

permits. And when a fisherman cannot fish, he cannot feed his 

family, he cannot make his boat payments; and if it is a fishery 

that has permits, it cannot make fishery permit payments. So if 

there is an oil spill, a fisherman has immediately a need for an infusion of cash to last through the year so he does not go into bankruptcy. 

Now, at some time later, he also needs the opportunity for a full 

assessment as to what his damages are because oil spills are very 

unpredictable. 

In the early 1970s, the citizens of Cordova objected to the TransAlaska Pipeline, and they did so because they predicted—and they 

predicted to Senate Committees—that if you allow the transport of 

oil through Prince William Sound, there would be a catastrophic 

spill, and it would destroy the fishery. And in 1989, that prediction 

came true, and the Valdez ran aground, and there was a massive 

amount of litigation that ensued. 

The litigation with the Government was criminal and civil, and 

after 2 years into the litigation, both the State of Alaska and the 

Federal Government settled early. And when the settlement was 

approved, they explained to the district court judge in Anchorage 

that they were settling relatively inexpensively-$900 million for the 

civil damages to natural resources and $100 million in restitution 

under the criminal laws. They were settling rather cheaply because 

they needed the money immediately for remediation in the sound; 

and, two—and it was a stated reason—they did not feel that they 

could litigate against Exxon Corporation effectively over a number 

of years because of financial reasons and, again, the need for 

money. 

7 

Our case was the civil case, and we did go to war with Exxon. 

And as everyone knows, we were at war with them for 21 years, 

and we estimate that they spent in defense of our case $400 million. 

We learned some things. One of the things we learned was that 

part of the extraction of oil and the transportation of oil is going 

to be spills. Some spills are inevitable, and so you better have a 

system in place to deal with those hurt by the spill. It makes sound 

economics and it makes sound justice to have people hurt by an oil 

spill fully compensated and have the price of their hurt reflected 

in the price of oil at the pump. 

We also learned that maritime law, old-fashioned maritime law, 

was ill-equipped to take care of victims of a spill, and OPA 90 tried 

to address that, and it made some steps forward. But somebody 

needs to take a look at OPA 90 so that we know who gets paid and 

for what they get paid, because both in the Valdez case and I think 

today, there is a great deal of uncertainty about what the proximate cause doctrines are with regard to oil spills. 

A hotel with oil on its beach can recover. The hotel next door 

that has no oil on its beach, who knows? The hotel across the 

street, again, who knows? So fishers in part are protected, but they 

are not fully protected, and area businesses are—it is unclear. 

Oil spills drastically impact the financial lives of fishermen, but 

they also destroy communities. An oil spill, unlike a natural disaster, results in a city like Cordova, Alaska, or a gulf city in higher 

suicide rates, depression, divorces, bankruptcies, people getting behind on their taxes. So as you look at this whole thing, people do 

have to be made whole financially, but remember, when you make 

them whole financially, you are helping to make their communities 

whole and in many cases helping to make their communities survive 

That is my 5 minutes. 

[The prepared statement of Mr. O’Neill follows:] 

Senator KLOBUCHAR. Thank you. That was very helpful. 

Mr. Banta. 

STATEMENT OF JOE BANTA, PROJECT MANAGER, PRINCE 

WILLIAM SOUND REGIONAL CITIZENS’ ADVISORY COUNCIL, 

ANCHORAGE, ALASKA 

Mr. BANTA. Thank you, Madam Chair. I appreciate the opportunity to come before the Committee and provide you with information about the profound impact that the Exxon Valdez oil spill had 

on me, my family, and my hometown, a small rural fishing town 

in Prince William Sound. 

I grew up in that town in a commercial fishing family. I began 

fishing at the age of 10. I was a third-generation fisherman. My 

Grandpa Bob came up to Alaska after World War I, drawn by the 

lure of a fishery. 

In 1989, at the time of the spill, I was preparing for the herring 

fishery in Prince William Sound. Unfortunately, within a few 

weeks, I instead was doing wildlife rescue, a very tragic situation, 

sad and frustrating, and I will leave it at that. 

The following year there were significant biological effects starting to show. Herring showed signs of stress, lesions from viral and 

8 

fungal infections. Within a few years, the fishery was closed entirely because the previously robust biomass of 150,000 tons of herring had been reduced by an order of magnitude down to 15,000 

to 20,000 tons. The herring fisheries in the Sound have been closed 

for 15 of the 21 years since the spill. This was an immense impact 

biologically as well as financially. The herring that were the basic 

part of the food chain, sea birds, whales, seals, sea lions, other fish 

fed upon, was all quite almost literally gone. 

There were also significant financial impacts from the loss of the 

herring fisheries that were multi-generational and multi-layered in 

effect from individuals up to entire communities. It rippled through 

all businesses like grocery stores, net mending, on up the chain. 

Those herring fisheries, again, are gone. My father’s fishery is 

gone. My friends’ fisheries are gone. Mine is gone. My permit, valued at $100,000, is now worth nothing. That income has evaporated from that fishery permanently. My sons, Wade, Tore, and 

Jonas, will no longer have the opportunity to participate in this 

unique Alaskan way of life, not unlike people that ranch or farm 

and make their living off the land. 

So 21 years after the spill, here we are and there is no indication 

that this way of life is ever coming back. My family no longer fishes 

commercially in any way at all. 

So the class action lawsuit ended in 1994, we have heard, before 

the herring fishery had entirely ended, though, so we were compensated only for the initial years of those financial losses, and not 

for the following past two decades. So the families and the fishermen have not been compensated for that loss with the end result 

being a significant uncompensated loss for each and every one of 

the people involved in the herring fishery. 

Twenty-one years out, and the financial compensation, modest, 

that has been awarded from the lawsuit still has not had its final 

payments made. We are actually still waiting for final payments. 

A sociologist actually came up with a term he called ‘‘litigation 

stress’’ to define what goes on and the stresses that were added 

just by the litigation itself, not to mention the other stresses on up 

to suicide that we have dealt with. 

In reality, this has only been compounded by the manner in 

which the Supreme Court intervened really at the end of the whole 

process and used this old maritime commercial law from the 1800s, 

essentially developed to deal with pirates to cut our jury award 

down to one-tenth the original what our peers had awarded us. 

You have heard it before, and I am going to say it again. You 

should know that in the 21 years since the spill, a third of the 

32,000 plaintiffs have passed away prior to the litigation’s final settlement and payment. That is a third. So in this instance, justice 

delayed is truly justice denied. 

Communities themselves lost money that had gone directly into 

the city’s tax coffers from a raw fish tax gathered by the communities for herring processed in or near the area. I have been told 

that my hometown of Cordova lost approximately $20,000,000 over 

the last few years in raw fish tax revenue specifically into their coffers. 

This year, in May, I was invited to travel to the gulf coast by 

folks down there, and I had the opportunity to meet with residents 

9 

and share lessons learned from the Exxon Valdez oil spill that my 

organization, the Prince William Sound Regional Citizens’ Advisory 

Council, has developed. Our hearts sure go out to the people down 

there affected by that massive spill. We can definitely relate to 

that, unfortunately. 

So these ‘‘Lessons Learned’’ documents that we brought down for 

folks down there, developed by my organization, I think are a valuable resource for them and for the Committee, and I will leave you 

these copies. 

Thank you. 

[The prepared statement of Mr. Banta appears as a submission 

for the record.] 

Senator KLOBUCHAR. Well, thank you very much. I appreciate 

that, Mr. Banta. Also we can put those on the record if you would 

like to. 

Mr. BANTA. Okay. 

Senator KLOBUCHAR. All right. We will do that. Thank you. 

Lieutenant General. 

STATEMENT OF THOMAS G. MCINERNEY, LT. GEN. USAF (RET), 

CLIFTON, VIRGINIA 

General MCINERNEY. Madam Chairman and members of the Senate Committee on the Judiciary, it is a privilege to appear before 

you today and testify about DOD lessons learned as the DOD coordinated during the Exxon Valdez oil spill from 24 March to 15 

September 1989 in Prince William Sound while I was the commander of Alaskan Command. My comments of lessons learned 

hopefully will impact how we protect victims of current and future 

major oil spills. 

The U.S. Government has reorganized significantly with the creation of the Department of Homeland Security and the creation of 

Northern Command within DOD. These changes are all positive 

with respect to my comments today. 

A quick refresh for the Committee on the DOD assets provided 

may be useful. Our initial support was an improvised commandand-control system called OASIS that provided the on-scene Coast 

Guard coordinator, Vice Admiral Clyde Robbins, and the Exxon coordinator with the visual digital map display of the oil spill location, beaches, and other oil-covered areas, sensitive environment 

and wildlife areas. In addition, the U.S. Navy provided two amphibious ships for use as boatels to house the 11,000 workers who 

eventually worked in the area until Exxon could provide specially 

constructed barges to house them. 

What we did not provide was manpower to clean up the beaches, 

which became a very contentious issue with Senators Stevens and 

Murkowski who felt the 6th ID should help. I was strongly opposed 

when President Bush made the final decision with support from 

Secretary of Defense Cheney to not use soldiers for the cleanup operations. Instead, Exxon hired local workers—the unemployment at 

that time was 8 percent in Alaska—which proved to be very successful and I believe a precedent for future cleanup operations. The 

military should not do what the private sector can do equally as 

well or better. I sense that this has not been the guidance in the 

gulf today. 

10 

I will now outline what I think were the most important lessons 

learned for the military support to protect victims to oil spill cleanup operations on this experience. DOD should be part of any initial 

task force established by DHS, States, local counties, and the oil 

company responsible. Rapid formation is critical to success. A joint 

force commander should be assigned to support the on-scene Coast 

Guard coordinator immediately. He and his staff should have the 

knowledge to provide systems and technology appropriate to support him such as imagery from satellites or unmanned aerial vehicles or manned aerial reconnaissance surveillance such as the U– 

2 with its unique spectral imagery. 

These new technologies should be immediately deployed to give 

the national command authorities and all appropriate agencies involved the situational awareness that will enable swift identification of common cleanup objectives. I cannot emphasize this enough. 

The dominant responsibility of the oil companies versus the U.S. 

Government was established for cleanup. I am troubled by the moratorium on continued drilling in the gulf as it runs counter to the 

guidance we used in Prince William Sound in keeping the tankers 

flowing out of Prince William Sound. Continued safe oil production 

operations are vital to our National security. 

I mentioned earlier the OASIS command-and-control system was 

immediately established for cleanup operations. This was adapted 

from my joint command-and-control system and gave all players an 

excellent tool, such as the Secretary of Transportation Sam Skinner, Coast Guard Commandant Admiral Yost, near-real-time 

knowledge on how operations were going from their offices in 

Washington. Everybody knew where the primary slicks were, what 

beaches and sensitive areas were fouled with oil, how many ships 

and crews were working the beaches, et cetera. 

This was of great value for all, especially the Exxon on-scene 

commander, along with his Coast Guard counterpart. However, 

once the Exxon lawyers discovered that Exxon was funding this 

near-real-time information, they terminated this valuable tool for 

fear that the U.S. Government would have too much information 

for later legal battles. We should not have let this happen, but this 

advanced command-and-control capability was not well understood 

at the time. There were too many other windmills to attack. 

With reference to the current oil spill in the gulf and the relevancy of the Exxon Valdez experience, I would only say the laws 

and protocols were changed and are in force today which has enabled Secretary Napolitano and Admiral Allen to work very effectively with British Petroleum. I would suggest that we have not 

used all our latest imagery assets, such as UAVs like Global Hawk 

and U–2 aircraft. I would do a test immediately to demonstrate the 

value of continuous digital radar, infrared, and electro-optical displays that will show the coordinators the exact positioning of the 

oil slicks, location of the over 1,000 ships supporting them, fouled 

beaches and sensitive areas, et cetera. This real-time digital picture 

will be of immense value to protect the victims in future crises like 

this. I believe it should be considered for use by the DHS in all future disaster areas. 

In summary, Madam Chairman, I believe many of the lessons 

learned from DOD’s experience in the Exxon Valdez disaster have 

11 

been incorporated in the gulf today with the exception of near-realtime imagery for command and control from modern UAVs and the 

moratorium on oil production, which has been very deleterious to 

our National security. 

Thank you. 

[The prepared statement of General McInerney appears as a submission for the record.] 

Senator KLOBUCHAR. Thank you very much, and thank you to all 

three of you. I know Senator Begich is on his way, but I am going 

to get started with a few questions, and when he comes, we will 

have him speak and officially introduce you, Mr. Banta. 

I wanted to talk just a minute about the Exxon Valdez litigation, 

Mr. O’Neill, and I know that the jury awarded the plaintiffs $287 

million as well as $5 billion in punitives. That was in 1994. Fourteen years of appellate litigation followed. It was then reduced to 

$500 million. It is just hard for me to believe these 8,000—is this 

true that 8,000 fishermen actually died before they were able to 

even get their award? 

Mr. O’NEILL. The statement is correct. Most of the fishermen at 

the time could have been anywhere from 18 years old to 70 years 

old, so just actuarially you lose an awful lot of people over 21 years. 

So these people did not get to see their justice, and their families 

sit there now knowing that they did not get to see their justice. 

And it hurts institutions—in this case, the court system—to have 

a process like that that goes on for 21 years. It is a nightmare for 

Cordovans. It is a nightmare for all the people in Alaska. 

Senator KLOBUCHAR. So I take it you are glad that we were able 

to get at least $20 billion in the fund up front BP. 

Mr. O’NEILL. I think the $20 billion that BP has agreed to administer is a huge, huge step forward. I have a couple of concerns 

about it, but that is real money, and it is a lot of real money. It 

takes care of the cap in OPA 90, and if it is run well, it will provide 

fishermen and other area business owners with immediate money 

so that you will not run into questions like bankruptcy. And if it 

is run well, in the end people will be fully compensated. 

Senator KLOBUCHAR. Very good. 

We have been joined by Senator Begich, and I am going to let 

you go. I know not all new Members of the Senate get that kind 

of deference, but only when you have a new Member of the Senate 

chairing the Committee do you get that. So I am going to have him 

speak for a little bit. Mr. Banta did a great job in his opening statement, Senator Begich, and he came on a red-eye to join us, so we 

are very impressed with that. And I know you wanted to say a few 

words about him and the subject, so thank you. 

STATEMENT OF HON. MARK BEGICH, A U.S. SENATOR FROM 

THE STATE OF ALASKA 

Senator BEGICH. Madam Chair, thank you very much, and I 

know you know our votes have been delayed for about 15 minutes, 

so there is some more discussion on the floor. You have a Committee here. I have another Committee to go to. But I want to commend you for devoting your efforts to this important topic of protecting victims of oil spills. 

12 

As you know, Alaska has lived through the worst oil spill in our 

Nation’s history until the Deepwater Horizon spill a few months 

ago. From the Easter weekend of 1989, when the supertanker ran 

aground on a well-marked reef, to the insulting Supreme Court decision last year, the Exxon Valdez disaster has been a nightmare 

for thousands of Alaskans. Eleven million gallons, enough oil to 

stretch from Cape Cod to North Carolina’s Outer Banks, gushed 

into one of Alaska’s most spectacular and sensitive areas. For 

months, night after night on the national news, the world was 

gripped by images of pristine shorelines awash in oil, birds and sea 

otters blackened to death. 

Now, 21 years later, scars to Alaska’s environment and Alaska’s 

people remain. Thousands of Alaskans, sadly fewer and fewer each 

year, were only recently compensated for damage. Their livelihoods 

and ways of life are forever different. 

As we assess the lessons learned two decades later, one truth 

rises above all others. We must be committed to paying the price 

of vigilance because the price of complacency is too high. That is 

why I commend your Committee’s initiative today to ensure that 

the victims of the Deepwater Horizon do not suffer many of the 

same injustices experienced by Alaskans. 

Madam Chair, you have an excellent witness in front of you, Joe 

Banta, who I know, as you said, already testified, to help guide you 

through your process. Joe grew up in an Alaskan fishing family, at 

the age of 10 began fishing the waters of Prince William Sound, 

which were affected by the Exxon Valdez. At the time of the spill, 

Joe was getting ready to fish the spring herring fishery. But when 

the Exxon Valdez ran aground, he joined the wildlife rescue crews 

to help care for the oiled birds and animals. 

For more than 20 years, Joe has worked for the Prince William 

Sound Regional Citizens’ Advisory Council, which was created in 

the aftermath of the spill to give citizens more of a voice in development decisions. The RCAC has become a model for other parts 

of the Nation, including the gulf, and I have to tell you, Madam 

Chair, there is—people wonder how these committees operate. I 

know Joe probably has told you, but they are very, very independent. They speak their mind. When they see the industry not 

doing what they need to be doing, they speak up. 

You will find Joe is a leading expert in oil spill recovery. By that, 

I just do not mean the science of picking up spilled oil, but how 

to deal with the social, psychological, and economic impacts of a 

giant oil spill. 

Madam Chair, thank you very much for the opportunity to say 

a few words, and thank you for having Joe here. Alaska is better 

off because of these commissions and how they work and the citizens that are engaged in them, not just for a short period of time 

but for a long period of time, proven by Joe’s service. 

Thank you, Madam Chair. 

[The prepared statement of Senator Begich appears as a submission for the record.] 

Senator KLOBUCHAR. Well, thank you very much, Senator Begich, 

and I think the characterization of Joe that you gave as someone 

who is independent and speaks his mind would also apply to you, 

Senator Begich. So thank you for being here. I was just asking Mr. 

13 

O’Neill about some of the issues coming out of the actual litigation 

with the delays in time for the fishermen, the 8,000 people, fishermen, who actually died without getting their damages when they 

were alive. 

And then I know one other things you mentioned, Mr. O’Neill, 

was just your frustration with the Government settling so quickly 

after 2 years where they fully—Alaska and the United States saying that they did not have the money to pursue the litigation. So 

I wanted to ask you about that, what you think they could have 

done better, and how that applies to today’s situation, as well as 

you also mentioned that the settlement with Exxon had a re-opener 

clause in it for future damages up to $100 million, but all this 

clause did, in your words, was create more litigation. 

Is there a way to make sure clauses are ironclad and a way to 

ensure that future harms, like the later damage we found to herring and other fish that people did not expect, could be accounted 

for? That is a two-part question: first about the Government settling earlier, and then the re-opener clause. 

Senator BEGICH. If I could interrupt, Madam Chair, if I can be 

excused, only because two amendments that are waiting for markup outside the floor are about RCACs and making sure they 

are—— 

Senator KLOBUCHAR. Well, we want you to do your job instead 

of just talking about it. 

Senator BEGICH. Thank you very much 

Senator KLOBUCHAR. Thank you. 

Mr. O’NEILL. Inherent in an oil spill is the fact that once the oil is spilled, you really cannot clean it up. Exxon spent $2 billion to 

clean up 8 percent. You do not know where it is going to go. You 

do not know how long it is going to be there. And, last, you do not 

know what creatures or ecosystems it hurts. Salmon can swim 

through oil. Herring cannot swim through oil. And you do not find 

out about those things for 5, 6, 7, 10 years after the spill. 

When Alaska and the Federal Government settled their trustee 

claims, their natural resource trustee claims, for about $1 billion 

and agreed to three minor misdemeanor pleas, no one knew what 

the extent of the harm was going to be. And they did it for cost 

reasons, and they did it because they wanted money as quickly as 

they could get it. But in the end, the citizens of Alaska and the citizens of the United States paid. 

The inability to know what the impacts of a spill are inherent 

in oil spills. In the gulf, I know Mr. Feinberg hopes to tie up his 

fund payments in 3 or 4 years, but assuming he can do it 

logistically—which I doubt—in 3 or 4 years you are still not going 

to know what the full impact of the spill is. 

In Alaska, when the Government did its deal in 1991, it included 

a re-opener provision, and the re-opener provision was limited to 

$100 million, the thought being if there was significant harm that 

we did not know was going to occur, we will re-open the whole proceeding up to $100 million, and we will see if we can settle it. Now, 

all that has done is result in litigation. 

I do not think you can finally settle oil spill claims in year 3 or 

year 4 after the spill. So if you are going to set up a system, a compensation system, the compensation system needs to deal with the 

14 

fisher in the first year. But the compensation system needs to wait 

for 3 or 4 or 5 years until you get a good handle on what the extent 

of the damages are going to be. And they can be odd. Nobody had 

any idea that herring would be genetically decimated the way they 

were in Prince William Sound, but they were. 

You know, the Mississippi Delta is one of the great treasures of 

the world, and the impact of a massive amount of oil on that delta 

is a crapshoot. And once you get it in there, you are not going to 

get it out. You cannot send out people with steam cleaners into the 

delta and have them clean it. So you need to wait 3, 4, 5, 6, 7 years 

until you feel you have a handle on what the damages are and then 

move the money to the State and Federal Governments. 

Senator KLOBUCHAR. Okay. That was helpful. 

I think I am going to turn it over to Senator Sessions here so 

he can get some questions in before the vote, as well as hopefully 

Senator Franken. Then I will come back. 

Senator SESSIONS. Thank you, Madam Chairman. 

Well, I think that is good advice, Mr. O’Neill, in a lot of ways. 

Mr. Feinberg said to the local people Saturday. He met with some 

fishermen early Saturday morning. He had meetings with real estate people, and he had meetings with local mayors and made some 

promises, admitted maybe he promised some things he has not 

been able to deliver as quick as he thought he could. 

So this is not an easy matter. That is one of the things that came 

across to me clearly. How do you decide this? Some of these things 

may well take 2 to 3 years. He has decided that he will provide 

people up to 6 months of benefits now if they can show their loss 

so they do not have to come back every month, and it would reduce 

paperwork and allow him to focus on other claims. And at some 

point, he will seek to bring the whole matter to a conclusion by 

making an offer for a final settlement. The initial payments will 

not require a release of any kind. So whether that will work or not, 

I do not know, but I am certain it will not go as smoothly as a lot 

of people would like it to. 

General McInerney, I appreciate your comments about the moratorium. I would offer for the record a letter from a group of energy 

experts from the National Academy of Engineering who were 

quoted as saying that they favored a moratorium, but who wrote 

a very strong letter saying they never opposed that. I do not know 

if the Interior Department has acknowledged that they misquoted 

them yet, but at any rate, there are complications of significance 

in this whole process, and we want to do it right. 

With regard to the Supreme Court decision, Mr. O’Neill, the jury 

awarded $287 million in compensatory damages to some of the 

plaintiffs and some got $22 million by settlement. The total compensatory damages, as I understand, against Exxon was $507 million. Was there any dispute about that? Or was it a case-by-case 

dispute as to what the exact fund amounts were? Was it that or 

the claim for punitive damages that really carried this case so 

long? 

Mr. O’NEILL. In the end, there was agreement that the amount 

of money that Exxon paid to claimants was $507 million. That is 

the answer to the first question. 

15 

Exxon appealed significant portions of the compensatory award, 

and those appeals were not resolved until 2001 or 2002. The litigation after 2002 dealt solely with the punitive damage award. 

Senator SESSIONS. Now, the maritime law has different rules 

than normal civil procedure. I always was told if you got hurt on 

a ship, you claim that the ship was unseaworthy, and most anything was unseaworthy. But there seemed to be limits on the 

amount of damages that do not apply to injuries sustained on land. 

That is a long time—not just something that came up lately by the 

Supreme Court, but that part of it has been long established. 

To what extent do maritime lawsuits limit or prohibit punitive 

damages? I understand it is more difficult to gain a judgment for 

punitive damages in a maritime case than in a non-maritime case. 

Mr. O’NEILL. There have been fewer punitive damage judgments 

in maritime cases, but they are well established and they go back 

to about the creation of the Republic. I would guess from 1776 until 

the present day, there may have been 30 or 35 punitive damage 

awards in maritime cases. 

However, they were well established, and the maritime law, at 

least with regard to punitive damages, was essentially the common 

law of the Republic. So up to the time of Exxon v. Baker., which 

was the Supreme Court decision that limits punitive damages, they 

were established and there was no arbitrary limit on the size of the 

award. 

Senator SESSIONS. Why has it been more difficult to gain punitive damages? What kind of proof burdens do you have in a maritime case? Why wouldn’t you have more than 35—you probably 

have 35 a week on the land or 35 a day. 

Mr. O’NEILL. I am not so sure that is true, Senator. The answer 

is I do not know, and I have not seen any writing on why it is. I 

do know that the law was well established that you were entitled 

to them if you could prove a reckless disregard for the rights of others, and I do know that the law was well established that there 

was no one-to-one limit. In fact, there is no one-to-one limit in any 

other area of the law with regard to punitive damages. 

Senator FRANKEN. [presiding]. Senator Sessions, I am terribly 

sorry about this, but I got to go vote, and I was wondering, Could 

you go vote? But I know how you are going to vote, so you do not 

have to go vote. 

[Laughter.] 

Senator FRANKEN. Unless you want to continue. You are senior 

to me—— 

Senator SESSIONS. I am over my time, so that is correct. 

Senator FRANKEN. Okay. Can I just ask a few, and then either—— 

Senator SESSIONS. Has the vote started? 

Senator FRANKEN. I guess they have, yes, and we have—— 

Senator SESSIONS. Yes, I guess they have. Let me go vote, and 

thank you, Senator Franken. 

Senator FRANKEN. Okay. Then Senator Klobuchar will be back, 

and if you want to come back, you can. 

You were talking about the one-to-one punitive. Let me ask you 

about that decision. It was as 2008 decision by the Roberts Court. 

Am I correct? 

16 

Mr. O’NEILL. Yes, sir. 

Senator FRANKEN. Okay. And that was decided suddenly—because Exxon was charged—I mean, ruled that they would have to 

pay $5 billion, right? 

Mr. O’NEILL. That is correct. 

Senator FRANKEN. And they changed it to $1 billion? 

Mr. O’NEILL. The Supreme Court reduced the total amount to $500 million, which included—in addition, they had to pay $500 

million in interest because we had been at it for so many years. 

Senator FRANKEN. Oh, Okay. Now, would you say that the—what 

reasoning was there? Was this anything backed by the—was there 

a constitutional reason for this? 

Mr. O’NEILL. There was no constitutional reason. 

Senator FRANKEN. So this was an activist conservative decision 

on behalf of Exxon. 

Mr. O’NEILL. If you look at the case, the Exxon v. Baker case, it 

is unique in American law. You know, you go all the way back to 

the Bible, and you find punitive damages in ratios of 3:1, and other 

Supreme Court cases have talked, well, maybe there is a constitutional limit and a ratio of 10:1. But you find no scholarly writing, 

you find no cases, you find nothing in the Constitution, you find 

nothing in the statutes of the Congress that would suggest that 

there would ever be a one-to-one limit. 

So if you read the case Exxon v. Baker, you come to the conclusion that they pulled it out of their bottoms. 

Senator FRANKEN. Pulled it out—Okay. I got you. 

You know, I guess they said that it would help be predictive— 

it would help be predictive or something like that, right? 

Mr. O’NEILL. That is correct. 

Senator FRANKEN. But don’t you want punitive damages to prevent things like this from happening again? Isn’t that the whole 

point? And didn’t we just see it happen? 

Mr. O’NEILL. The point is for punishment and to deter other people from doing bad things. 

Senator FRANKEN. Boy, I really have to go to vote, and what I 

am going to do is, I guess, we will stand in recess until after the 

vote. Okay? 

Mr. O’NEILL. Yes, sir. 

Senator FRANKEN. Okay, good. 

[Recess at 3:33 p.m. to 3:43 p.m.] 

Senator KLOBUCHAR. Thank you. We are going to open the hearing again, and thank you for waiting. We sort of voted in groups 

so we could maximize the time we were here. 

I want to start with you, Mr. Banta, and Mr. O’Neill talked 

about how you did not find out about certain damages until later, 

that at first certain fish seemed like they were hurt by the oil, and 

then later fish were hurt by the oil. And, of course, that is going 

to shape how we look at how we do damages in this case and if 

we have to make changes to the law so we account for those kinds 

of things. 

Could you talk about the experience in Alaska? 

Mr. BANTA. Yes, thank you. I think that these effects that we 

saw were probably—scientists probably call it something like sublethal chronic effects, and those just do not come out. You see acute 

17 

things when a creature like a sea lion or something floats to the 

surface. But when the herring come back year after year and 

spawn at these beaches where oil still continues to leach out of 

sediments or substrates and things like that, then it really is a 

multi-year process, and the consideration of that I think is critical 

to actually determining what truly is biologically damaged. 

Senator KLOBUCHAR. And your testimony also recounted the 

harms that the oil spill caused to lots of people’s jobs that were dependent on fishing, a wide variety of support occupations like vessel electronics, boat repair, fish processing. How does a local economy that is organized almost entirely around one network of jobs 

recover from the spill? 

Mr. BANTA. I think in that instance it just took time. I mean, it 

really did take Cordova probably 15 or more years to kind of come 

around economically. The impacts, of course, on herring have been 

discussed in great detail here, but the impacts were on salmon as 

well, which is probably the key fishery. And that was for several 

years, and prices were reduced, and incomes. So you have all these 

multi-year processes going on for all these different species and 

then herring never really coming back. 

So I think you just have to dig a little deeper, my friends. They 

did mechanicking when they were not fishing. One worked on the 

garbage truck hauling waste. You find what you can. You do not 

travel, and you cut back. It is just the unfortunate reality. And the 

schools do not get as much money, and it just kind of percolates 

all the way through the community at every level, from services 

down to the individual families’ budgets. 

Senator KLOBUCHAR. Okay. I wanted to explore with Mr. O’Neill, 

as we look at the actual language of the current law, how we could 

better capture some of these damages. Let us go through what 

some of them are. 

First of all, I remember you mentioning the hotel beach and how 

for certain maybe a hotel that had oil on its shores would be covered, but maybe not a hotel that lost the same amount of customers but did not have oil on its shore because it did not have a 

shore. So how could you change the law to account for that? 

Mr. O’NEILL. The answer is I do not know, but let me state to 

you the full extent of the problem. 

Under traditional maritime law, hotels could not recover at all, 

anyway. The only people that could recover were actually oil individuals, oil boats, or fishermen. You could do it—the ideas that 

have come to me, you could do it by zone. If I was the administrator of the $20 billion fund, I would do it by zone. I do not know 

how you write that into legislation. But it is who gets to recover 

and what do they get to recover, two questions: Fishermen, fish 

processors, fish tenderers, people who support the fishing business, 

people on the shoreline, maybe people in other zones. OPA 90 talks 

about people who suffered damage as a result of the oil spill. That 

is about as narrow as it gets. But that provides no guidance because what happens is the courts then decide who is not going to 

get it, and that is what they decide. The history of the courts in 

dealing with oil spills is quite simply meant to keep people from 

recovering. So you need to spell it out in the bill in much more precision than is in OPA 90. 

18 

Senator KLOBUCHAR. Okay. Now, some examples. You mentioned 

how much of a fisherman’s assets are tied up in the worth of the 

boats and the entry permits—illiquid assets, in other words, and 

assets whose value can plummet after an oil spill. Did victims of 

the Exxon Valdez ever recover for those costs? 

Mr. O’NEILL. No. The victims of the Valdez recovered for 1 year 

of fish price loss, for the most part 1 year of catch. They were unable to recover for their devaluation in the boat and the devaluation in the permit. And for these guys, the boat and the permit 

values are their asset base, and they are also their retirements. 

OPA 90 does not allow recovery for the permits or the boats. 

Senator KLOBUCHAR. Yes. But with the $20 billion that is set 

aside—again, maybe this is not for you to ask, but for me to ask 

Mr. Feinberg. Will he be able to look at those kinds of losses just 

because it is a set amount of money that has been put out there? 

Mr. O’NEILL. I think Mr. Feinberg, as I understand his charge, 

can do whatever he wants. I will say that we had a $100 million 

fund in Exxon that was supposed to help fishermen, and the administrator of that fund only paid out $37 million. There is an inclination on the part of people who run these funds to view that 

money as their own and to pay it out slowly or not pay it out at 

all. So there is some institutional concern about that. 

Senator KLOBUCHAR. Given Mr. Feinberg’s experience with the 9/ 

11 victims, hopefully that will not happen in this case. But I think 

that is relevant to know what happened there. 

Another example of a damage, you and Mr. Banta both mentioned that the herring population has not recovered in Alaska to 

the pre-spill levels. Salmon was impacted for a comparatively small 

number of years, but herring may never be the same. Was it possible for the litigation to recover those costs, the costs that—Mr. 

Banta is not going to be able to be a herring fishermen or his kids 

cannot. 

Mr. O’NEILL. I think the herring fishery aspect of this is the biggest tragedy other than the impact on communities in the whole 

deal. It was not clear to us that the herring fishery was permanently impacted until 1996, 1997, 1998, and by then we had tried 

the case and a bunch of associated cases, and everything was up 

on appeal. And we never went back and revisited the herring fishery. To some extent, there was a view that the statute of limitations had run. 

Senator KLOBUCHAR. Because that damage was found later? 

Mr. O’NEILL. That is correct. But the incident was Good Friday 

of 1989. 

Senator KLOBUCHAR. You also mentioned that under the Oil Pollution Act cities can recover only the net costs of the spill response, 

not the total of all diverted public service or lost taxes. Do you 

want to say more about the limits of our current compensation 

scheme on what State and local governments can recover? 

Mr. O’NEILL. Yes, this is one that is very, very troublesome. A 

city who is besieged by an oil spill takes all of its employees and 

its buildings and such and diverts them from doing what they normally do for citizens to helping people with the spill, to cleaning 

up the spill, to housing oil workers, to providing police services to 

oil worker villages. So nobody in town gets the use of the library, 

19 

the use of the police, the use of the fire station because they are 

all diverted. 

The cities ought to be paid for that. Under OPA 90, the cities can 

only be paid if they bring on extra people in addition to their regular staff. So their regular staff and their regular buildings are 

never reimbursed by the spiller or by a fund or by anybody, and 

that is wrong. 

Senator KLOBUCHAR. In the book I mentioned earlier—and I 

think you know about that book; you are kind of the star of it, 

David Lebedoff’s ‘‘Cleaning Up’’—there is a quote that I want to 

read about the damage that is done to communities long after the 

oil has technically stopped flowing. It says, ‘‘One of the things that 

soon became clearer than ever before was the extent of suffering 

that the fishermen had endured because of the spill. The files were 

records of heartbreak. The years of lowered or absent income had 

wrought hundreds of tales of personal tragedy. Destitution, bankruptcy, drunkenness, and divorce were all too common. Some fishermen had suffered strokes. In one case, a multiple sclerosis condition had been badly aggravated by the stress of the spill resulting 

in permanent disability.’’ 

So my question is simple: Do you think the laws as they currently stand take into account these human costs? 

Mr. O’NEILL. The human costs are a result of two things. First, 

they are a result of the fact that people cannot deal with manmade 

disasters the same way they deal with natural disasters. People 

can get through natural disasters some years after it, but with regard to a manmade disaster, they need their full measure of justice 

to move on. So one way to deal with this is quite simply to give 

them their full measure of justice and to allow them to get as 

whole as they can from money as quickly as they can after the 

spill. 

The second aspect is litigation. Twenty-one years of litigation 

without an end in sight or, not that it is ending, without any justice received during those 21 years makes people—makes them 

very angry. So a combination of the impact on jobs and the impact 

of the justice system does not allow people to come to closure with 

an oil spill. And if you go into a bar in Cordova or Kenai or Kodiak 

or a coffee house or a book shop where people are sitting around 

having coffee, it is as if the spill happened yesterday. 

Senator KLOBUCHAR. Is that also your experience, Mr. Banta? 

Mr. BANTA. Oh, definitely. Even just talking about the gulf spill, 

people in Cordova do not want to hear it. It is so frustrating. But 

it just comes up. It is just kind of natural, unfortunately. 

Senator KLOBUCHAR. And along the lines of what Mr. O’Neill was 

talking about, some of these damages that were not accounted for 

in the way the current law works, we talked about the herring population, we talked about the value of the license and the value of 

the boat and things that were illiquid assets. And then we also 

talked about tax revenue to the city, and your hometown of Cordova lost an estimated $20 million in raw fish tax revenues because of the lack of herring fisheries after the spill. 

Did the oil spill affect the ability of the local government to deliver services? And do you feel that the costs for the local governVerDate Nov 24 2008 12:49 Mar 08, 2011 Jkt 064403 PO 00000 Frm 00023 Fmt 6633 Sfmt 6633 S:\GPO\HEARINGS\64403.TXT SJUD1 PsN: CMORC
20 

ment of just basically having all of its tax base eroded were adequately accounted for in the compensation? 

Mr. BANTA. I think that we have seen specifically with those raw 

fish taxes that there was not any good mechanism to account for 

replacement of that revenue. I think that revenue has been lost forever to Cordova and any other communities that actually have herring processing from the sound, for instance, Valdez and probably 

Whittier. 

I think that is pretty much all I can say about the tax issue, and 

your other question was about replacing income—— 

Senator KLOBUCHAR. I know that those were not included, the 

assets of the license and the boats. 

Just one last question, and then I will turn it over to Senator 

Sessions. I know he has a few more questions. 

In 2001 and subsequent years, researchers in Alaska dug over 

12,000 pits—I really did not know this; they researched this—at 

dozens of beach sites that had been covered in oil back in 1989. 

The team found black oily liquid in over half of the holes dug in 

2001 when they went back to look. 

How long after the spill did the cleanup crews go away? And are 

your beaches back to normal? 

Mr. BANTA. Well, I guess the reality is once that oil gets under 

some of the armor and the larger rocks that cover some of the 

beaches and gets down into the sediment, it is pretty much there. 

I think the cleanup ends at some point when it is determined that 

you have gotten out as much as you can get out, and that is made 

by the government and the responsible party. And, unfortunately, 

there are those beaches—you can go there today and find oiled 

beaches. The question is whether or not that does get mixed back 

into the environment. If an otter goes and digs for clams, that can 

loosen the substrate and release that oil. If there is a significant 

winter storm, something like that can happen again. Sea birds 

feeding for mussels, like the pigeon guillemot, that is still a threatened species, the harlequin duck, those kinds of things that feed 

like that maybe can still activate that oil. But it is out there in the 

environment, and that is just the reality that we are dealing with. 

Senator KLOBUCHAR. Okay. Before I turn it over to Senator Sessions, Senator Sessions, you wanted this in the record, the primary 

recommendation in the May 27, 2010, report, ‘‘Increased Safety 

Measures for Energy Development on the Outer Continental Shelf,’’ 

given by Secretary Salazar to the President misrepresents our position, but this is a recommendation. You want it on the record? 

Senator SESSIONS. Please, yes. 

Senator KLOBUCHAR. Okay. I will include it in the record. 

[The recommendation appears as a submission for the record.] 

Senator KLOBUCHAR. Senator Sessions. 

Senator SESSIONS. Well, under the OPA, as I understand it, BP 

is the responsible party, and they have, as I understand it, they 

could seek compensation from anyone that they contracted with 

who failed in their duty to them to do the business. But essentially 

they are the ones that the Federal Government looks to to be the 

responsible party, that they have responsibility for total cleanup, 

no matter how much it costs, even to the extent the company economically fails. I would say for those who think it would be such 

21 

a disaster if they fail, I am sure somebody would buy their oil rigs 

and continue to operate them and buy their oil lands and produce 

from them. It is not going to end production. So they have that 

total responsibility. 

Then they had a $75 million additional responsibility, which I assume is to go to compensate people who may have suffered losses 

outside of cleanup. And then there is a $1 billion or so trust fund 

that is available for compensation there. 

So I have to acknowledge that based on that act, it looks like 

they are indeed willing to pay more than this act strictly requires 

them to pay. But is that your basic understanding of the framework of the act as far as what this responsible party is required 

to pay? 

Mr. O’NEILL. I think that was a very careful reading of the act, 

Senator. 

Senator SESSIONS. Thank you. Well, so that leaves us what we 

should do in the future. Now, I have supported legislation that 

would increase the compensation requirements beyond that act, in 

particular the $75 million limit, trying to tie it to the size of the 

producing company and their profits so that it would not completely prohibit a smaller company from being able to compete with 

some of the big oil companies. I just hate to create a situation so 

only the big four or five can drill in the gulf. But I find that difficult to word, actually. 

Mr. O’NEILL. Well, I have a couple of observations on that, and 

I have thought about that. It seems to me that no matter who the 

producer is, the price of oil ought to reflect what the actual costs 

of its production are, and that includes a spill. And if the spill is 

by a smaller operator or a larger operator, economically neither one 

should get a step up on the other. 

My second concern—and you also see this in the area of supertankers—is I would much prefer—as much as I dislike ExxonMobil, 

I would much prefer ExxonMobil to run its own supertankers rather than ship them out, to have small Liberian shipping companies 

run them. And that relates to the issue of these platforms. I feel 

safer having BP drill a platform than I do having a small Momand-Pop drilling operation run a platform. So I would be concerned 

about subsidizing the smaller operations. It just strikes me both 

economically and out of a sense of fairness that if you hurt people, 

you ought to pay for it. 

Senator SESSIONS. Well, that is a pretty good analysis. Maybe 

you have about convinced me that our little plan was not so clever 

for several reasons, the points you made there. 

I had originally thought that if you create a trust fund, much 

larger than a $1 billion trust fund, that might relieve the intensity 

of interest on the oil company not to have a spill. Is there a balance 

we could strike by raising the requirement on the oil companies 

and creating a trust fund that could perhaps keep the liability level 

at an amount that insurance at least could be obtained? 

Mr. O’NEILL. I have thought about that, and I have an observation on that, too. The great thing about a trust fund is you know 

that if people are hurt, they will get paid. And, historically, that 

has been my interest in the whole thing. 

22 

But you are right, at the same time the creation of a trust fund 

may result in lax practices out in the oil patch in the long run or 

people cutting corners in the long run. 

But that may be something you actually do a compromise on because when you do not pay people the full amount of their damages, it hurts American society. It hurts the Congress; it hurts the 

courts; it hurts American business; it hurts the legal profession. 

So getting people compensated has always been No. 1 in my 

mind, but that is an interesting paradigm that you have created. 

Senator SESSIONS. You know, I talked to a restaurant owner. 

They had done $430,000 in business last June. This June, this restaurant in Gulf Shores, they were down to $260,000. That would 

say to me somebody did this, I did not cause this, somebody was 

responsible for this. And I think they should be prepared to compensate me for the loss. And it is not right on the beach so no oil 

touched their restaurant, but the number of people who were coming to the beach dropped significantly. 

General McInerney, one of the things that surprised me is after 

we have created this fabulous Homeland Security Department, this 

huge Department, virtually every county, I think, in America has 

a homeland security emergency response office under the State 

Government, but fundamentally funded by the Federal Government in large part. This was not activated in this system, so we 

had the Coast Guard, a military-type organization, that now has 

got to respond to an emergency, and we find that people from Port 

St. Joe to New Orleans, all over Louisiana, do not feel like they are 

getting personal attention. And, of course, the emergency management, when a hurricane hits, all these guys go up. All these entities are working. They have communications systems, everybody’s 

cell phone and commitments. It just seemed to me odd that we 

could not utilize this structure, even to the point of asking people 

from Iowa or wherever who are maybe not busy in their emergency 

offices to come down—— 

Senator KLOBUCHAR. You have never been in Iowa, is that what 

you are saying? 

Senator SESSIONS. Yes. They do not—— 

Senator KLOBUCHAR. Do not tell Senator Grassley. 

Senator SESSIONS. They have a few floods, I guess, and snowstorms. 

Senator KLOBUCHAR. They had some big floods. 

Senator SESSIONS. It is odd. They say the Stafford Act has to be 

activated, and that makes the Federal Government liable, and they 

did not want to utilize this whole machinery because it could remove liability from BP and shift it to the Government, which I 

guess makes some sense. But isn’t it true that we should be able 

to call on these personnel that are being trained and prepared to 

deal with all kinds of emergencies? They should be available to be 

utilized relatively easily without shifting the burden of financial 

payment to the Government, I would think. Do you have any 

thoughts about that? 

General MCINERNEY. I have got a lot of thoughts on it, Senator, 

and I think you are spot on. You are getting on something. It is 

an archaic way of thinking, and the fact is we designed Homeland 

Security, we designed Northern Command to support when we 

23 

have any kind of incident, whether it is a natural disaster or manmade disaster, whatever you want. And so in the particular case 

you are talking about—and I am not that familiar with the Stafford Act, but it seems to me that Homeland Security and all those 

people that are out there that are designed for this are in a supporting role. They are supporting in this particular case BP. As I 

was supporting Exxon Valdez in Alaska, they were technically in 

charge in funding with the responsibility, and then they would go 

to different people. And I think that the law should be changed so 

when we have disasters like this that you can minimize the impact. 

And that is why, I think, when you look at the laws that you look 

at rewriting as a result of this, because, again, Homeland Security 

came after Exxon Valdez, but that does need to be changed. I think 

you are on to something. 

In addition, I think that, for instance, we ought to have like a 

Global Hawk, an unmanned aerial vehicle that, when you have a 

natural disaster like this, it could be on alert and launched. You 

would go from Homeland Security to Northern Command, and they 

would launch the aircraft so the national command leadership get 

a visual picture of what is going on rather than relying on the television and other means, because we all know that it is the visuals 

that enable you to make decisions, see the gravity of a situation. 

So I think we have to use this disaster as a tool to help rewrite 

our laws so that the assets we have as the U.S. Government can 

come and support it. 

Now, why is it important, for instance, that you are able to see 

with the new technology that we have of infrared and radar where 

that oil flow is going? Because it enables you to position people so 

you can minimize the impact on the beach. You are talking about 

people on the beach, but how about the gas station owner or someone in 50 miles? Because, as you pointed out, the restaurant owner, 

the people just do not come, and so they should be compensated. 

So if we can minimize the impact on the beaches and in the fishing 

areas, then I think that is very important to minimize the victims 

in this particular case and continue the normal flow of business. 

So I think it is very important. There are a number of things 

that you mentioned that I think you look at in totality that we 

should be doing. 

Senator SESSIONS. Thank you, Madam Chairman. I would just 

say to Mr. Banta, we have an excellent biological environmental 

center called the Dauphin Island Sea Lab, and it does strike me 

that this is a long-term problem. I am told that the warm gulf 

waters are a little better than the cold Alaskan waters in that the 

microbes that can eat and deteriorate oil are more active in the 

warmer waters. But we think there is going to be some permanent 

long-term damage, and I guess you would agree that we should invest in the science to identify as soon as possible what those longterm environmental consequences are likely to be. 

Mr. BANTA. Yes, Mr. Senator, I had the opportunity when I traveled to the gulf to go to the Dauphin Island Research Center and 

meet with some of the researchers there. That is just the kind of 

place that you would want to have doing research if you are looking at trying to do the best job on addressing impacts and effects 

24 

in looking at these long-term acute effects that really will need to 

be researched and tracked over many years. 

Up in Alaska, we are obviously looking at generations, then a facility like that, we have some in Alaska that were put together, the 

Alaska Sea Life Center, the Oil Spill Recovery Institute, the Prince 

William Sound Science Center, that have been funded to deal with 

these kind of longer-term research questions, whether it is biological or technological. 

Senator SESSIONS. Well, thank you. George Crozier, who runs 

that lab, was telling me that you never know about certain things. 

They use the dispersant underwater that seemed to have been very 

helpful. But compounds and products like benzene that would normally rise to the surface and dissipate in the air, he does not know 

now if they made it to the surface, and it is a more hazardous substance than basic oil, apparently, and it might still be in the water 

in concentrations that you do not know about. So I do think continual research analysis and prompt evaluation of the testing, 

which, you know, you hear that it takes 10 days to get a test result, you wonder: Can’t we speed this up a little bit? 

I am really proud of the people, proud of the Coast Guard. They 

are giving their best effort. A lot of errors have been made. The 

skimmers have proven that they can identify an oil glob out there 

and go and get it. We did not have enough skimmers. They were 

far too late arriving. A lot of things that did happen like that. But 

if this well stays capped, I am hopeful that our area of the gulf 

may be avoiding more serious spills, although it has taken some, 

and it does appear that the latest glob is heading toward Louisiana, and I hate it for them, where a lot of the estuaries exist. 

Thank you all for your testimony. It has been very helpful. 

Senator KLOBUCHAR. Well, thank you very much, Senator Sessions, and I truly appreciate your willingness to hear out these witnesses, and I think we all know, as you talked about some of the 

errors made in the reaction to the spill, I think we all know that 

we can also make errors here, and we want to make sure that 

whatever we do in response to the spill with looking at the liability 

statutes, there clearly improvements that need to be made, that we 

do the right thing and we take care of the people not only in the 

gulf but in this country. I just look at it from a fiscal standpoint. 

We do not want the taxpayers on the hook. I look at it from a fairness standpoint for people who are affected by this. And I think 

one of the things I will take away from this hearing and others is 

that, you know, some of these things we are going to have to—we 

will not know for sure the effect on dolphins off the coast or the 

effect on birds in Minnesota when they go down there, especially 

if some of the oil, as we know, is moving up into those marshes and 

things like that. 

So I want to thank the witnesses. It has been really an actually 

informative hearing and positive hearing, and I thank my colleague 

Senator Sessions as well for his good questions, Senator Franken 

for coming, and I know that there are staff from some of the other 

Senators and people interested in this, so we will take all three of 

your lessons that you have given us to learn from Exxon Valdez 

and take them to heart and use them as we go forward in our work 

that we are doing in response to this horrific spill. 

25 

Thank you very much. We will keep the record open for 1 week— 

we try to have limits here—have the record open for 1 week for 

anyone that wants to put anything on the record, and with that, 

the hearing is adjourned. Thank you. 

[Whereupon, at 4:15 p.m., the Committee was adjourned.] 

[Submissions for the record follow.] 

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