This case study extracts the oil spilled tragedy, also a worst ever environmental damage and pollution caused by industrial accident. This stirring industrial accident was happened at 1989, caused by an oil tanker named "Exxon Valdez" owned by Exxon Mobil Corporation, a pioneer in oil production field in the world. In this industrial accident, there were total amount of 11 million of crude oil being spilled in the Prince William Sound, located at Alaska region.
Because of this incident, the residents in this related region are facing unprecedented ecological and financial damaged ever. This case study will carry out the details of the oil spilled incident effect to all the related field, examines the response of Exxon Mobil Corporation to deal with the accident happened and also the compensation to the victims.
Apart from this, this case study will also look into the safety precaution of Exxon Mobil Corporation to avoid such oil spilled disaster from happened again and also improvements and changes of corporation management system to deal with the unexpected emergency when it strikes again.
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2. Introduction
On March 23, 1989, Exxon Valdez, an oil tanker loaded with 53,094,510 gallons (1,264,155 barrels) of North Slope crude oil [1] owned by Exxon Mobil Corporation, a leading oil exploration and production company in the world had left the Alaska terminal at Alaska Standard Time, 9:12pm heading to Long Beach, California. The total of Exxon Valdez crew is 19 persons including the Captain (Joseph Hazelwood), Second Mate (Lloyd Lecain) and Third Mate (Gregory Cousins), Chief Mate (James R. Kunkel), Marine Pilot (William Murphy), Chief Engineer (Jerry Glowacki), Radio Officer (Joel Roberson) and lookout (Maureen Jones) etc.
On March 24, 1989, the worst ever environmental disaster happened in Alaska, United Sate. The oil tank, Exxon Valdez had encountered some technical error and unexpected reason; the oil tanker ran aground and finally leads to a famous tragedy in shipping history, Exxon Valdez Oil Spill Disaster. There is eight of eleven cargo tanks, 10.8 million gallons of crude oil being spill into Prince William Sound in just a short period of time when Exxon Valdez on the way heading toward to California. This large area oil spilled had affected a large number of islands in Prince William Sound.
Throughout the investigation of National Transportation Safety Board on the oil spill accident, they found that there are several causes and factor lead to crashing of the Exxon Valdez. Firstly, proper navigation instruction do not provide by Captain Hazelwood to enhance the shipping process. Secondly, the Third Mate Cousins do not steer the ship safely while on duty. Thirdly, Exxon Mobil Corporation does not provide sufficient crew for the shipment and fail to supervise the Captain about the duty. On the other hand, the third party, the US coast guards also one of the oil spilled accident factor due to their failure to provide an effective vessel system and lack of effective pilot and escort services on Exxon Valdez shipment.
According to the research, this incident had covered approximate 1500 miles of the Alaska coastline and eventually leading to loss of live. Through this accident, several thousand of marine mammals and animals, birds and countless fish were killed in Alaska region. Due to lack of oil spilled response depots of Exxon Mobil Corporation and US government was not prepared to deal with this in sudden disaster; therefore the initial response to handle the disaster and clean-up efforts was extremely slow, eventually lead to rapid spread of the oil spilled area in Alaska region. The world were disappointed, especially Alaska's resident.
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3. Aim and Objectives of Exxon Mobil Corporation
Exxon Mobil Corporation was a leading oil exploration and production company in the world. As they committed to being the world's premier in petroleum and petrochemical company, they must achieve excellent financial and operating results continuously and at the same time follow the ethical standards [2]. They delivering safe, improve the energy efficiency, maximize the value of resources and therefore generate the maximum benefit for resources owners, society and their shareholders.
In order to generate the maximum benefit for all the side, Exxon Mobil Corporation had set a principle to guide their relationships with their shareholders, customers, employees and also the communities. Firstly, as to drives the company management, Exxon enhance their shareholders to be rewarded with superior returns through their long term investment with running the business profitably and responsibly. Secondly, they always fulfill their ever changing customer preferences; they always innovative and responsive but still maintain high quality product and services at competitive prices. Thirdly, Exxon retain the most qualified people and maximize their success through a series of training and development and offer them a safe work environment, trust and fair treatment. Fourthly, Exxon dedicated to perform safe and environmentally responsible operations, they maintain high ethical standards, obey all the laws, rules, regulations, local and national culture in the entire place they operate worldwide.
Exxon Mobil Corporation had cover several aspect in their business, such as exploration, development, production, natural gas and power marketing, refining and supply, fuels marketing, lubricants and specialties, chemical etc [3]. In order to be at leading edge in every aspect of business, Exxon Mobil Corporation always improves their productivity and efficiency through learning, sharing and even practices. Besides, they keep on develop new technologies as to provide a competitive edge to achieve their aims, targets and perfectly execute company's business plan in all the related aspects and fields.
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4. Oil Refinery Industrial Processes and Operations
Initially, raw or unprocessed crude oils are useless when it out from ground. Oil refinery process is an industrial process that those crude oil being processed and convert or refined into more useful form of petroleum or petrochemical products [4]. Examples of the refinery petroleum products are heating oil, lubricating oils, gasoline (normally known as petrol), kerosene (related jet, aircraft fuels), diesel fuel, liquefied petroleum gas (LPG), paraffin wax, tar and also asphalt base. As usual, large sprawling extensive piping carrying streams of fluids between large chemical processing units is the typical type of oil refineries.
During the oil refinery process, the raw material, crude oil is being separate into a series of fractions by fractional distillation. Fractional distillation is the process that the chemical components in crude oils are being separate according to their boiling point respectively. In this process, fractions at top of fractionating column always will be low boiling point (lighter chemical component) while higher boiling point (heavier chemical component) at the bottom. During distillation process, the crude oils initially are heated at bottom part with high temperature, and then it will crack into lighter and more useful product upward in the fractionating column. Diagram 1 show the flow process and fractionating column level in fractional distillation process.
Diagram 1
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The various structures of oil have different properties and uses. The purpose of refining process is to separating and purifying them. There are a series of flow and step of common process units in refinery operation.
Diagram 2
Diagram 2 depicts the various unit processes schematic flow diagram between the initial crude oil inlet and the final end product [5]. (Note: Does not include any usual refinery facilities)
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Firstly, the salt in crude oil will wash out by a desalted unit and then entering the atmospheric distillation unit to distill into fraction. After the atmospheric distillation, the vacuum distillation unit will continue to distill the residual bottoms. Secondly, naphtha from atmospheric distillation must desulfurized by naphtha hydrotreater with hydrogen before entering the catalytic reformer unit.
In catalytic reformer unit, naphtha boiling range molecules will convert into higher octane product and hydrogen which can be used in hydrotreater or hydrocracker will released as byproduct through this reaction. After the atmospheric distillation, distillates like diesel will desulfurized by hydrotreater. The FCC (Fluid Catalytic Cracker) unit will upgrade the bottom, heavier fractions into more valuable upper fraction lighter products while the hydrocracker uses hydrogen to upgrade from heavier to lighter fraction.
Thirdly, thermal cracking through visbreaking unit upgrades heavy residual oils to valuable, lighter and viscosity reduced product. Kerosene, LPG and jet fuel oxidized to organic disulfides by the merox unit. For heavier residual oils, coking units process them into diesel fuel and gasoline, leaving petroleum coke as residual and then gasoline blending is performed by alkylation unit to produces high octane component. Next, production of hydrogen to hydrotreater and hydrocracker is done by steam reforming unit and gaseous fuels being store at suitable pressure to maintain the liquefied gas storage usually in cylindrical tanks.
In order to smoothen the refinery process, utility like cooling tower (circulating coolant), boiler plant (steam generation), instrument air systems (pneumatic valve), electric substation, waste water collection and treating system (make sure water either for reuse or disposal) are necessary. Finally, unwanted materials of lubricating oil or diesel were removed by solvent refining units with solvent like cresol. On the other hand, heavy waxy constituents removed by solvent dewaxing.
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5. Risk in All Areas
Exxon Valdez oil spilled disaster happened in sudden, just right after the incident, the environmental analysis already show this oil spill disaster could lead to a serious global oil crisis problem due to losing too much crude oil in this unexpected incident. Global oil industry soon suffers by the impact of oil spill due to shortage problem as they losing too much raw material (crude oil) for oil refinery process.
Besides, fuel prices are highly affected by this incident and carry high volatility to future fuel market. No matter for short term or long term, there was an obvious economic effect during that suffering moment, the economic collapses at the moment lead to a series of side effects.
The main economic aspect that experienced unprecedented impact was the fisheries of South Central Alaska. Fisheries were the main livelihood at the area and now being affected after the spilled crisis. Most of the fisheries stocks like salmon and herring in that area play the important role to provide the means of livelihood for the region's small communities. All of the stocks are damaged due to the leakage by the Exxon Valdez and causes suffer and life crisis to those residents especially adversely to the surrounding city, Cordova, Alaska.
The affected fisheries area being shut down in 1989, no matter fisherman or people living in the region are badly affected and suffered in heavy economic losses. As the seafood price drop [6], fisheries market and local economy collapse in sudden and eventually lead to few tragedy suicide case at that tough time.
On the other hand, the oil spilled disaster also causes the loss of recreational sport at that incident region or nearby city [7]. This brings a huge negative impact to the local tourism and causing uncountable loss. This Exxon Valdez hot issue results in losing confident by worldwide tourist to have a visit and trip on the vacation spot. This phenomenon leads to reduced in tourists and deterioration of the tourism industry and finally economy collapse in just blink of an eye.
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6. Consequences of Oil Spill Disaster
An oil spill accident can lead to various terrible and serious consequences no matter to human, animal, plants, marine life, environment and our natural ecosystem. It affects all the aspects, the entire field, and all the related area and destroys our natural ecological balance.
During the incident happened, the crude oil leaked from the oil tank spread quickly into the Alaska region ocean and soon will cover a large area. According to research, we obtain a surprising result state that a single gallon of crude oil is able to pollute a couple of acres in size. Exxon's oil tank, Exxon Valdez had leak out a huge amount of oil into the ocean and the amount spread extremely quickly with the help of wind and therefore had cover approximately 580 square miles in just 3 days.
Due to the leaked oil was crude oil in this disaster, when it leaked into the ocean, it mixed with water, this will change the composition of crude oil to become a substance called "mousse" which defined as a sticky substance that will clings with whatever matter that come contact with it [8]. The mousse was a "dangerous killer" to marine life as it can stick to them when they contact with it. As usual, marine life do not know to avoid such mousse and even be attracted with it as it resemble food therefore when they closer to the mousse, they will being stick to it and the end of them were dying. Under the data recorded by EVOSTC, there are estimated 250,000 seabirds, 2800 sea otters, 300 harbor seals, 250 bald eagles, 22 orca (killer whales), billions of salmon and herring eggs been kill during the spill [9].
According to Charles E. Ophardt, density is a physical property of matter which defined as a qualitative manner as the measure of the relative "heaviness" of objects with a constant volume [10]. During oil spilled, the crude oil leaked into the ocean will floats on the surface of sea water since it is less dense compared with it, therefore the layer of floating crude oil will block the oxygen supply into the sea and eventually cause death of marine life.
For flying animal, the "mousse" can break down their capabilities of feathers and compromises their flying ability as they flew to the surface of sea for food hunt. When they contact with the surface crude oil "mousse" layer, they will stick on it and due to malfunction of wing, they will finally drowning. Besides, if the underwater marine animals digest some spilled oil, it would be more dangerous as a level of toxins can be bringing in their system, it is going to further poisoning the whole food chain, food web among the living thing as a cycle and finally lead to a disastrous consequences.
The above phenomenon will continue to carry out a series of suffering like damage of immune systems and airways. Moreover, it will also cause breeding, fouling interruption and even thinner the animal's larvae and egg shells then eventually bring to deformities. On the other hand, waterway ecosystems will also be affected by the tainting of algae at the oil spill coverage.
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7. Improvement and Changes of Management System
When the incident happened, due to the United State government and Exxon Mobil Corporation do not have an effective system to deal with the crisis, the cleaning process go slow and keep delayed, therefore the oil spill coverage spread quickly and soon huge area occupy and eventually lead to serious environmental problem ever in history.
3 years after the incident, in 1992, the United State coast guard only declared that the clean up process of Exxon Valdez Oil Spilled Disaster was completed. The long term cleaning process indicate that the severity of the oil spill disaster and imagine how large was the coverage of oil spilled at Alaska region.
After this painful lesson, Exxon Mobil Corporation found that an effective system is necessary to deal with those unexpected accident at any time to ensure the rapid response and prompt action to be taken immediately when crisis happened again. Therefore, they have reform the company's operational management system in order to prevent and response quickly to future incidents.
At first, as to safeguard the employees, worldwide operating communities and also the environmental, Exxon Mobil Corporation has redouble its long time commitment with a series of reformation and prevention action. In order to reduce human error, Exxon Mobil Corporation has increases the individual accountability and emphasis on equipment reliability in daily activities. Besides, they also increasing their infrastructure inspections and perform a series of training as to address the high spill risk area.
Second, Exxon have modify the company's recruitment system, they give priority to hire high qualified, experiences and professional crew to protect the transit, secure the shipping process and in order to meet the shift arrangement for crew member as to ensure they obtain sufficient rest and always in the best state at any time. Apart from this, for those restricted safety sensitive position, they entrusted to those crew member who never have substance abuse history. Prevention is always better than cure, Exxon Mobil Corporation also applying the implementation of drug and alcohol test on crew for safety reason and as a precaution step during pre-shipping.
Third, Exxon carry out frequently periodic assessment, checking and maintenance on their company's oil tanker too. This ensures that the facilities are in optimum performance and well functioned. Moreover, Exxon had increase the intensity of crew training as to strengthening the crisis management of captain, pilot and crew member. Furthermore, Exxon often apply new technology and navigation system to improve shipping process and ensure the integrity of oil containment systems, they also frequently modified the oil tanker shipping route to more secure way to enhance the shipping and as a prevention to such unforgettable disaster again.
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In order to more quickly response to any unexpected situation, an emergency response centre was established by Exxon to handle all the unexpected accident. Besides, they also improved response capability by developed and applied new spill-detecting technology and frequently launching extensive oil spill drills at Exxon Mobil locations worldwide. In addition, Exxon Mobil Corporation becomes a founding member of every major oil spill response center worldwide and the involvement of Exxon employees in oil spill response teams worldwide have exceed 1000 people.
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8. Summary
The Exxon Valdez oil spilled disaster has making history by posses the largest settlement on record for damage to the natural resources. Exxon Mobil Corporation was fined for the largest fine ever imposed for an environmental crime which is 150 million. Besides, the company also pays approximately 100 million for the injuries caused to wildlife.
Finally in 1991, the United State Federal Court approved to establish the amount of 900 million restoration fund that payable over a 10 years period for restoration the incident place purpose. EVOSTC (Exxon Valdez Oil Spill Trustee Council) was set up to oversee and to coordinate the restoration efforts.
Through this Exxon Valdez oil spill disaster, all relevant units are well prepared and ready to face any future crisis no matter for Exxon Mobil Corporation, related oil industry company and even the United State government. Although there is a delayed and slow effort to deal with this incident at initial, but Exxon Mobil Corporation has show to the world that they learn from mistake, and they focus on every preventive measure to accident in future.
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