Exxon Valdez Oil Spill Still Leaves a Painful Legacy
Exactly 25 years ago, 260,000 barrels of crude oil from the Exxon Valdez oil tanker inundated the frigid, fragile waters of Alaska's Prince William Sound. Many disturbing physical reminders of the largest tanker disaster in U.S. history still linger -- populations of marine mammals, birds, fish and invertebrates still haven't fully recovered, and thousands of gallons of tarry oil remain embedded in the otherwise pristine beach sediment.
At the time, politicians pledged they would heed powerful lessons from the spill to drive and dictate a cleaner future. Yet many of the most fundamental lessons are still being ignored as we enter a perilous future marked by escalating fossil fuel pollution and warming global temperatures.
The spill did, of course, spur some immediate action, such as double hull design requirements for oil tankers and tougher operating procedures for transporting oil in Alaskan waters -- steps that have contributed to a significant drop in shipping spills in recent decades.
It also inspired a much-needed re-evaluation of the role and responsibility of companies as stewards of the global environment -- an ethic that was the driving force in the launch of my nonprofit sustainability group, Ceres, in fall 1989.
Ceres began with the creation of the Valdez Principles, later named the Ceres Principles, a 10-point code of environmental conduct that Ceres' founding investor members encouraged companies to publicly endorse. This kernel of an idea has since blossomed into a sweeping corporate sustainability movement that has thousands of companies reporting annually on their environmental strategies, setting goals to reduce pollution and sourcing more renewable energy.
Progress, to be sure, but it's hardly enough. Today's global environmental problems are bigger and more profound than ever, the most obvious example being climate change. Even as the scientific community and a growing number of corporate CEOs agree that climate change is underway due to human activity, global carbon pollution is increasing -- last year's record levels were 2.1 percent higher than 2012 -- and climate change is advancing faster than anyone would have predicted a decade ago.
Why are we still so far from a sustainable economy, even after the powerful lessons of the Exxon Valdez, the BP oil disaster in 2010 and Superstorm Sandy in 2012? Here are a few key impediments:
First, policymakers and the public are adept at responding to explicit environmental disasters, especially when there is an easily identified villain. But finding the resolve to tackle slowly evolving calamities, such as climate change, where pollution sources come from car exhaust pipes to smokestacks, has been far more challenging. Even after Hurricane Sandy, the colossal storm that shut down New York City and Wall Street, Congress has been unable to muster a response beyond approving more disaster relief spending.
Second, companies and capital markets continue to be hampered by short-term thinking, which drives far too many CEOs and investors to focus on quarterly earnings performance. This comes at the expense of the long-term value creation and profitability that would result from sustainability-oriented business strategies. A sobering statistic in this regard: 63 percent of the 1,000-plus corporate board members and executives surveyed by McKinsey last year said pressures to generate strong short-term results had increased over the past five years.
Third, we have been unable to curb our myopic reliance on fossil fuels. Despite convincing evidence that fossil fuel pollution is putting us on a path toward catastrophic climate change, the oil and gas industry is spending massive amounts of capital -- more than a half trillion dollars a year -- to find and extract fossil fuels from more challenging and unconventional places, including oil sands in Canada (where the oil is bound up in sand) and remote deep-water locations such as the Arctic. The speed and scale of the hydraulic fracturing shale energy boom in the U.S. -- a form of extraction with major water and air pollution impacts that is exempt from several key federal environmental laws -- is no less alarming.
We can put our economy on a more sustainable path by revisiting the lessons taught by the Exxon Valdez disaster: Corporations must plan for a cleaner future and be held accountable; policymakers, especially Congress, must support strong climate and energy policies that protect our health, economy and environment; and, we must reduce our collective reliance on fossil fuels. Here's how:
• Spend less money developing new fossil fuel reserves that pose risks to both the global environment and investors themselves. Due to a variety of trends, including escalating carbon-reducing regulations, renewable energy sourcing and other low-carbon technologies, many coal and oil reserves being developed today may ultimately be worthless as global demand for fossil fuels declines. Fossil fuel reserves that have both expensive production costs and a high carbon footprint are especially vulnerable to these trends. Ceres is coordinating an effort by nearly 100 institutional investors who are pressing the world's 45 largest fossil fuel companies on these concerns.
- Boost global spending on clean energy. The International Energy Agency states that to keep global warming below the critical two degree Celsius threshold, global clean energy investment by governments, companies and investors must be increased by an average of $1 trillion a year for the next 36 years. Ceres calls this the Clean Trillion energy challenge, which calls for doubling clean energy investing to $500 billion a year by 2020 and to $1 trillion a year by 2030. Our report, "Investing in the Clean Trillion: Closing the Clean Energy Investment Gap" contains 10 specific action steps for achieving this goal.
- Companies and investors must be bolder in advocating for stronger action on climate change and other sustainability threats. These market actors can help end the partisan gridlock over climate change by advocating forcefully for state and federal policies that will help secure a stronger, sustainable economy. It's encouraging that 750 leading companies, including General Motors, Apple, Unilever and KB Home, have already signed the Ceres' Climate Declaration calling for concerted Congressional action to combat climate change. But more companies -- especially their CEOs -- need to join in.
We cannot forget the lessons taught by the Exxon Valdez. Daily reminders today -- such as rising sea levels, rising food prices, historic heat waves and droughts -- must spur stronger steps toward a cleaner, fossil fuel free future. We cannot afford another 25 years of incrementalism and dawdling.