How Long Until Alaska's Next Oil Disaster?

The compromise that passed the Inflation Reduction Act has Alaskans braced for catastrophe.By Lois ParshleyPhotographs by Acacia JohnsonIce formations swirl across the silty waters of Cook Inlet, Alaska. (Acacia Johnson)December 24, 2022, 7 AM ETStephen Payton has spent a lot of time planning for disaster. The environmental program coordinator for the Seldovia Village Tribe in Southcentral Alaska and a board member of the Seldovia Oil Spill Response Team, he's helped organize countless drills with volunteers, preparing to respond to an oil spill in nearby Cook Inlet. Over and over, he's practiced setting out containment booms, floating barriers designed to slow the spread of slicks.

But this summer, while drift fishing near the shipping channels in the inlet, he got an up-close view of the oil tankers that could cause such a spill. Their massive hulls dwarf other vessels, casting deep shadows. It was a sobering perspective.

'If something were to happen out there—it could just be so detrimental,' he says.More than 30 years after the devastating Exxon Valdez oil spill, many Alaskans are still haunted by the possibility of another such disaster. Some felt that those fears were about to be realized in 2020, when the Bureau of Ocean Energy Management (BOEM) began preparing to auction off development rights to a million acres of Cook Inlet, a proposal known as Lease Sale 258. Proponents argue that development would eventually buoy the region's natural-gas supplies, but it would also bring new shipping traffic and an array of new platforms and pipelines to the inlet—along with their associated risks.

The Seldovia Village Tribe, other Cook Inlet residents, and concerned people around the country submitted scathing critiques through the public-comment process. The probability that development would lead to another large spill was officially estimated to be one in five; critics argued that the risk was far higher.In May, the Biden administration canceled the plan, citing a 'lack of industry interest.' Though the administration did not explicitly acknowledge the public resistance, opponents felt vindicated. 'There was a sense of hope,' says Marissa Wilson, the executive director of the Alaska Marine Conservation Council.

'It was like, wow, maybe the public process is working.'But last summer, Senator Joe Manchin of West Virginia insisted that the Inflation Reduction Act include subsidies for fossil-fuel companies and guarantee opportunities for new oil and gas development, including sales in Alaska and the Gulf of Mexico. As a result, Lease Sale 258 was resurrected by a bill intended to protect the climate—leaving Alaskans bracing for catastrophe.'It was shocking,' Payton says. He has three young children, and he's teaching them to fish.

If the sale is approved, Payton wonders, what will these waters hold when his kids are grown?East of Cook Inlet, on the other side of the spruce-stubbled Kenai Peninsula, lies Prince William Sound, where the Trans-Alaska Pipeline System ends at an export terminal in a small fishing town called Valdez.In the 1970s, when a consortium of oil companies began building the 800-mile-long pipeline, many local fishermen objected to the project, concerned about the risks of a spill. As oil started flowing to Valdez, worries about the operation's oversight intensified. In 1989, a commercial fisherman named Riki Ott testified to a civic group in Valdez, saying, 'Fishermen feel that we are playing a game of Russian roulette.'The next day, the oil-tanker captain Joseph Hazelwood guided the Exxon Valdez and its 53 million gallons of crude oil toward the sea.

He found the narrow sound peppered with icebergs, fragments of a quickly deteriorating glacier. Late in the evening, he handed over the helm to an inexperienced third mate, telling him to put the ship on autopilot. (The National Transportation Safety Board later determined that Hazelwood was impaired by alcohol.)While Hazelwood slept, a crew member noticed that the warning light indicating a shallow reef was on the wrong side of the ship.

The Exxon Valdez was off course. 'I think we're in serious trouble,' the third mate told Hazelwood over the intercom. As the captain raced back to the bridge, the Exxon Valdez shuddered and crashed to a halt, its metal hull tearing open on the reef.As the snow-covered fjords brightened in the cold spring morning, crude oil gushed into Prince William Sound.

When it hit the water, its chemical composition began to change, releasing benzene into the air and transforming into a sticky tar that clung to anything it touched. Craig Matkin, a marine biologist, was working on his boat in the nearby town of Seward. 'I walked up the ramp, and I heard the radio at the Coast Guard office,' he recalls.

'And I went, ‘Holy shit.''Matkin remembers rushing to find emergency booms, hoping the floating barriers would help contain the spreading slick. Then Matkin and his pregnant wife, Olga von Ziegesar, also a marine biologist, set out to find the killer whales they'd spent years studying. Choking on the fumes rising from the water, they found a pod attempting to shelter near an island.

As oil swept past, the animals circled in the island's lee, trying to avoid the slick, von Ziegesar recalls. 'But they finally turned, and swam right through it.' In the years after the spill, 15 whales either went missing or were found dead, all but dooming a genetically distinct subpopulation.While Exxon representatives, state regulators, and federal officials argued about what to do, a storm blew in, making it impossible to break up the oil with chemical dispersants. Instead, gusts of up to 70 knots lashed the spill into a poisonous foam, spreading it hundreds of miles around the peninsula and into Cook Inlet, eventually fouling 3,200 miles of beaches.Scenes from the Exxon Valdez oil spill in 1989 (Chris Wilkins/AFP/Getty; Bob Hallinen/Anchorage Daily News/Getty; Erik Hill/Anchorage Daily News/Getty)With no incident-command system in place, the response soon created its own disruption, and remote coastlines echoed with the chop of helicopters.

'Exxon wanted to get every fisherman on the payroll,' Matkin says. After someone photographed his boat towing booms, he says, he found an unsolicited $250,000 check from the company in his mail. Furious, he returned it.Nancy Yeaton, who is a member of the Native Village of Nanwalek, was one of many Cook Inlet residents who joined a cleanup crew.

Exxon offered double the local wage, eventually employing 11,000 people. 'We became professional rock wipers,' Yeaton says. 'You'd go pick up a rock, wipe the oil off, and look around for another.

It was senseless, but at the same time, what could we do?' Crews also conducted high-pressure hot-water washes that essentially boiled the beaches; studies later found that the heat of the water, along with the displacement of oil below the waterline by the force of the spray, only worsened the initial damage.There was no way to clean the fish, shellfish, and other seafoods that Yeaton's community depended on, and the loss was especially hard on the elders. 'They lived their whole lives on what was given to them from the land and the ocean. Now, all of a sudden, we're telling them, ‘You can't eat that because of the oil,'' Yeaton remembers.

Losing the tradition of gathering those foods had a big impact, too. 'Those were the times that parents spent with their children, gathering and relaying stories and values.'As the local herring fishery collapsed, Exxon resisted paying damages to residents. The company  filed claims against the Coast Guard, arguing that it had been negligent in granting licenses to the company's crew members and had not provided 'adequate navigation services' to the vessel.

Fishermen lost their homes and went bankrupt while the cases crawled through the legal system. In 2008, the Supreme Court finally ruled that the company only had to pay $507.5 million of the original $5 billion in damages. An estimated 8,000 of the original plaintiffs died before receiving any compensation.'Success bred complacency; complacency bred neglect; neglect increased the risk,' an Alaska Oil Spill Commission report concluded.

The U.S. Geological Survey, for example, had warned Exxon that a changing climate was causing glaciers to retreat, filling shipping channels with hazardous ice. In sum, the commission wrote, 'The wreck of the Exxon Valdez was not an isolated, freak occurrence, but simply one possible (and disastrous) result of policies, habits and practices.'The herring fishery never recovered.

Low-level oil exposure continues to cause heart defects and lower survival rates in salmon. A 2017 study of the peninsula's beaches found that in some places, subsurface oil residue remains up to eight inches thick.Of the killer whales photographed swimming through the slick, only one, known to researchers as Egagutak, survived. His family has dwindled to seven elderly members.

Because his subpopulation's calls are so distinctive, researchers are able to recognize his long, mournful wail—a soon-to-be-lost dialect, calling out through an emptier ocean.Ice moving swiftly in the tide along Turnagain Arm, part of Cook Inlet near Anchorage, Alaska (Acacia Johnson)In the aftermath of the Exxon Valdez disaster, Congress passed a law requiring oil tankers in U.S. waters to have double hulls by 2015, a move that appears to have reduced the number of spills from shipping. Yet as the industry, in search of new oil and gas deposits, has moved its operations offshore, the risk of other kinds of fossil-fuel disasters has increased.

Recent history suggests that in Alaska, neither the federal nor the state government is willing to publicly confront the problem.Alaska's offshore oil and gas production began in the Cook Inlet basin around 1960. But by the early 2000s, the production of natural gas from Cook Inlet had long since peaked and was shrinking, sparking concerns about the regional energy supply. So when Hilcorp Energy Company bought Chevron's aging Cook Inlet assets in 2012 and promised to revitalize offshore production in the area, Alaska officials welcomed the company to the state with open arms.

Hilcorp, now the country's largest privately owned oil and gas company, would become integral to Alaska's energy industry. Today, a company spokesman says, 'Hilcorp is committed to Alaska and looks forward to continuing to responsibly produce Alaskan oil and natural gas, create Alaskan jobs and contribute to the state's economy for decades to come.'During its first four years of operations, however, Hilcorp violated state regulations so regularly that the Alaska Oil and Gas Conservation Commission (AOGCC) issued a blunt rebuke, writing that 'the disregard for regulatory compliance is endemic to Hilcorp's approach to its Alaska operations … Hilcorp's conduct is inexcusable.'In 2017, a helicopter pilot flying over one of Hilcorp's Cook Inlet oil platforms noticed bubbles billowing up from a break in a 50-year-old pipeline. The leak wasn't repaired for more than three months, even though a single day's leakage could have powered hundreds of homes.

(At the time, Hilcorp announced that it had reduced the amount of gas flowing through the line, but said halting production would depressurize the pipeline and increase the chances of an oil spill.)The chair of the AOGCC, Hollis French, believed that the state had a responsibility to investigate the leak. But he faced resistance from his fellow commission members for months. In January 2019, Governor Mike Dunleavy warned French that he was in danger of being removed from the commission for 'neglect of duty.' Less than two weeks after Dunleavy issued this warning, Hilcorp Energy gifted $25,000 to an 'independent expenditure group' supporting Dunleavy.

French was fired the following month. (Dunleavy's office did not respond to a request for comment.) French took the pipeline issue to court, and the Supreme Court of Alaska ultimately agreed that the agency had a responsibility to investigate the leak. But the agency continued not to investigate—even as the same pipeline leaked again in 2019 and 2021.The AOGCC did fine Hilcorp for several other violations of requirements intended to prevent spills and leaks, including two fines totaling $64,000 at the end of 2021.

The agency cited 'Hilcorp's lack of good faith' and, again, the company's 'track record of regulatory non-compliance.' (A spokesperson for Hilcorp said at the time that the company 'takes seriously AOGCC's recent orders and is taking proactive measures to ensure similar incidents do not happen in the future, including better contractor management, revising procedures, and dedicating additional resources focused on well integrity.' The AOGCC did not respond to a request for comment.)Meanwhile, Alaskans have become heavily dependent on Hilcorp for electricity, heating, and transportation fuels: The company not only produces approximately 85 percent of Alaska's natural gas but also controls much of the state's energy infrastructure. 'Never before in the state's history has Alaska been so reliant upon a single energy company,' says Philip Wight, a historian who specializes in Arctic studies at the University of Alaska at Fairbanks.Back in 2012, the Federal Trade Commission raised concerns about Hilcorp's control of all of the region's gas storage and the majority of its pipelines. But the FTC deferred to the state, which chose not to take action.

'Without competition, regulation, or anti-trust oversight, Hilcorp has been able to demand monopoly rents and anti-competitive contracts for natural gas from Alaskans,' Robin Brena, a longtime oil and gas attorney, said in an email. Hilcorp's contracts often have anticompetitive features—for example, requiring utilities to sign away their ability to purchase from other vendors in order t