The Supreme Court ruled today that the punitive damages for ExxonMobil in the Exxon Valdez oil spill of 1989 should be reduced from $2.5 billion to an amount decided by a lower court, not to exceed $507.5 million. Here are some factoids on the economic impact of this spill.
- Oil Spill occurred on Friday, March 24, 1989
- Exxon:
- On 3/23 Exxon closed at $11.13 / share
- By April 11, it closed at a low of $10.44, down 6.2% from the day before the spill
- By the end of 1989, it was up 12.4%
- Today it opened at $87.45, up 686% from the day before the spill and 738% from its low
- Crude Oil:
- Closed on 3/23 at $20.15 / bbl
- Is now at ~$134 / bbl, up 565%
- Lost Oil: Approx 10.8 million gallons or 257 thousand barrels of crude oil were lost
- 10.8 million gallons represents ~20% of the oil on board that day
- Valued at $5.2 million in 1989
- Valued at $34 million today
- Ship Damage: 1,600 tons of steel, $30 million in repairs in 1989
- Court Rulings:
- 1994 - Baker vs. Exxon charge Exxon with $287 million in actual damages and $5 billion in punitive damages
- 2002 - Court of appeals reduces damages to $4 billion
- 2006 - Damages were cut to $2.5 billion
- Feb 2008 - Appeal to Supreme Court
- June 25 2008 - Supreme Court rules punitive damages should be set by a lower court and should not exceed $507.5 million
- At a 5% compound growth rate the $5B would be ~$12.6B today
- At an 8% compound growth rate the $5B would be ~$21.6B today
Some pretty big numbers, and this doesn't include legal fees, clean up costs, lost Alaska tax revenue and so much more.