The best way forward for managing Exxon Valdez oil spill recovery funds

More than 30 years ago, the Exxon Valdez ran aground in Prince William Sound, causing widespread damage to marine wildlife, ecosystems and coastal communities. Despite about $700 million spent on environmental and economic recovery efforts, the areas affected by the spill have not yet been fully restored. The Exxon Valdez Oil Spill (EVOS) Restoration Fund has about $180 million remaining, and there are ongoing discussions about its future. Under the current management plan, all of the remaining funds would be spent over the next decade. After that, the fund would cease to exist. Financial support for restoration and recovery initiatives would end, even though some birds, fish and marine mammals have not yet recovered. Economic activities, including commercial fishing, recreation, tourism and subsistence, have received less support and are still recovering.

This initiative to spend down the remaining funds includes four resolutions that would significantly reduce public input by eliminating public meetings and the annual review of proposals and would also allow the funding of projects outside the areas affected by the oil spill. I have to ask whether there is a better, more sustainable way forward. The answer is yes. Rather than pursue the path outlined by these four resolutions, there is a better alternative that would support the spill-impacted region for the foreseeable future.

A proposal by a coalition of community leaders would convert the remaining funds to a permanent endowment that would support scientific research, habitat protection and ecosystem restoration in perpetuity. Alaskans are already quite familiar with an asset’s advantages that provide an annual stream of income — the Permanent Fund. While spending down the Permanent Fund, over say the next decade, would generate a temporary, short-term boost to the state economy, preserving the Permanent Fund as an endowment provides ongoing support for the state economy and benefits future generations. Likewise, investing the remaining EVOS funds, rather than spending everything down to zero over the next few years, could support activities for the foreseeable future. Since restoration and recovery efforts are likely to be incomplete, it makes sense to extend the life of the remaining assets so they can provide funding for years to come. Ideally, the fund’s remaining money could continue to grow over time and invest in the region in perpetuity.

A component of this proposal is a dedicated fund to support scientific research on the marine ecosystems, fish, wildlife, and human services affected by the spill. Research ideas would be vetted through a rigorous peer-review process that would evaluate the project’s scientific merit and its implications for spill-affected regions. There is still much to be learned about ecosystem restoration, and sustainable funding is critical. In a complex and dynamic environment, it is challenging to distinguish the effects of the oil spill from other factors that may also impact recovery. Long-term, continual support for research and monitoring is essential for restoring a healthy ecosystem and the services that depend upon it. The resolution coming up for a vote in January 2021 to combine the habitat and research sub-accounts could reduce this research support.

The revised structure proposed by the EVOS Think Tank of Citizens is a sensible option that will ensure that restoration and recovery efforts are not halted prematurely and create a sustainable revenue source that will allow these efforts to continue. If there were ever a time for Alaskans to consider a sustainable path forward in the spill-impacted region and the mechanics of providing support for future generations, that time is now.

The EVOS comment deadline on the four resolutions is Dec. 16. Learn more and submit a public comment here: https://www.newvisionforevos.org/evos-public-comment

James Murphy, Ph.D., is the Rasmuson Chair of Economics at the University of Alaska Anchorage. Prior to arriving at UAA in 2006, he was on the faculty at the University of Massachusetts Amherst. He received his Ph.D. from the University of California Davis and studied experimental economics as a pre-doctoral fellow at the University of Arizona. As part of a university partnership to develop a new experimental economics program in China, he is also a visiting professor at Nankai University and Chairman of their new Nankai Vernon L. Smith Experimental Economics Laboratory.

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