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The New York Times: Shell Agrees to Pay $19.75 Million for ’88 Spill Off San Francisco


Published: December 1, 1989

LEAD: The Shell Oil Company has agreed to pay $19.75 million for spilling more than 400,000 gallons of crude oil into San Francisco Bay last year.

The Shell Oil Company has agreed to pay $19.75 million for spilling more than 400,000 gallons of crude oil into San Francisco Bay last year.

The pact on payment was announced Wednesday, and the payments are to be made to the Federal and state governments and a number of municipalities. The payments will include almost $11 million to restore marshland and acquire other wetlands around San Francisco Bay.

Shell says it has spent an additional $14 million in cleaning up the spill, when oil flowed from a pipe at its Martinez refinery in April 1988.

Biggest Ever, U.S. Aide Says ”This is the largest recovery ever, to my knowledge, for damages to natural resources,” said Richard B. Stewart, Assistant United States Attorney General, who heads the land and natural resources division in the Justice Department. The department is one of 16 Federal, state and local agencies in the case.

Mr. Stewart also said he would favor ”proportionate” treatment for the Exxon oil spill in Alaska, which was many times larger.

A Shell Oil spokesman, Bill Sharkey, said the company regretted the spill and considered the settlement ”fair and equitable.” A Habitat Was Ruined
In the Shell spill, oil leaked out of a broken drain line in a 12.5-million-gallon storage tank at the manufacturing complex 40 miles northeast of San Francisco.

The Government said Shell left sewer valves open, allowing oil to discharge past a levee that surrounded the tank and flow directly into the water, and several Federal regulations were broken.

The spill continued for a day, pouring into Carquinez Strait, through which salmon were migrating, and coating the adjoining 100-acre Peyton Marsh. At least 250 birds and 50 other animals were found dead and a valuable wildlife habitat was ruined.

Long Recovery for Marshes

State Attorney General John Van de Kamp said Shell was able to skim off 300,000 gallons of oil and clean up many areas, but tidal marshlands would take another 10 years to recover.

He said the loss of those lands should be offset by the acquisition of new wetlands under the settlement. State and Federal officials will decide the location of the lands, but Mr. Van de Kamp said they should be mainly in the area of the spill. Bigger Penalty Seen for Exxon

WASHINGTON, Nov. 30 (AP) – A Justice Department official suggested today that the Shell payments meant that the Exxon Corporation would face even larger civil penalties for its spill off Alaska last March.

Deputy Assistant Attorney General George Van Cleve of the department’s land and natural resources division said he could not speculate on the size of fines that might be sought against Exxon because the case was under active investigation.

Mr. Van Cleve emphasized, however, that Exxon’s 11-million-gallon spill in Prince William Sound was far more serious than Shell’s spill of 400,000 gallons.

Mr. Van Cleve said the $11 million was ”the largest natural resources damage recovery” for an oil spill in American history. The total payment of $19.75 million also is the largest overall settlement in an oil spill case, said David Buente, chief of the environmental enforcement division at the Justice Department.

Mr. Van Cleve was responding to questions about Mr. Stewart’s remark in announcing the Shell settlement that he would favor ”proportionate” treatment for Exxon.

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