Exxon Pays Fine for Valdez Oil Leak Near Bay : Environment: In settling Coast Guard complaint for $1,000, firm denies liability for 10-mile slick.

Exxon Shipping Co. has paid a $1,000 civil penalty to settle a complaint filed by the U.S. Coast Guard after the damaged tanker Valdez leaked oil near San Diego Bay last summer, Exxon officials confirmed Friday.

But, in a January letter that accompanied the $1,000 check, Exxon denied that the company is liable in any way for the 10-mile oil slick and smaller sheens that appeared in the waters around San Diego as the tanker was awaiting approval to enter a local shipyard for repairs.

“By making this payment, Exxon Shipping Co. does not admit liability for any purpose or admit any issues of fact or law or any responsibility for the alleged release or discharge of oil or any hazardous constituent thereof, if any, into the environment,” said Michael C. Quinn, Exxon Company USA’s Western area public affairs manager, quoting from the Jan. 5 letter.

“We don’t admit that we did anything wrong,” Quinn added.

Coast Guard Cmdr. Scott Porter said, however, that the Coast Guard is satisfied that Exxon violated federal law when it left about 8 barrels--320 gallons--of Alaskan North Slope crude residue in the water.

“The fact that we assessed a penalty shows that there was a discharge of oil in a harmful quantity in the navigable waters of the United States,” Porter said. “They’re denying liability, not admitting they did it, but saying they’ll pay the fine. To me that is some admission of a violation of the Clean Water Act.”

The maximum fine for this size of oil discharge into U.S. navigable waters is $5,000. Porter said the $1,000 penalty was imposed because the amount of oil spilled was small and little or no environmental damage was evident. In addition, he said, the company’s response was considered appropriate, and its track record before the Alaska spill had been good.

The Valdez was towed to San Diego from Alaska, where it was the source of the largest oil spill in the nation’s history. After the Valdez tore open its hull in Prince William Sound last March, about 11 million gallons of crude oil poured into the water, damaging hundreds of miles of coast and killing thousands of birds and other wildlife.

When the Valdez arrived off San Diego in July, several sheens, one up to 10 miles long, were spotted near the ship, but Porter said the Coast Guard accused Exxon of one Clean Water Act violation because it considered the series of sheens to be one continuous spill.

At that time, Exxon Shipping Co. President Frank Iarossi denied that the tanker was responsible for the slicks.

“I’m denying the Valdez spilled oil (off San Diego),” Iarossi said then. “There was no oil on that ship.”

Before the tanker was towed to San Diego, remaining oil in its cargo holds was transferred to another ship, and its interior then was scrubbed to try to eliminate residual oil.

Company officials contended that the substance that leaked from the Valdez off San Diego was nontoxic “organic” material, possibly colonies of microorganisms that developed in the ship’s damaged tanks during its voyage to San Diego.

Concern over the discharges prompted the Coast Guard and state environmental officials to bar the Valdez’s bay entry until environmental and navigational problems could be resolved.

The ship remained at sea during the next three weeks while divers cut away huge metal slabs that had peeled downward from the hull during the journey from Alaska. The slabs would have prevented the ship from navigating San Diego Bay’s shallows.

The leaks eventually stopped and the tanker made a discharge-free transit of San Diego Bay on July 30 en route to the National Steel & Shipbuilding Co., where it is undergoing a $25-million repair job expected to be completed this summer.