ASHLAND OIL INC. OIL SPILL

This case analysis discusses the legal and ethical aspects of the situation faced by Ashland Oil, Inc. ("Ashland Oil") as it attempted to come to grips with the crisis generated by the escape of diesel fuel oil from its storage tank near Floreffe, Pennsylvania in January 1988.

Ashland Oil was ill-prepared for the media blitz and other external pressures with which it was forced to cope as it sought to contain and cleanup the oil spill, which threatened the water supply in suburban areas south of Pittsburgh, caused water rationing in other areas, the evacuation of 1200 families, the closing of schools and factories, shut down commercial traffic on long stretches of the Monongahela and Ohio Rivers and endangered marine and wildlife in the region. Although the Floreffe oil spill was the largest inland oil spill to date in the United States, it was only one of a number of a series of catastrophic disasters involving the oil companies in the 1980s, the worst being the spill of nearly 11 million gallons of crude oil into Prince William Sound off the Alaskan coast in 1989 from the tanker Exxon Valdez. In commenting on that period, Patrick Noonan, a conservationist who joined the Ashland Oil Board of Directors in 1991, said, "in the past corporations often ignored environmental problems, hoped they never surfaced, and if they did, dealt with them after the fact. That kind of reactive strategy proves far more costly in the

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l storage operations so as to avoid unnecessary damage to the health and safety of the surrounding communities and wildlife but how far those obligations extended toward prevention of environmental problems. Not having anticipated the crisis at Floreffe, and faced with embarrassing disclosures concerning its own operations, ethical issues were posed relating to how much of the truth it should disclose and in what manner. b. Evidence. Ashland Oil clearly left decisions concerning the construction and safety of its oil storage tanks to lower levels, had not anticipated the problems that arose and had not prepared contingency plans to deal with them. Scrum, their manager of corporate media relations, said after surveying the site the day after the spill: "This is absolutely beyond what we ever dreamed had happened." In retrospect, one wonders why. What happened appears to be have been a logical consequence of the way the tank was fabricated and constructed. Today, the tank wouldn't meet EPA requirements and the company would have to have in place under the SPCC program detailed contingency plans, which it would be required to practice, for handling what in fact occurred. At some point corporate neglect becomes an ethical issue. As
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Approximate Word count = 3532
Approximate Pages = 14 (250 words per page)