ASHLAND OIL INC. OIL SPILL AT FLOREFFE 1988
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 long run and does not reflect good corporate citizenship" (Patrick F. Noonan, "The 'Green' Director (Environmental Policy of Corporations). (Special Report: Business Enters the New Millennium. 13 Corporate Board S2 (Jan.-Feb. 1992)). As for Ashland Oil's advance preparations for the crisis of January, 1988, CEO John Hall said, "we didn't have a team, and we didn't have a plan" (John R. Hall, "In the Jaws of a Crisis," 15 Directors & Boards 17 (Summer 1991).
The primary l...