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When the Exxon Valdez ran aground in Prince William Sound, it spilled over 11 million gallons (41.8 million liters) of crude oil, the largest single spill ever released in U.S. coastal waters. The spill occurred late in the evening of March 24, 1989. The ship left Port Valdez, Alaska, under the command of Captain Joseph Hazelwood. After leaving port, the captain left the bridge in charge of a third mate who was not licensed to operate in that particular area of Prince William Sound. The ship, having turned into the inbound shipping lanes to avoid ice from nearby glaciers, was supposed to return to the outbound lanes. For several reasons, including missing navigational markers and failing to disengage the ship's autopilot—the ship turned too late, and, just after midnight Alaska Time, the ship struck Bligh Reef, a well-known navigation hazard.

Attempts were made to clean the oil on Prince William Sound's rocky beaches, but vestiges still remain today.

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While Exxon and the Alyeska Pipeline Service Company—the firm established to build the transAlaska oil pipeline—sought to respond to the spill, the sheer volume of oil was simply too great to be contained. Compounding the problem was Alyeska's failure to maintain oil spill response equipment and material in the area, despite their promises to do so. This was made clear in initial media reports and was confirmed in later investigations; almost immediately after word of the spill reached the world, the news media converged on Prince William Sound, beaming pictures of oiled beaches and wildlife to a shocked and angry public. The spill served to mobilize environmental, fishing, and allied groups in efforts to enact more stringent regulation of oil tankers, and to enhance preparation for oil spills. For many of these interests, the Exxon Valdez spill was an event that had long been dreaded, and because of the impact of the spill on wildlife and fisheries, groups that had been suspicious of each other's motives were brought together in a common cause: anger at Exxon and a desire for some sort of compensation.

In the immediate aftermath of the spill, attempts to contain the oil were minimally successful. Exxon hired contractors who attempted to clean beaches of oil by using absorbent rags, and sometimes using superheated water, which may have done nearly as much damage as the oil itself. Even today, vestiges of the Exxon Valdez oil spill can be seen along the rocky beaches of Prince William Sound and southcentral Alaska. The actual environmental effects of the Exxon Valdez spill are not fully known. Many otters and birds were killed by oil, and the salmon fishery was largely ruined for 1989 because of fears that any catch would be tainted by oil. The salmon have since recovered, but the very important herring fishery has never returned to pre-spill levels, although it is not clear whether the decline in herring was due to the oil spill. The oil spill had obvious socioeconomic consequences. Nearly the entire commercial fishing fleet in Cordova, the main fishing port in PWS, was idled by the spill, and while some fishers were able to lease their boats to Alyeska, many felt personal or community pressure to not take money from Exxon. Estimates of the economic impact of the spill ranged from $6 million to $43 million; longer-term impacts were higher.

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