Alaska Oil-Spill Settlement Near

LINGERING reminders of the 1989 Exxon Valdez oil spill - thousands of pages of documents filed in some 220 lawsuits involving 350 plaintiffs - clutter the state and federal courthouses here. But with the approach of Exxon Corporation's April 10 criminal trial on five federal charges stemming from the spill, lawyers working for the oil giant, the federal government, and the state of Alaska have been furiously negotiating a settlement.

In Washington, D.C., March 11, a federal judge said he will allow the government to settle legal claims over the oil spill if it guarantees it will not harm the rights of native Alaskan villages.

Alaska Gov. Walter J. Hickel, in Washington to attend a hearing held by United States District Judge Stanley Sporkin, told reporters he believed a settlement can be reached within days.

Judge Sporkin said he would lift an earlier order delaying settlement activity and allow a settlement to be signed if both sides agreed on a court order intended to protect the villages' rights.

Such an order should declare that any agreement does not preclude the native Alaskans from pursuing their own claims against Exxon in federal court in Alaska, Sporkin said. He also said he would review any settlement that is signed to make sure it protects the villages' rights, and added he would consider transferring the case to a federal court in Alaska.

Governor Hickel, an independent, started pushing for a settlement soon after he took office on Dec. 3. Envisioning a "marine conservation park" in soiled Prince William Sound, he suggested $1.2 billion as a figure to get negotiations started. Exxon rose to the bait, said Alaska Attorney General Charles Cole.

In the past few months Governor Hickel, Mr. Cole, and top Exxon officials have traveled to Washington repeatedly to hammer out settlement details with officials of the US Environmental Protection Agency and the departments of Interior, Justice, Commerce, and Agriculture.

While the idea of settling the state's suit is widely endorsed in Alaska, the terms agreed upon by Cole, Exxon, and federal officials are drawing howls of protest from Alaskans who say Exxon will get off the hook for the nation's worst oil spill. Settlement terms call for the $1.2 billion payment to compensate for natural resource damages. The payments would be spread over a decade or more, thus reducing the net present value to about $600 million, critics point out.

"For the people who live in that area and saw what happened - no, it's not enough, especially if it's spread out over the number of years that they're talking about," says State Rep. Gene Kubina (D) of Valdez. The terms also earmark $160 million of Exxon's first payment as reimbursement for state and federal spill cleanup costs already incurred; still more of the payments would be dedicated to unfinished cleanup of Exxon Valdez oil instead of long-term environmental restoration.

That is not what Rick Steiner had in mind when he first suggested, more than a year ago, that the state dismiss its lawsuit in exchange for a $2 billion Prince William Sound restoration fund. Mr. Steiner, a fisherman, marine biologist, and environmentalist from the Prince William Sound town of Cordova, says a fund could stem the alarming pace of timber clear-cuts on the already-injured shorelines. The state should use settlement money to buy back development rights, halting logging and other encroachmen ts on Prince William Sound, he says.

State lawmakers are pondering at least two bills that would give the legislature veto power over any Exxon Valdez settlement. Disagreements over the settlement have worsened a chilly relationship with Hickel.

Most angry about the proposal have been Alaska natives living in areas fouled by Exxon oil. On March 7, Judge Sporkin suspended for 10 days any Exxon-Alaska settlement not approved by the native villages and their corporations.

In the March 11 hearing, the judge expressed skepticism about the request by five native Alaskan villages to give them a say in any settlement of the Valdez claims. He asked why the villages do not pursue their claim in state court, where they have filed a damage suit against Exxon.

"The [state] government tells me that in no way are they going to affect your rights," he said. "There's nothing there that will allow the government to eliminate your lawsuit 201> in Alaska."

If the villages disagree with any settlement that is reached, they may protest during a 30-day public comment period before it becomes final, the state government said.

The natives own land and pursue a subsistence hunting, fishing, and gathering lifestyle.

The head of one native group said Hickel should heed those criticizing the settlement proposal. But Cole says the critics' demands are unrealistic. Exxon would bolt from the negotiating table, he says, if pressed to pay $1.2 billion up front.

Even Hickel's "marine conservation park" plan, which included use of settlement money for roads, lodges, and other tourist amenities disintegrated in the light of federal law.

Just what the settlement negotiations mean for Exxon's upcoming criminal trial on charges of illegal pollution and unsafe waterways practices is debatable.

Cole says the settlement talks include no consideration of the criminal case, even though it is the only federal legal procedure taken against Exxon so far. He insists the state's settlement will do nothing to harm the remaining lawsuits filed in the wake of the spill, including the state's suit against Alyeska Pipeline Service Company, operator of the trans-Alaska pipeline and its Valdez marine terminal.

But Steiner and others believe Exxon and the oil industry hope to dispose of the criminal case so they can start with a clean public-relations slate on development in the Arctic National Wildlife Refuge and elsewhere in the arctic. "They don't want this criminal stigma, obviously," Steiner said.