A massive oil spill blankets the sea, threatening birds, fish and the local economy. The company responsible assures the country that the impact is small, and a top executive promises financial compensation. But soon after, the business garners condemnation for its lackluster response.
That was Exxon 21 years ago. Despite initially appearing to react differently, London petroleum giant BP PLC after its April 20 oil spill fell into many of the same public relations mistakes as Exxon did in 1989, according to corporate crisis experts.
As a result, they said, BP likely faces a similar black eye, one that will last decades. The company already has taken a massive financial hit. BP's stock yesterday fell to a 14-year low and has lost $95 billion, or half its market value, since the Deepwater Horizon explosion.
"BP is going to be first and foremost in people's minds when it comes to poor crisis planning and response," said Timothy Sellnow, communication professor at University of Kentucky and author of several books on public relations in a crisis. "They've surpassed Exxon.
"They tried to do more and learn some from Exxon," Sellnow added. "Their message has not resonated."
Until the BP spill, the Exxon Valdez accident ranked the largest U.S. oil spill. The Valdez oil tanker smashed into Alaska's Prince William Sound reef and disgorged nearly 11 million gallons of petroleum. BP's spill has already eclipsed that record, and no one knows just how bad this disaster will become.
Since the April 20 explosion of the Deepwater Horizon rig that BP leased, the company has focused on stopping the spill and communicating its actions, said Andrew Gowers, BP's head of group media. There have been obstacles to both goals.
"Our approach was to do the right thing in terms of the response and explain ourselves to the best of our ability," Gowers said. "We are in the eye of a political storm. In such circumstances it's not always easy to get your message across.
"The media focus has been so intense," Gowers added, "it's been a challenge to respond as fully as we would like on every issue."
Gowers declined to talk about Exxon or whether BP attempted to act differently from that company after its Valdez spill.
Exxon has long been considered the archetype of how not to behave following a business crisis, several analysts said.
"In general, Exxon is known as a failure, as a profound failure in crisis communication," said Matthew Seeger, chairman of Detroit-based Wayne State University's Department of Communications and author of the book "Communication and Organizational Crisis."
"Obviously, the company survived, and it's profitable," Seeger added. "But its reputation and its image will be forever linked to the Valdez oil spill."
Exxon, now Exxon Mobil Corp., declined to comment on how it approached the Valdez incident.
BP's oil disaster is in many ways dramatically different from what Exxon encountered with Valdez. That spill happened in a remote area of Alaska, while the BP spill occurred in the Gulf of Mexico near the populated Louisiana coast.
The spill part of Exxon's disaster ended quickly. BP's well, by comparison, has been gushing oil since the rig explosion in the Gulf of Mexico. Only in the past week has the company succeeded in capturing some leaking petroleum.
The Valdez spill also transpired in a vastly different technological environment. The Internet was in its infancy. While daily newspapers, television and magazines carried news of the Exxon spill and its aftermath, there were no blogs and social media platforms containing constant updates and personal accounts and photographs. Cell phones were not widely available.
BP's spill occurred in the world of 24/7 news, blogs, tweets, status updates and niche-media.
"It's so immediate today," said Bob Kenney, principal at Context Marketing, a consulting firm that advises on consumer behavior. "To read the blogs, the visual imagery is much stronger and more frequent and unrelenting.
"Today we're much more involved in the lives of people in disasters," Kenney said. Companies involved, as well as the government, he said, have "days, not weeks, now to address issues."
After the Deepwater Horizon rig sunk, BP appeared eager to jump in front of the crisis.
BP helped set up a Louisiana command center. CEO Tony Hayward claimed the company's responsibility and said it would pay all "legitimate" claims for damages.
Although Exxon over the past 20 years fought how much it would pay in economic costs, that company also initially made statements about compensating those with damages. In 1989, Exxon executive Don Cornett, according to numerous media reports, vowed that the company would help those affected by the spill.
"We will consider whatever it takes to make you whole," Cornett said at the time, as seen in a clip from the documentary "Black Wave, Legacy of the Exxon Valdez." "You've had some good luck and you don't realize it. You have Exxon, and we do business straight."
There already are questions about how much BP will pay in damages. Despite Hayward's media statements about taking care of legitimate claims, Hayward privately rejected committing to paying all economic damage claims, Sen. Bill Nelson (D-Fla.) disclosed after the two met in April (E&E Daily, April 5).
There currently is a $75 million cap for economic damages connected to an oil spill, but two Democratic senators are pushing legislation that would eliminate that limit (E&E Daily, June 9).
BP also hit controversy as it offered to pay fishermen $5,000 while asking them to sign waivers agreeing not to sue BP. The company has since said that was a "misstep."
Both Exxon and BP made a public relations error in emphasizing science over people, Sellnow said.
After Exxon's spill, he said, the company blamed Alaska for not allowing the use of dispersants to stop the oil from spreading. Exxon said that was the reason the oil hit the shore, Sellnow said.
"They tried to excuse themselves and distract the criticism," Sellnow said of Exxon.
Reporters largely ignored that scientific argument and instead targeted the stories of people, said Kathleen Fearn-Banks, communications professor at University of Washington and author of the book "Crisis Communication, A Casebook Approach," which examines the Exxon Valdez spill.
BP also focused on science and engineering, Sellnow said, talking about how it planned to stop the oil spill. While that was understandably an emphasis, he said, it created a public relations problem.
"The primary story throughout the process became the solution of the week," Sellnow said. "As each of these solutions failed to work, the urgency (to stop the leak) went up.
"From a public relations standpoint the story got away from them and became one of science and became one of consistent and persistent failures," Sellnow added. In the process, he said, the company failed to show compassion for people early on.
"A scientific explanation to someone whose livelihood is threatened is of very little merit," Sellnow said. "They want to know, what are you going to do to compensate me.
"You can't win the hearts and minds of people by solely emphasizing science," Sellnow added. "You need to show a concern for the people and their needs."
BP focused on "aggressively responding," Gowers said, adding that the "massive scale of the containment effort was the initial focus" but that the company did not lack concern for people hurt by the spill.
"If that was the perception, it is regrettable, but it's certainly not the intent," Gowers said. "We take this incredibly seriously, and we're devastated by the consequences."
BP has been quick to pay economic damage claims, he said, even to people who lacked appropriate documentation. To date, he said, BP has paid $53 million in claims and spent $1.25 billion on responding to the spill.
Both BP and Exxon tried to shift blame, analysts said.
Exxon after the Valdez spill blamed the tanker's captain, Joseph Hazelwood, Seeger said. Hazelwood was accused of being drunk at the time of the crash but was acquitted of that charge at trial. The crash, spill and cleanup morass was a "systemic failure," Seeger said.
Exxon before the Valdez crash, he said, had waged a public relations campaign persuading the Prince William Sound community that it was safe to drill and export oil from the area. As a consequence, Seeger said, there was a failure to accept that disaster could happen and prepare for it. Equipment that would later be needed for cleanup had been taken out of the area, he said.
"They also blamed the public," Seeger said, adding that then-Exxon CEO Lawrence Rawl, who now is deceased, said that everyone who drives a car was responsible for the oil spill.
Early on, BP's Hayward told CBS's "The Early Show" that "this is not our accident," because the rig was owned by Transocean Ltd. He did, however, say at the time that, "it's our responsibility."
Hayward also told Forbes that "the real issue is the failure of the safety equipment," referring to the blowout preventer, which was not handled by BP.
"What we have said very clearly is that it is a very complex accident with multiple causes," Gowers said, adding that "you can infer from that multiple mistakes." BP did point out, he said, that the rig that exploded was owned and operated by Transocean.
In the intervening weeks, Gowers said, BP has "filled in detail" and "presented a more complex and nuanced picture" of what occurred.
Exxon and BP also underplayed the impact of the spills, Seeger said. Exxon's CEO at the time said that the environmental impact of the Valdez oil would be small.
BP's Hayward after the spill told London's Guardian newspaper on May 14 that "the Gulf of Mexico is a very big ocean. The amount of volume of oil and dispersant we are putting into it is tiny in relation to the total water volume."
He also told British TV station SkyNews on May 18 that the "the environmental impact of this disaster is likely to have been very, very modest."
There have been accusations that BP underplayed the amount of oil that has been spilled, with initial estimates saying that 1,000 to 5,000 barrels a day were flowing out. There are now some estimates that it could be as high as 100,000 barrels per day.
BP's Gowers said that the 1,000 and 5,000 barrel numbers "were not BP estimates" but rather came from the incident's Unified Command, which included BP but also the U.S. Coast Guard and government agencies. The current estimates are not BP numbers, he said.
"If an estimate starts out at one level and turns out being higher, that is not a good thing," Gowers added.
Journalists also have charged that BP blocked access to the site. Gowers said that is not accurate.
"We've had to balance in this allowing access and not allowing intense journalistic interest to interfere with the cleanup efforts," Gowers said.
BP yesterday sent a letter to Unified Command incident commanders clarifying that people are free to talk to reporters if they wish.
"BP has not and will not prevent anyone working in the cleanup operation from sharing his or her own experiences and opinions," wrote BP Chief Operating Officer Doug Suttles. "However, while individuals should feel free to speak openly on their own behalf, they are not authorized to speak on behalf of BP or the Unified Command."
The CEO of Exxon in 1989 and BP now became public relations liabilities, communications experts said.
Exxon CEO Rawl in 1989 decided not to go to the Valdez spill site, which likely compounded the company's image problems, said Fearn-Banks.
"A lot of people think if the CEO had come to Valdez and cried when he saw the birds, that would have changed everything for Exxon for years," Fearn-Banks said.
Hayward has made a number of gaffes, including the remark about the size of the Gulf and lamenting to the "Today" show on May 31 that, "there's no one who wants this over more than I do. I would like my life back." He later apologized for that comment.
Hayward might not have too many positive options, Fearn-Banks said.
"As long as the oil is there, as long as it's still gushing, I don't think there's anything he can say that's really going to make people feel good," Fearn-Banks said.
BP has run ads in which Hayward apologizes for the spill and promises, "we will get it done. We will make this right." But even that falls flat, Seeger said.
"It creates the impression that the company is disingenuous," Seeger said. "It creates the perception that the company is more concerned about its image than the cleanup."
BP struggled as it was unable to stop the spill and days stretched into weeks and now nearly two months. Interior Secretary Ken Salazar and President Obama demanded answers, with Obama on Monday saying that he wanted to "know whose ass to kick" over the disaster.
"The company has been overwhelmed and all of the blunders they have made has made it difficult for them to come up with a public relations strategy," Seeger said.
The drumbeat of failures as the company tried repeatedly to cap the spill drowned out its public relations message, he said.
"I don't know how anyone could create an effective message given the stream of technical failures that we've seen."
Meanwhile BP failed to answer obvious questions "in a compelling manner," Sellnow said, such as, "If you can't plug the hole, then really what are you going to do that I can have confidence in?"
The inability to stop the leak for so long "has really conditioned the atmosphere in which this is unfolding," Gowers said. "It's just been a very unfortunate saga and frustrating for everyone involved, including us."
While BP has struggled with stopping the leak, Exxon's initial woes came over cleanup. That petroleum company belonged to a consortium responsible for removing the oil. But Exxon and that consortium argued for days about how the petroleum would be removed. Meanwhile it spread, killing wildlife, Fearn-Banks said. BP was part of that consortium in 1989.
In this spill, BP "whether intentionally or not, they over-reassured the public that they could plug the well," Sellnow said. "They failed to acknowledge the uncertainty of the situation."
That created the question in people's minds, Sellnow said, of "'If you didn't have an adequate plan in place should there be a failure of the system, why were you drilling [so far down]?' In the court of public opinion they haven't answered that question adequately."
Public relations experts say it appears both Exxon and BP failed to follow the first rule of crisis communications: having a plan in place to deal with a potential disaster.
"BP never had a plan in place for the worst-case scenario or they would have put it in place," Fearn-Banks said. "I don't think it's a question of money. ... They absolutely don't know what to do at all."
The company already had developed a reputation for taking inappropriate risks. A 2005 explosion at BP's Texas City Refinery killed 15 people. Between 2006 and 2008, three workers died at the Texas City refinery in three separate incidents.
"That's what a company is supposed to do is plan for a worst-case scenario," Fearn-Banks said.
Preparing for this disaster was not possible, Gowers said. As Hayward has stated, Gowers said, the disaster was "a completely unanticipated event. It required multiple systems to fail to happen.
"The industry has been drilling safely in deep waters for over 20 years and now is having to rethink everything," Gowers said.
In the months after the spill, Exxon helped turn around its image when it "focused on the cleanup and stopped trying to minimize their failures or the severity of the spill," Sellnow said. Exxon involved the community in the cleanup, he said.
It is not clear yet whether BP could do something similar he said, because of concerns about vapors.
BP's current inability to dig itself out image-wise in some ways helps Exxon, a few analysts said.
"The people at Exxon must be sharing champagne right now," said Fearn-Banks. "They're not the worst company in the world right now. It's BP."
Seeger said that "it helps Exxon that it will no longer be at the top of the list," in terms of the country's worst environmental disaster.
But at the same time, Exxon and oil companies are hurt by BP's spill and public relations stumbles.
"My sources tell me the entire oil industry is profoundly angry at BP for how they've managed these events," Seeger said. "The entire industry becomes tarnished."
Disasters leading to death and environmental mayhem trigger shifts in the public policy agenda, Seeger said.
"There will be new regulations," Seeger said. "There will be a push for alternative energy."
But BP likely will survive, as did Exxon, Seeger said.
"Oil's a good business to be in. It's very profitable," Seeger said. "There's no direct relationship between a crisis and the ability of an organization to be profitable."