State Senate Moves on Several Fronts to Block Exxon Mobil Settlement

One panel releases resolution condemning Christie administration’s drastically reduced payout in $8.9B case

Credit: Joe Loong
ExxonMobil's former Bayway refinery in Linden
The state Senate yesterday tried to quash on several fronts a controversial settlement that would resolve an $8.9 billion pollution suit against Exxon Mobil Corp. for $225 million.

The Senate Budget and Appropriations Committee approved a bill (S-2791) that would ensure one-half of the money recovered for environmental damages from waste sites would have to be used for restoration and cleanup. The move, if approved, would prevent most of the settlement money going to plug holes in the state budget.

That sort of diversion has happened in the past, most recently in a case involving dioxin pollution in the Passaic River. Of a $190 million settlement, $140 million was allocated to the general fund, instead of to restoring the river.

The Legislature sought a similar provision in last year’s state budget, but it was blocked by Gov. Chris Christie.

Earlier in the day, the Senate Environment and Energy Committee adopted a resolution (SCR-158) that condemns the proposed deal, a measure legislators hope will influence a judge hearing the case to reject the settlement and impose higher damages on Exxon.

Both measures were introduced and referred to the two committees only yesterday, an indication of how much the proposed settlement has become a point of dispute between the Democratic-controlled Legislature and Republican administration. Whether either bill will help unravel the settlement is unclear.

The controversy surrounds a tentative decision by the Christie administration to settle an 11-year-old case brought against Exxon over extensive pollution problems at two former refineries it operated in Linden and Bayonne for a fraction of the $8.9 billion the state originally sought.

Under terms of the settlement announced last week by the attorney general’s office, the deal would not only apply to the two refineries in north Jersey, but also to another one owned by Mobil in Paulsboro before it was acquired by Exxon in a merger deal, as well as 16 other facilities and hundreds of retail gas stations owned by the combined companies.

Since the proposed settlement was first reported in the New York Times early in March, the deal has led to enormous criticism from both lawmakers and environmentalists.

“I think the state is being shortchanged,’’ said Sen. Bob Smith (D-Middlesex), the chairman of the Senate Environment and Energy Committee and a cosponsor of the resolution.

The Christie administration has defended the proposed deal, calling it six times the size of the next comparable pollution case. Exxon Mobil also will be held responsible to pay cleanup costs at the refineries and other sites, according to the administration.

Lawmakers and others disputed that claim, saying the massive contamination at the sites, mostly at the Bayway refinery, which has operated for more than a century, may not end up being removed, but merely capped. The refinery, a familiar site along the New Jersey Turnpike, has left marshes covered with a tar of petroleum products and groundwater and soil contamination.

“This has been a crime that’s been playing out for a century,’’ said Greg Remaud, deputy executive director of the New York and New Jersey Baykeeper, an organization that is trying to restore waterways in the region.

Sen. Ray Lesniak (D-Union), one of the more vocal critics of the proposed settlement, said the real value of the settlement could be less than that because it could absolve the oil company for responsibility for other contaminated sites in New Jersey. “This deal smells worse the closer we look,’’ he said in a statement.

But Sen. Kevin O’Toole (R-Essex) said it is premature to decide on the merits of the settlement, noting numerous other cases involving so-called natural-resource damages that were settled for a total of $30 million, echoing a rebuttal from the Christie administration. Natural-resource damages are sought to restore marshes, wetlands, and waterways damaged by pollution — above and beyond the cost of cleaning up the contamination.

Under the terms of the natural-resources damage suit filed by the state Department of Environmental Protection in the Exxon case, however, it projected the cost at $8.9 billion.

“We clearly have lots of work to do in restoration,’’ said Tim Dillingham, executive director of the American Littoral Society, who decried the proposed settlement as setting a bad precedent for the state.