Fine Print: Funding Projects to Restore Areas Around NJ Damaged By Pollution

Tom Johnson | July 28, 2015 | Energy & Environment
Garden State still lacks an effective mechanism to prevent money meant for environmental reparations from going to the general fund

Credit: Joe Loong
ExxonMobil's former Bayway refinery in Linden
If the Assembly does not return for a session by Monday, an effort to prevent the Legislature and Christie administration from diverting money collected from polluters who were found to have damaged natural resources will collapse — at least for another year. At this time, no session is scheduled, making it unlikely lawmakers will return from the summer recess in time to put a constitutional amendment on the November ballot to prevent such diversions. August 3 is the deadline for doing so.

What is at stake: The issue came to a head when the Christie administration announced a tentative $225 million settlement with ExxonMobil earlier this year, a deal still requiring court approval. The agreement stems from a decade of litigation brought by the state Department of Environmental Protection to restore wetlands, marshes, and other areas left polluted, primarily at refineries the company once owned in Linden and Bayonne.

What’s happened so far: After the tentative settlement was announced, the Legislature passed a bill that would ensure at least half of the money from natural resource damage suits would go to environmental purposes. That bill (A-4281) was vetoed by Gov. Chris Christie. In response, lawmakers drafted the proposed constitutional amendment (SCR-163). If approved by both houses of the Legislature, the proposal would go directly on the fall ballot for voter approval, bypassing the governor.

Why critics don’t like the deal: The state initially sought $8.9 billion from ExxonMobil in the lawsuit. Settling for a fraction of that amount has angered the state’s environmental community and many legislators. Some have sought to block the tentative settlement before the court rules on the agreement, which could come as early as this Friday. To date, the DEP and ExxonMobil have successfully blocked opponents of the tentative deal from intervening in the case.

[related]What the Christie administration says about the deal: In defending the settlement, the administration said the proposed agreement is the largest deal with a single polluter in the history of the state’s natural resources damage suits. If approved, it would not eliminate the company’s liability to clean up pollution at the refineries or other sites covered by the settlement, the state said.

What happens if the constitutional amendment is not approved: In all likelihood, not much of the ExxonMobil settlement will go to restoration of natural resources. As it currently stands, only $50 million will be used for restoration, while up to $40 million will go to an outside law firm hired by the state to litigate the case. The rest could be used to plug holes in the current fiscal year state budget, which ends next June.

Why that is likely: Past history. In last year’s state budget, the Legislature and Christie administration opted to shift $140 million from a natural-resources lawsuit to the general fund — the latest diversion of environmental funds to cover deficits in the state’s annual spending plan. More than $1 billion in Clean Energy Funds have been diverted in the past six years.