Fine Print: Making Sure Environmental Awards Go to the Environment

Tom Johnson | March 7, 2016 | Energy & Environment
Bill being voted on today in an Assembly committee would make sure that half of environmental settlements can’t be diverted to general budget

Credit: Joe Loong
ExxonMobil's former Bayway refinery in Linden
It was one year ago last week that the Christie administration raised a firestorm of protest when it announced the settlement of a long-running pollution case involving former refineries operated by ExxonMobil. Although the state initially sought $8.9 billion in natural-resources damages stemming from the pollution of wetlands, marshes, and water at the facilities in Linden and Bayonne, the administration reached a deal to settle with the company for $225 million.

But that settlement has hardly resolved the matter; it is being challenged in a state appeals court by a prominent legislator and environmentalists. Further angering critics of the deal is the fact that much of the money will be used to balance the state budget, not restore damaged natural resources — unless they step up and convince the administration otherwise.

What’s at stake: A big chunk of the money recovered not only from Exxon, but also from other polluters who agree to restore natural areas damaged by their activities. A bill (A-2844) would ensure half of all money in excess of $50 million from such settlements would be deposited in a hazardous-discharge cleanup fund is up for a vote today in the Assembly Judiciary Committee, where its sponsor, Assemblyman John McKeon (D-Essex) is the chairman.

The history: Not promising for backers of the bill. A similar measure won legislative approval in the most recent session, but was conditionally vetoed by Gov. Chris Christie. In response, lawmakers drafted a constitutional amendment to prevent such diversions, but it never got far enough to be placed on the November ballot. That option is unlikely this term given other proposed constitutional questions already moving in the Legislature.

Why the issue is important: With its industrial legacy and thousands of hazardous waste sites identified by state environmental officials, the ability to recover money from polluters to restore natural resources is a valuable tool, particularly if an administration decides to pursue such litigation more aggressively.

What the Christie administration says: Administration officials have defended the settlement often, describing it as the largest deal with a single polluter in the history of the state’s natural-resources damage suits. So far, the courts have backed the administration in the appeals that have followed in the wake of the ExxonMobil settlement. The company remains on the hook for tens of millions of dollars, if not more, to clean up the pollution at its former facilities.

Why the issue won’t go away: The dispute is just one of many involving the administration and Democratic-controlled Legislature over direction of state policies. Lawmakers have revived numerous bills that failed to win approval from the governor in the past. So far, there has been little indication that their new efforts will be any more successful.