State Drafts Settlements in Three Longstanding Pollution Lawsuits

Tom Johnson | September 21, 2017 | Energy & Environment
Critics contend state is pushing to settle decade-old cases now, before possible constitutional amendment blocks funds from being diverted

Credit: Joe Loong
ExxonMobil's former Bayway refinery in Linden
Since August, the state has reached draft settlements with three oil companies who have agreed to pay nearly $200 million for contaminating water with a potential human carcinogen.

The state Department of Environmental Protection’s actions under natural resources damage lawsuits could end a decade of litigation that began back in the Corzine administration over an additive to gasoline often found in groundwater.

The cases involve a lawsuit filed against 50 companies in 2007 alleging they were responsible for polluting state waters with the gasoline additive, methyl tertiary butyl ether (MTBE). The DEP has found MTBE, a potential human carcinogen, at high doses, at over 6,000 sites.

In bringing the suits, the state seeks to recover costs for the spills and restoring the natural resources damaged by the pollution. In recent years, however, that money has not always been targeted for that purpose.

Significant juncture

The proposed settlements are being finalized at a significant juncture. In November, voters will be asked to pass a constitutional amendment prohibiting money from such lawsuits from being diverted away from cleanup and restoration of natural resources.

The question was put on the ballot after the Christie administration repeatedly dipped into large settlements from similar lawsuits, using the money to help balance the state budget. The most recent occasion involved the attempt to shift the bulk of a $225 million settlement between the state and ExxonMobil, stemming from pollution at two refineries once owned by the company and other sites.

In the case of the more recent settlements, some environmentalists fear the Christie administration is quickly settling the cases so that it could tap the funds before the constitutional amendment preventing any diversions is approved, if voters decide to pass the question.

“The cases are 10-years old and there is now a rush to settle them,’’ argued Jeff Tittel, director of the New Jersey Sierra Club, which is challenging the ExxonMobil settlement in court. “They are trying to grab every dollar they can before the constitutional amendment goes into effect.’’

Larry Hajna, a spokesman for DEP, disputed that notion, saying the state has been litigating the cases for years. The attorney general’s office did not respond to questions in an email.

According to state officials, the settlements that have been proposed will result in an outstanding outcome for the State of New Jersey and have been recommended by the federal mediator for these cases, outside counsel for the state, and experts within the Department of Environmental Protection.

‘Last-ditch effort’

But Ed Potosnak, executive director of the League of Conservation Voters of New Jersey, said it would not surprise him to see a “last ditch effort’’ to close the cases before the ballot question goes before voter.

“It makes the constitutional amendment all the more important so that politicians cannot raid the cookie jar once again,’’ Potosnak said.

In the most recent settlements, Shell agreed to pay $68 million, BP America, $64 million, and Sunoco, $64 million for damages related to the MTBE contamination. Prior to the August 21 posting of a draft settlement with BP America, the last case involving the pollutant was tentatively settled in February of this year.

MTBE was an additive to gasoline approved by the federal Environmental Protection Agency in 1979 to help make the fuel burn cleaner and lower carbon monoxide emissions from vehicles.

When the additive repeatedly was found in groundwater, companies began switching to using ethanol, eventually phasing out MTBE by 2005.

The three draft judicial consent orders between the state and the oil companies are posted on the DEP website. The most recent, involving Sunoco, was published Monday in the New Jersey Register. The public has 60 days to comment on the proposal.