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Christie Administration Blocked Public Scrutiny of NRD Settlements

Sunshine and Oversight Could have Exposed and Averted Exxon Disaster

Exxon is not the first Christie sweetheart deal with gross oil refinery pollution

In 2012, the Christie Office of the Comptroller rejected our Aug. 9, 2012 request to conduct a review of the performance of the DEP NRD program, see documents:

NEW JERSEY FUMBLING AWAY POLLUTION DAMAGES

Trenton — The State of New Jersey is forfeiting hundreds of millions of dollars in damages from polluters in contaminated groundwater cases, according to Public Employees for Environmental Responsibility (PEER), which has asked for a review of the program by the state Comptroller.   The state’s failure to adopt regulations governing how to calculate “natural resources damages” (NRD) for polluted drinking water has contributed to its inability sustain assessments against polluters. .

Our request was rejected without providing a justification, thus, it is plausible that the Administration just did not want transparency and public scrutiny of the performance of the DEP’s NRD program which might shed light on – or perhaps through sunshine – avoid clear abuses like the Exxon settlement.

Given the upcoming Judiciary hearing on the Exxon deal, that surely is newsworthy.

Additionally, thus far, media has not reported that the Exxon Bayway refinery was not the Christie Administration’s first sweetheart NRD deal with with an oil refinery.

On Jan. 25, 2011, we blasted that NRD refinery settlement too, see: DEP Cuts Deal With Sunoco Refinery

DEP issued a press release late today announcing a Natural Resource Damage (NRD) settlement agreement involving pollution from the Sunoco Coastal Eagle refinery in West Deptford (and 3 affiliated company facilities: EPEC Polymers Inc in Flemington; Nuodex Inc. in Woodbridge; EPEC Polymers Inc. in Burlington City).

There have been hundreds of spills and discharges at the Coastal Eagle refinery over many years, leading to significant soil and groundwater pollution, off site contamination, and adverse water resource, fisheries, wildlife and ecological impacts.

The deal is unusual and raises all sorts of red flags.

First is timing: the NRD Settlement was published over 3 months ago in the NJ Register, on October 18, 2010.

The opportunity for public comment expired in November – there was little public awareness and no public comment on the deal.

So why is DEP issuing a press release now, after the public comment period is closed? Why didn’t DEP issue the release 3 months ago, when it mattered and the public could have used the information and meaningfully participated?

To inject these facts and issues into the Assembly Judiciary Committee’s investigation, we just fired off this letter to Chairman McKeon.

Keep in mind that during yesterday’s Senate floor debate on the Senate Resolution opposing the Exxon deal, Senator O’Toole complained bitterly about the lack of facts on the NRD program. Senator Kean agreed that basic facts were lacking in the Senate’s deliberations.

Had the Christie Administration opened the books and the Comptroller conducted an investigation of the NRD program we recommended, those facts would be on hand right now – and the sunshine could have prevented the abuse we saw in Exxon deal.

Dear Chairman McKeon:

We have long been involved in monitoring the DEP’s Natural Resource Damage (NRD) Program.

We understand that on March 19, 2015, the Assembly Judiciary Committee will take

“testimony from invited guests on the proposed $225 million settlement agreement between the NJ Attorney General’s Office and ExxonMobil for the environmental damage caused by Exxon’s refinery operations in Bayonne and Linden.  A4306 Burzichelli (pending intro & referral) S685 Lesniak/Whelan (pending referral to AJU) and A4307 McKeon (pending intro & referral)”

I provide the following relevant information to assist that inquiry.

By letter of August 9, 2012, we petitioned the Office of the Comptroller to request a review of the DEP’s “Natural Resource Damage” (NRD) program. I wrote:

“I am writing on behalf of the members of Public Employees for Environmental Responsibility (PEER) to request your office’s assistance in addressing an environmental program that appears to be failing in its mission, jeopardizing state water resources andcosting taxpayers hundreds of millions of dollars. …

As we understand that the Office of the State Comptroller is an independent office created to bring greater efficiency and transparency to the operation of all levels of New Jersey’s government., we would request that your office review the performance of the NRD, the extent to which taxpayers are not attaining full NRD recoveries and methods you would recommend to put the program back on track and to make it more transparent and accountable.”

Since its inception in 1994, DEP’s Natural Resource Damage program has recovered more than $51 million and preserved approximately 6,000 acres of open space as wildlife habitat and ground water recharge areas as compensation for pollution resulting from 1,500 contaminated sites and oil spills. However, realization of these important potential economic and environmental benefits for the people of New Jersey of the NRD program is in jeopardy, as outlined in a recent Appellate Court decision.

On August 24, 2007, a state Superior Court dismissed with prejudice an attempt by the New Jersey Department of Environmental Protection (DEP) to recover a natural resource damage claim involving benzene and toluene contamination of private wells in the Hillwood Lakes area of Ewing Township. (N.J. Dept. of Envtl. Prot. v. Exxon Mobil Corp., Docket No. MER-L-2933-02 (N.J. Super. Ct. Law Div. Aug. 24, 2007)). The Court found that DEP did not follow the rule making process to establish, by regulation, a reliable formula for calculating natural resources damages. In the absence of regulations, the Court also found DEP lacked adequate scientific support to proceed on a case-by-case basis.

This March in the case of New Jersey Department of Environmental Protection, et al. v. Essex Chemical Corporation, the Appellate Division chastised DEP for failure to make a cogent claim for millions of gallons of groundwater contaminated during 8 years of leaking underground storage tanks.

 This line of cases puts in jeopardy the recovery of NRD at more than 120 sites and potentially cripples the ability of DEP to enforce the NRD provisions of New Jersey’s cleanup laws. In a time of fiscal crisis in State budgets, loss of these NRD compensation revenues is not acceptable.

 The absence of a regulatory undergirding for NRD has been known as a serious vulnerability inside DEP for a decade. In addition, the Christie Transition Report on DEP in January 2010 recognized the problem:

 “With respect to the State’s efforts to seek compensation for damages to natural resources (NRD), we recommend that…rules be adopted to provide transparency, certainty and consistency in the assessment of those damages.”

Unfortunately, this Christie Transition report recommendation for NRD regulations has yet to be undertaken, let alone implemented. 

Because so many contaminated sites and millions of dollars are at stake in this program, and because DEP’s mismanagement appears to be putting those benefits to state taxpayers and residents in jeopardy, we urge that your Office investigate this DEP program and make recommendations for improved performance, transparency and accountability. 

(read full letter:  http://www.peer.org/assets/docs/nj/8_9_12_Comptroller_ltr.pdf

Unfortunately, after expressing initial interest in pursuing an investigation, the Comptroller’s Office rejected our request with little explanation as to why.

As you know, during the March 16, 2015 floor debate on Senate Resolution opposing the Exxon settlement, Senator O’Toole complained loudly of a lack of information on the NRD program and whether it was performing well in prosecuting more than 4,000 cases filed during the McGreevey Administration.

Had the Christie Administration’s Comptroller conducted the investigation we requested, not only would legislators have good information right now, but the Exxon fiasco might  have been avoided.

We bring this information to your attention in hopes that you may consider it during the Committee’s investigation and deliberations on the Exxon deal.

Additionally, we raised similar concerns regarding the performance of the DEP’s NRD program back in October of 2007, in the take of an adverse Superior Court decision in the case of Ewing Township. (N.J. Dept. of Envtl. Prot. v. Exxon Mobil Corp., Docket No. MER-L-2933-02 (N.J. Super. Ct. Law Div. Aug. 24, 2007).

“On August 24, 2007, a state Superior Court dismissed with prejudice an attempt by the New Jersey Department of Environmental Protection (DEP) to recover a natural resource damage claim involving benzene and toluene contamination of private wells in the Hillwood Lakes area of Ewing Township. (N.J. Dept. of Envtl. Prot. v. Exxon Mobil Corp., Docket No. MER-L-2933-02 (N.J. Super. Ct. Law Div. Aug. 24, 2007)). The Court found that DEP did not follow the rule making process to establish, by regulation, a reliable formula for calculating natural resources damages. In the absence of regulations, the Court also found DEP lacked adequate scientific support to proceed on a case-by-case basis.

In a 2004 settlement agreement of the case New Jersey Society of Environmental & Economic Development v. Campbell (N.J. Super. Law Div., Mercer County) DEP legally committed to propose formal natural resource damage regulations. Those NRD regulations were never adopted by DEP.

For additional documents see:

NEW JERSEY FORFEITS HUNDREDS OF MILLIONS IN POLLUTION DAMAGES