Exxon Reaction: Don’t Rush Flawed Ballot Measure to Dedicate Environmental Funds
Get It Right
Don’t Repeat Open Space Ballot Errors
We all know that “mistakes were made” in the recent Open Space ballot process.
We don’t want to repeat those kind of mistakes, where flaws were identified but the critics who flagged those flaws were ignored or marginalized.
But we could be repeating exactly those kind of mistakes, due to lack of full consideration and avoidance of untended consequences.
Yesterday, the Senate Environment Committee held the required public hearing on a Senate Concurrent Resolution (SCR 163 [1R]) that is intended to authorize a November ballot measure to dedicate the revenues from environmental settlements with polluters to assure that money goes to environmental restoration, and not diverted to close State budget gaps.
I wrote about the SCR previously, see:
The Assembly companion (ACR 230) is bogged down and has not been heard in Committee yet.
Both Houses must approve the measure very soon for it to get on the November ballot – unsure of exactly when, but the Assembly would require an unusual special summer session, so it is not likely to happen (recall a summer session led to the Open Space debacle).
So, while I strongly support this and would like to see it move quickly and be on the November ballot, there is no rush. The Christie DEP is not exactly cranking out NRD settlements, so another year delay will not likely have a significant impact.
The Legislature’s move is in response to the Christie Exxon $225 million settlement of what DEP estimated was an $8.9 billion injury to natural resources (hundreds of acres of wetlands and marshes on the Bayway and Bayonne refinery sites).
Gov. Christie’s diverted more than $190 million in funds from the Passaic River cleanup settlement, expanding an abuse of prior Governor’s with respect to environmental funds.
The SCR does not address the underlying legal and technical framework for quantifying and monetizing natural resource injuries that led to the Exxon debacle, but it would allow voters to stop that diversion abuse and require that the revenues from environmental settlements are used exclusively for environmental restoration.
That is a good idea, but it does not resolve the underlying problems that led to the Exxon disaster.
A future post will discuss the failure to learn the lessons of Exxon and NRD, but for now a few thoughts on the Resolution:
1) The Senate Env. Cmte amended and released SCR 163 [1R] – the amended version deleted allowable use of funds for repayment of bonds and added a 5% for DEP administrative costs.
Ideally, additional allowable uses should be deleted because they have no nexus to restoring damaged natural resources. Those uses include:
any of the purposes enumerated in Article VIII, Section II, paragraph 6 of the State Constitution
That is a reference to the Corporate Business Tax (CBT) dedicated uses, which include (problematic uses in tersm of a nexus to natural resource injuries are in boldface)
providing funding, including loans or grants, for the preservation, including acquisition, development, and stewardship, of lands for recreation and conservation purposes, including lands that protect water supplies and lands that have incurred flood or storm damage or are likely to do so, or that may buffer or protect other properties from flood or storm damage; providing funding, including loans or grants, for the preservation and stewardship of land for agricultural or horticultural use and production; providing funding, including loans or grants for historic preservation; paying administrative costs associated with each of those efforts; paying or financing the cost of water quality point and nonpoint source pollution monitoring, watershed based water resource planning and management, and nonpoint source pollution prevention projects; paying or financing costs incurred by the State for the remediation of discharges of hazardous substances, which costs may include performing necessary operation and maintenance activities relating to remedial actions and costs incurred for providing alternative sources of public or private water supplies, when a water supply has been, or is suspected of being, contaminated by a hazardous substance discharge; providing funding, including loans or grants, for the upgrade, replacement, or closure of underground storage tanks that store or were used to store hazardous substances, and for the costs of remediating any discharge therefrom; and providing funding, including loans and grants, for the costs of the remediation of discharges of hazardous substances, which costs may include costs incurred for providing alternative sources of public or private water supplies, when a water supply has been, or is suspected of being, contaminated by a hazardous substance discharge.
Many of the boldfaced allowable uses would not be appropriate uses of NRD funds.
2) But the larger concern, aside from the technical flaws above, is that failure to include “compensation for lost use of natural resources” in the SCR could have unintended consequences:.
A big part of the of the Exxon $8.9 billion damage assessment was compensatory restoration.
Raising further concerns with respect to DEP’s efforts to quantify and recover compensatory restoration, DEP Commissioner Martin sent a May 8, 2015 letter to legislators that explained how the Paulsboro oil depot NRD damage assessment was reduced by 85% due in part to reduction of the compensatory restoration component.
Failure to include “compensation for lost use” in the SCR could enable future Governors to skirt the dedication and use compensatory restoration revenues for budget gaps.
It also could be used by industry lawyers to support arguments that compensatory restoration for lost use is not legally authorized.
Legislators should not trust the Governor to interpret the word “restore” to include both primary restoration and compensatory restoration.
Legislators should not provide an opportunity for industry lawyers to even make the argument that the obligation to “restore” does not include “compensation for lost use”, or allow a judge to reach that conclusion.
It is not wise to take either legal risk and so Legislators should amend the SCR to include the phrase “compensation for lost use” of natural resources.
Let’s not rush this through and make the kind of mistakes made in the Open Space dedication.
[PS – I’ve been arguing that getting this on the ballot in November was a test of whether the Dems were serious or just grandstanding, so OBVIOUSLY I don’t want to give Assembly Dems an excuse for delay.
I just think the policy need to be rock solid and come before the politics.
PPS – How hard would it be for a competent lawyer to review the Exxon brief and the 3 prior court cases DEP LOST to determine legal vulnerabilities?
Then, based on these legal vulnerabilities, amend this Resolution and introduce legislation to strengthen the NRD program?
How hard would real reform be? Surely that’s not too much work. ~~~ end]