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Murphy DEP shares same policy on regulating greenhouse gas emissions as Trump EPA

Has NJ AG Grewal Withdrawn the Christie Lawsuit Against The Obama EPA?

During the media and environmental group feeding frenzy to condemn the Trump administration, keep in mind that the Murphy administration shares exactly the same regulatory policy as the Trump EPA.

[Update below]

The Trump EPA today adopted their proposed new rule which repeals and replaces the Obama EPA’s “Clean Power Plan”, see:

• E.P.A. Finalizes Its Plan to Replace Obama-Era Climate Rules

Here’s the most significant implication, which I want to discuss in the context of the NJ regulatory arena:

If the Supreme Court ultimately upholds the rule’s approach to the regulation of pollution, it would be difficult or impossible for future presidents to tackle climate change through the Environmental Protection Agency. …

At issue is the meaning of the 1972 Clean Air Act. The Obama administration interpreted that law as giving the Environmental Protection Agency broad authority to set national restrictions on carbon emissions. The Trump administration asserts that the law limits the agency to regulating emissions at the level of individual power plants.

But before I get to how we came to this point and what it means, let me first note that the Trump EPA shares the same fundamental policy with respect to the role of market forces versus regulation as the Murphy DEP does (as we recently criticized in the DEP RGGI rule).

The  NY Times story makes this clear, stating the key premise of the Trump EPA:

The measure, which is expected to come into effect within 30 days, assumes that the forces of the market will guide the country to a future of cleaner energy by naturally phasing out coal over time. It imposes only modest requirements on coal plants.

That is virtually identical to the Murphy DEP premises regarding market forces:

• “The CO2 Budget Trading Program is a cap-and-trade program, which is a market-based approach used to control pollution by providing economic incentives for achieving reductions in CO2 emissions from the electric generating sector. (@ page 2)
• “Any new plants constructed that are subject to the RGGI cap will increase demand for the RGGI CO2 allowances. This is likely to result in upward price pressure on all CO2 allowances, resulting in higher costs for fossil fuel generating sources. This is the core of RGGI’s program design. RGGI is not designed to reduce carbon emissions directly, but instead to make fossil fuel generation costlier to operate. (@ page 41).

Now to our topic today and how we got to this point:

On February 9, 2016, the US Supreme Court issued a stay on the Obama Clean Power Plan.

As the NY Times reports:

The Supreme Court suspended the implementation of Mr. Obama’s plan in 2016, pending the resolution of legal challenges from 28 states and hundreds of companies. It has never come into force.

NJ was one of those 28 states that challenged the Obama EPA rules – the Christie Administration joined coal states like West Virginia (read the brief).

As the American Bar Association explained:

Shortly after the EPA announced the Clean Power Plan, a group of states and industry groups, led by West Virginia, the nation’s leading coal producer, filed a lawsuit to halt the implementation of the plan, arguing that it exceeded the EPA’s mandate under the Clean Air Act and violated states’ rights to regulate electrical power.

The scope of EPA authority under challenge is echoed in NJ law and DEP regulation, as I explained in detail in Christie DEP Approves Another Fossil Fueled Power Plant.

Here is that same legal and regulatory issue in NJ:

“State of the art” in pollution control (SOTA) far too narrow

The DEP regulations define “state of the art” in pollution control (SOTA) very narrowly. According to DEP response to public comment:

Comment: … The commenters stated that regulated GHG emissions could be reduced or eliminated by energy efficiency, reduction in energy demand, demand management, and/or renewable energy; none of these “pollution control” methods were considered. …

Response: Pursuant to N.J.A.C. 7:27-22.2, New Jersey Title V Operating Permit Requirements apply to a facility as defined in N.J.A.C 7:27-22.1. At N.J.A.C. 7:27-22.1, a facility consists of “the combination of all structures, buildings, equipment, control apparatus, storage tanks, source operations, and other operations that are located on a single site or on contiguous or adjacent sites and that are under common control of the same person or persons.” Thus, requirements for off-site measures that are not under control of the owners or operators, such as reduction in energy demand or demand management, are beyond the scope of the NJDEP’s authority to review an operating permit application. Also, the NJDEP cannot redefine a project to include renewable energy.

This DEP rule contrasts with a far broader approach under EPA federal rules. Pollution control technology is generally understood and defined by EPA regulations:

“the term “control technology” is defined broadly to be consistent with section 112(d)(2) of the Clean Air Act to include measures, processes, methods, systems or techniques which reduce the volume of, or eliminate emissions of, HAP through process changes, substitution of materials or other modifications; enclose systems or processes to eliminate emissions; collect, capture or treat HAP when released from a process, stack, storage or fugitive emissions point; are design, equipment, work practice, or operational standards; or a combination of the above.

Obviously, the NJ “State of the Art” in pollution control for greenhouse gases MUST include consideration of energy efficiency, demand management, and renewable energy.

That may require legislation or perhaps the next DEP Commissioner can issue regulations.

Let me repeat the key flaw in NJ DEP regulatory policy with respect to application, scope and content of regulation of greenhouse gas emissions.

DEP wrote this, which is far narrower than the basis of the Obama EPA Clean Power Plan and virtually identical to the Trump EPA policy:

a facility consists of “the combination of all structures, buildings, equipment, control apparatus, storage tanks, source operations, and other operations that are located on a single site or on contiguous or adjacent sites and that are under common control of the same person or persons.” Thus, requirements for off-site measures that are not under control of the owners or operators, such as reduction in energy demand or demand management, are beyond the scope of the NJDEP’s authority to review an operating permit application. Also, the NJDEP cannot redefine a project to include renewable energy.

Compare NJ DEP’s narrow interpretation above with the Trump EPA’s interpretation:

We note that the Murphy administration has not publicly repudiated the Christie administration’s legal attack on the Obama EPA rule.

We ask the legal eagles out there to advise us regarding the status of the 28 State litigation and whether NJ remains a party to the lawsuit or whether the Murphy AG Grewal formally withdrew NJ’s legal challenge.

Regardless of the status of that lawsuit, we must note that the Murphy DEP continues to implement the narrow Christie DEP regulatory interpretation excerpted above regarding DEP’s authority to regulate greenhouse gas emissions.

This failure to revise seriously flawed Christie DEP interpretation of regulations on greenhouse gas emissions is occurring at a time that several new major GHG emission sources are proposed.

The Murphy DEP has not promulgated regulations to reverse the Christie DEP regulatory policy regarding the scope and requirements of the NJ law of “state of the art in pollution control” (SOTA) with respect to emissions of greenhouse gases.

The NJ legislature has not introduced, never mind passed, new law to clarify these issues.

So, during the media and environmental group feeding frenzy to condemn the Trump administration, keep in mind that the Murphy administration shares exactly the same regulatory policy as the Trump EPA.

[Update: A friendly reader suggested I need to keep it simple:

to translate a bit for an interested, but general audience. The dynamics of what has been done, and what needs to be done, can get very wonky.

No doubt, that is excellent advice, but, I lack the writing skills and adequate time to do so, especially  on such a complex topic.

Come to think about it, most of my posts are wonky by design and are targeted a a policymaking audience, not a general audience.

But let me take a stab:

The larger debate is about 2 closely related but distinct big ideas:

1) the role of the federal government, versus the states; and

2) whether democratic government’s regulatory mandates (e.g. Speed Limit 55 mph) or the so called “free market” (e.g. you decide to drive safely: prices, voluntary individual consumer choices, corporate profit maximizing decisions, et al) should be used to achieve the deep and rapid reductions of greenhouse gas emissions scientists agree are necessary to avoid climate catastrophe.

Regarding #1, obviously coal, oil and gas producing States are economically and politically NOT going to choose voluntarily to abandon fossil fuels and rapidly transition to renewables. So, federal mandates are necessary.

But Trump and right wing Republicans (including Supreme Court Federalist Society members and some corporate Democrats), seek to dismantle the federal “administrative state” in favor of State’s rights. This would cripple EPA powers to regulate a host of critical GHG emission reduction measures, from energy efficiency standards for appliances and vehicles, to pollution limits on coal power plants.

Regarding #2, this is really about democracy versus corporate power.

Long experience has shown that national problems require national solutions, and that collective systemic structural reforms are far more effective, fair, and efficient (technically and economically) than voluntary individual market based choices (just think of car safety: seat belts were vehemently opposed by the auto industry and reluctantly provided as optional “extras” before they were mandated by the federal government. Similarly, fuel economy was more effective via EPA national fuel economy standards, not individual purchasing decisions. Obviously, the federal government mandates were the better approach, compared to individual consumer choice and/or corporate profit driven decisions.

Similarly the role of government and the functioning of democracy are both under attack by far right ideologues who would prefer that corporations and markets rule.

The large ideas play out in regulatory debates and have direct consequences for the health and wellbeing of everyone – and in this case of climate catastrophe, the future of the world.

The Trump EPA says they can’t legally consider whether your corporate energy producer should or could by required by EPA to reduce their GHG emissions, or reduce energy demand, promote energy efficiency or other “demand management” strategies.

The Obama EPA Clean Power Plan said exactly the opposite.

The Trump EPA rules apply only to minor combustion efficiency technological improvement at an individual power plant.

In contrast, the Obama CPP applied to the whole energy sector (“beyond the fence line”), and involved federal EPA in pushing states to implement broad energy conservation (reduce demand), energy efficiency, and demand management strategies, in addition to the narrow combustion and emissions from an individual power plant.

And, finally, few people realize that the NJ DEP regulations and how they interpret them say the same thing as the Trump EPA, despite all Gov. Murphy’s rhetoric about renewables and a transition to clean energy.

The point I’m trying to make, aside from the blatant hypocrisy, is that we will never be able to achieve Gov. Murphy’s goals under current DEP regulations, which limit the scope of DEP’s power and rely heavily on voluntary individual and corporate market decsions.

So, I tried to make this more digestible.  ~~~ end update]

It is insane to rely on a “market based approach” when there is huge “market failure”

RGGI is a small fee to pollute. It provides billions of dollars in subsidies, locks in emissions, and protects polluters from strict science based regulation for at least a decade.

I’ve written about fatal flaws in RGGI so many times now, I won’t repeat all that today.

In a future post, I will update the situation based on DEP’s response to public comments in the adoption document for the RGGI rule. 

Anyone interested in understanding the RGGI program should spend some time with that document, and ignore the Governor’s press release and media stenographers.

However, I have to respond to the Big Lies and spin that NJ Spotlight unconditionally printed today – worst first:

1. Compliance Cost To Large Energy Users – Dennis Hart, NJ Chemistry Council

Aside from failing to note the revolving door abuse of Mr. Hart, a former DEP Assistant Commissioner, NJ Spotlight printed this fact free whopper:

The multi-state initiative is a cap-and-trade program placing a tax on carbon emissions, which is passed on to utility customers. The DEP projects the tax will cost the average residential homeowner $9 more a year on their electricity bill. The cost for large energy users will be much higher, adding hundreds of millions of dollars to their annual bills, according to testimony from Dennis Hart, executive director of the Chemistry Industry Council.

The RGGI allowances are not a “tax”. They are selling for around $5/ton.

The Statewide CO2 emissions cap is 18 million tons.

DO THE MATH: The entire RGGI program – which is paid for by residential, commercial & industrial sectors – is less than $90 million.

HART IS OBVIOUSLY LYING. CALL HIM ON IT – DON”T PRINT THE LIE.

The economic reality is exactly the opposite of Mr. Hart’s Big Lie.

Big Industrial energy users are receiving hundreds of millions of $ in subsidies every year.

Instead of paying a paltry $5/ton RGGI allowances, they should be paying $122/ton DEP air pollution emission fees for CO2, just like other pollutants. (the FY 2017 $117/ton fee as increased to $122)

The RGGI allowance actually is a $117 per ton subsidy.

At 18 million tons, that’s a statewide $2.106 BILLION subsidy – large energy users receive a significant portion of that total statewide annual subsidy.

At minimum, the RGGI allowances should be set at the EPA’s Social Cost of Carbon, which, depending on interest rates and damage assumptions, range from $42/ton – $123/ton in year 2020.

The “external costs” are larger than the market price. That is a massive “market failure”.

So, the RGGI paltry $5/ton allowance is $37/ton – $118/ton  too low to reflect the true social costs of emissions- representing another multi-BILLION dollar subsidy to carbon polluters.

RGGI only covers CO2 emission from an energy production facility. RGGI does not address other greenhouse gas emissions, like methane, which has many times more global warming potential than CO2. RGGI also dos not consider lifecycle emissions, i.e. those that occur upstream of the energy production facility (extraction, wells, pipelines, distribution, processing, leaks and fugitive emissions, etc).

So the subsidy to big polluters – particularly fracked gas power plants – is even LARGER than $2.1 BILLION/YR.

2. “Leakage”

NJ Spotlight uncritically printed this half truth and spin:

Others, however, fear the state’s new rules will end up increasing greenhouse-gas emissions by favoring out-of-state power plants not subject to the carbon tax over cleaner and more expensive New Jersey units. The problem has been called leakage, an issue that must be addressed, according to energy experts and clean-energy advocates.

Without a leakage mitigation plan, today’s action will increase carbon dioxide emissions by 30 million tons from 2020 through 2030, which equates to almost two years of New Jersey’s annual electricity generation emissions,’’ said Adam Kaufman, executive director of the Independent Energy Producers of New Jersey….

In response to such criticism, the DEP noted another regulatory agency, the New Jersey Board of Public Utilities, has committed to starting a proceeding to address problems posed by “leakage.’’

What the Independent Producers, DEP and Spotlight fail to note is that the legislature mandated that BPU adopt what they call a “leakage mitigation plan” by July 2009.

If you really get into the weeds of the DEP adoption document, you san see how DEP subtly lied to cover up that BPU decade of failure. Just compare DEP’s response on bottom of page 27-28. While DEP correctly cited the law, in the statutory text they excerpted, they left out 2 critical things: 1) the legislative mandate “shall”, which they incorrectly describe as a legislative “authorization”; and 2) the July 1, 2009 compliance date. (DEP also misnamed the applicable law: it was the Global Warming Response Act, not the Global Warming Solutions Fund Act.)

Here is the full statutory provision, from the Global Warming Response Act (N.J.S.A. 48:3-87.c(2), where the legislature mandated (emphases mine)

“(2) By July 1, 2009, the board shall adopt, pursuant to the “Administrative Procedure Act,” P.L.1968, c. 410 (C.52:14B-1 et seq. ), a greenhouse gas emissions portfolio standard to mitigate leakage or another regulatory mechanism to mitigate leakage applicable to all electric power suppliers and basic generation service providers that provide electricity to customers within the State.  

The BPU held Stakeholder meetings in 2008 to do so, but never adopted a “greenhouse gas emissions portfolio standard”, BPU Order, or “another regulatory mechanism” to mitigate leakage.

DEP describes this history on page 28 of the adoption document: (the links work there)

Now, 10 years later, the leakage issue again is used by the energy industry to criticize RGGI.

But at the same time, the energy industry opposes any “greenhouse gas emissions portfolio standard” or “another regulatory mechanism” to mitigate leakage – including a “carbon price adder” – including on energy imports – like other states use to address market failures, prevent “leakage”, and internalize the external social costs of carbon. (e.g. see New York and California)

They can’t have it both ways.

But NJ Spotlight never calls bullshit on their energy industry friends and funders.

And despite DEP pointing the finger at BPU,  the “leakage” issue is not solely a BPU issue.

First, the law mandates that BPU adopt regulations “in consultation” with DEP.

Second, the Global Warming Response Act requires DEP to consider leakage in RGGI regulations:

3. A Market Based Approach Makes No Sense Under Conditions of Structural Market Failure

Numerous times, DEP describes and defends RGGI as a “market based approach”:

But the energy market reflects huge structural market failures, most significantly: a lack of effective competition, technological monopoly, and huge external costs of energy that are not reflected in the market price of energy (see this for a good technical discussion of SCC).

I will not go into all the economic theory and data on this here, but merely note that it is insane to rely on a market based approach under conditions of structural market failure.

The case for traditional “command and control regulation” is far more defensible and effective in driving real and deep emissions reductions than a failed “market based approach.

Ironically, the 1990 Clean Air Act’s acid rain program, often touted as a “market based approach” that worked, was in fact actually implemented via traditional site specific facility air pollution control permits and emission limits set by EPA, not by “markets” and trading.

4. The Man’s a Ho.

The DEP set the cap at 18 million tons/year, far too high to achieve the kind of deep and rapid emissions reductions that reflect the climate science.

But, a Mr. Bruce Ho of NRDC – see: Jim Hansen Takes On NRDC for background –  ignores all that in a delusional and sycophantic piece of spin, which is almost a verbatim statement that DEP made in the rule adoption document in response to criticism of the cap by environmental groups (see page 42 and compare to Mr. Ho’s.

Here’ DEP: (@ page 42)

The other rule establishes the initial carbon-dioxide cap for the state’s electricity generation sector at 18 million tons in 2020.

That is far less than what many argued the cap should be set at, with environmental groups initially pressing for a limit of 12.6 million tons. Anything less, they suggested, would result in less emission reductions and fewer dollars to spend on clean energy programs.

Bruce Ho, a senior advocate for the Natural Resources Defense Council, who came around to accepting the 18 million tons cap, said, “Ultimately, it was reasonable based on the data we were seeing in the energy sector.’’

Ho noted that the DEP committed to work with other states to evaluate and strengthen the RGGI program, an indication that the pollution cap might be tightened in the future. In any event, the governor’s office said the carbon dioxide emissions will decline by 30 percent through 2030.

The 18 million ton cap is NOT “reasonable” in light of climate science. Period.

5. Grazing in the Gas

Some environmental groups have pointed out that Gov. Murphy can not achieve his climate and clean energy policy goals while expanding fossil gas infrastructure. They have demanded that the Gov. impose a moratorium on new gas plants and pipelines.

Yet, far more than a moratorium is necessary, including the phase out and shut down of current gas plants and pipelines and garbage incinerators and sludge incinerators (all are multi-billion dollar stranded investments).

Regardless, DEP casually rejected anything along these lines, admitted that RGGI’s cap would not block new gas plants and pipelines, and went all in for gas. DEP wrote:

Any new plants constructed that are subject to the RGGI cap will increase demand for the RGGI CO2 allowances. This is likely to result in upward price pressure on all CO2 allowances, resulting in higher costs for fossil fuel generating sources. This is the core of RGGI’s program design. RGGI is not designed to reduce carbon emissions directly, but instead to make fossil fuel generation costlier to operate. (@ page 41).

At a paltry $4-$6/ton CO2, that ain’t gonna happen! RGGI is a small fee to pollute and it locks in emissions and protects polluters from strict science based regulation for at least a decade.

And I wonder if they cleared that statement with the Gov.’s office?

6. Delusions

Instead of telling the truth about the fatal flaws of RGGI and energy markets, calling for aggressive implementation of public transportation and current zero emission car mandates, and demanding new building codes and retrofit requirements, some so called “green groups” are actually seeking to expand RGGI to transportation and building sectors:

Nevertheless, clean-energy advocates see in RGGI a template for curbing other climate-warming emissions in other sectors, particularly the transportation sector. Late last year, the Murphy administration joined a regional initiative to reduce carbon pollution from transportation sources.

“The Transportation Climate Alliance is finally starting to address emissions from cars and trucks across state lines,’’ noted Doug O’Malley, director of Environment New Jersey, citing efforts to electrify the sector. “We are going to need to address those emissions more rapidly.’’

If it is insane to rely on a market based approach under conditions of structural market failure, it is delusional to call to expand failure.

I could go on – but I’ll stop here and close wIth a serious question:

What is it about RGGI that drives good people to lie so blatantly?

Follow the money and the finance trails

Who were the players behind the scenes that pushed this project through DRBC and DEP reviews, without disclosing the LNG aspects?

[Update below]

This is a followup to my previous post, where I explained the attempt to stealth a controversial LNG export terminal through the DRBC and NJ DEP regulatory review process.

DRBC themselves confirmed similar flaws in the DRBC review process, rejecting claims of a coverup:

“DRBC disagrees with that statement,” it said. “The public hearing on June 6 was adequately noticed, and DRBC has shared with the public all information submitted by the applicant and/or its contractors.”:

Upon approval, the DRBC exposed its narrow scope of review and total lack of consideration of climate impacts or energy policy: (Inquirer)

The commission said its review was confined to the impact of building the wharf and of dredging the Delaware River to 43 feet deep to connect with the main channel.

But, perhaps there are other reasons that can explain this huge blunder – other than pure regulatory failure, e.g.: political pressure on regulators by high level officials.

The Delaware Riverkeeper Network, who exposed the story, is alleging a coverup.

In fact, it appears that this could be another example of:

• Political Pressure on DEP – How The Game is Played

Here is what a quick Google found – given all the smoke, we strongly suspect fire.

To document what would be an Encap-level blaze of corruption, some intrepid journalist out there should file OPRA requests at DRBC and NJ DEP for all the regulatory review documents, i.e. the full administrative file and all communications regarding it (where are you Jeff Pillets!).

I) Longtime Sweeney involvement

Back on July 24, 2016, the Philadelphia Inquirer reported:

Plan to revive old South Jersey industrial site draws fans and fears

[…]

State and local leaders are confident the new port will be a positive presence in the township and county.

“This will be a big job generator,” said Senate President Stephen Sweeney, whose Third Legislative District includes Gibbstown, also known as Greenwich Township. “We’ve been working on this since 2005.”

Sweeney has already had his way with Murphy DEP Commissioner McCabe, so he knows her number (besides, he also had his own Senate staffer, Eric Wachter installed as McCabe DEP’s first Chief of Staff. But The latest DEP org chart indicates that Wachter has departed. He’s now in private sector.)

Given Sweeney’s many prior interventions at DEP, it is not a stretch to speculate that he twisted DEP arms on this proposed LNG terminal that he’s supported “since 2005″.

II.  Twisted Tales Of Wall Street Finance Could Link Gov. Murphy to the Project

Before the 2016 Philadelphia Inquirer story, back on 3/20/15, NJ.Com wrote a story with Sweeney praising Fortress Investment Group:

• Shuttered DuPont gunpowder plant to ‘rise from the ashes’, become newest port along Delaware River

State Sen. President Steve Sweeney led a press conference in Greenwich Township to announce the sale of the township’s former DuPont Repauno plant to Fortress Investment Group, which aims to turn the dormant 1,800-acre property into a port-related industrial park for imports and exports.

Sweeney goes out of his way to praise Fortress:

“That’s what they do, and they do it with private sector capital, not government money, which is the win-win-win for everybody,” said Sweeney, who declined to divulge the total value of the sale besides to say “It’s a lot of land.”

But Fortress did not provide a “win-win-win for everybody”. 

Fortress is a failed hedge fund – see:

• The Fall of Fortress  – The asset manager is selling itself at a premium, but it’s still trading at a fraction of its IPO price. The big losers? Us.

Fortress Investment Group, the struggling alternative-­investment firm that went public to great fanfare ten years ago but whose shares have since lost 74 percent of their market value. …

Kaplan says Fortress has been “terrible” for public investors.

They’ve ripped off public investors, including – as Sweeney might appreciate, given his political battles with NJ Teachers Unions – the Ohio Teacher’s Pension Fund:

Fortress was the first U.S. alternatives firm to go public, in 2007, starting a trend that burned red-hot, then quickly flamed out, proving over the past ten years that these deals have been a disaster for public shareholders, which include big mutual funds catering to both retail and institutional investors. Among Fortress’s shareholders: Allianz Asset Management, Fidelity Investments, Wellington Management Co., and even the State Teachers Retirement System of Ohio.

Now here’s where the links between Fortress and Gov. Murphy get murky and hypothetical, but good investigative journalism could connect these dots:

1. Veteran NJ environmental reporter Kirk Moore confirmed the story on the stealth LNG aspect of this project, where he also noted:

Delaware River Partners LLC, a subsidiary of New York City-based Fortress Investment Group.

2. Who is Fortress Investment Group? Wikipedia reports that they have strong links to Goldman Sachs:

When Fortress launched on the NYSE on February 9, 2007 with Goldman Sachs and Lehman Brothers underwriting the IPO.

3. More recently, Fortress was acquired by a politically wired firm called SoftBank Group Corp, as reported by Institutional Investor:

Last December business executives from around the globe made their way to Manhattan’s Trump Tower to meet with president-­elect Donald Trump. But few made as big of a splash as Masayoshi Son, head of SoftBank Group Corp., who had Trump crowing on Twitter about the Japanese mogul’s pledge to invest $50 billion in the U.S. and create 50,000 American jobs.

… on February 14 [2017], SoftBank agreed to pay $3.3 billion to buy Fortress Investment Group, the struggling alternative-­investment firm that went public to great fanfare ten years ago but whose shares have since lost 74 percent of their market value.

4. SoftBank has some interesting relationships:

Fortress’s $3.3 billion deal with SoftBank was driven by Rajeev Misra, a former Deutsche Bank derivatives expert who is now in charge of investment strategy.

Gov. Murphy was former US Ambassador to Germany, where, particularly given his Goldman Sachs finance background, one assumes he had relationships with Deutsche Bank “experts” on investment strategy.

5. Now look who Mr. Misra, who drove the Fortress deal, formed a relationship with and where that individual previously worked:

A few years ago Misra worked briefly at Fortress, where he developed a relationship with Edens and Peter Briger Jr., who cochair the board of directors. (Briger also has ties to Japan, where he previously worked for Goldman Sachs Group.)

6. Briger and Phil Murphy are both Goldman Sachs diaspora, see NY Times.

So, a few questions emerge:

Did Phil Murphy have any involvement with the Fortress deal when he was at Goldman?

Did Phil Murphy have any relationship with SoftBank or Peter Briger?

Was Gov. Phil Murphy aware of the Fortress role?

As Gov. of NJ, Murphy sits on the DRBC Board and has executive control over DEP.

Did Murphy  in any way intervene in DRBC and/or DEP regulatory review processes?

Who were the players behind the scenes that pushed this project through DRBC and DEP reviews, without disclosing the LNG aspects?

[END NOTE:  There are many “coincidences” here.

The proposed LNG plant would be located on a former Dupont massive toxic waste site, known as “Repauno”.

Tomorrow, the Senate Environment Committee will hear a bill that directly and significant impacts the Dupont/Chemours Repauno site by prohibiting DEP assumption of direct oversight. That would put Dupont/Chemours in total control of the cleanup, with no DEP oversight, for details, see:

• NJ Senate Bill Would Prohibit DEP Oversight of Some of NJ’s Worst Toxic Industrial Sites

• NJ Senate To Consider Bill To Further Weaken NJ Toxic Site Cleanup Laws

Check out the Dupont Repauno site on EPA RCRA list. S3682 would prohibit NJ DEP oversight of the Repauno site as under the “federal involvement” loophole in Section 26

This is not the first time a former Dupont toxic site was involved in a corrupt billion $ energy facility development, see:

• A Green New Deal for the People of Linden

Unbelievable corruption in plain sight.

[Update: 6/16/19 – Just to nail this down and remove the plausible denial factor, I just sent this note to the members of the Senate Environment Committee and Democratic Senate staff and the media:

From: Bill WOLFE <bill_wolfe@comcast.net>
To: senbsmith <SenBSmith@njleg.org>, sengreenstein <sengreenstein@njleg.org>, senbateman <senbateman@njleg.org>, kduhon@njleg.org, Tittel, Jeff, Tittel, Jeff, jonhurdle@gmail.com, Pringle, Dave, Jeff Pillets <jeffpillets@icloud.com>, tmoran@starledger.com
Date: June 16, 2019 at 10:31 PM
Subject: S3682 – Dupont Repauno & LNG terminal

Dear Chairman Smith:

Recent news reports have revealed a highly controversial plan to develop an LNG export terminal at the former Dupont Repauno toxic waste site.

The Dupont Repauno site (now Chemours) is a RCRA Corrective Action cleanup site (as well as subject to DEP oversight pursuant to NJ remedial State law). See EPA NJ Corrective Action cleanup site list:

https://www.epa.gov/hwcorrectiveactionsites/new-jersey-rcra-cleanup-facilities-contacts

Section 26 of your bill, S3682, would directly impact the cleanup and redevelopment of that site by prohibiting NJ DEP oversight.

Clearly, it is not in the interests of NJ’s environment, public health, the Delaware River, and the public interest to put Dupont/Chemours in total control of the cleanup of that massive toxic site, subject only to the Trump EPA under federal RCRA.

On the basis alone I again urge you to delete Section 26 and hold your bill for further consideration.

Respectfully,

Bill Wolfe

DEP Permit Regulations Ignore Climate Change

DEP Coaches Permit Applicants & Rubber Stamps 95%+ Of Permits

DEP fails to comply with Legislation mandating Annual Permit Reports

The Public Is Shut Out When Critical “Go-No Go” Policy Decisions Are Made

If the LNG debacle does not trigger major management, regulatory, and permit review reforms at DEP, then nothing will.

[Updates below]

As skeptical as I am, even I was shocked by reading this (excellent reporting by Jon Hurdle at NJ Spotlight):

In New Jersey, the Department of Environmental Protection issued a permit to Delaware River Partners on May 20 to build a new dock and dredge a 45-acre area of the river to a depth of 45 feet below the low-water mark. The permit said nothing about the plan to build an LNG terminal. On June 5, the DEP suspended the permit because of a procedural error but said it would review its action after a 15-day public comment period.

Obviously, the LNG developer – with the knowledge, cooperation and support of the DEP – tried to stealth what they knew would be a hugely controversial fracked fossil fuel permit process that would trigger massive public opposition and protest.

When the scam was outed by diligent environmental activists, suddenly DEP discovered a “procedural error” and “suspended” the permit and provided a mere 15 day new public comment period.

That DEP story is simply not credible. And their remedy is sham.

And if it is true, it exposes gross mismanagement, technical incompetence, and regulatory negligence.

Heads at DEP must roll for “errors” of this magnitude.

But we think this LNG “error” is not an anomaly, but instead exposes the following systemic flaws at DEP – flaws we have personal knowledge and experience of and have written about for years:

1. Mis-mangement in high places

This is not the first management “error” by DEP Commissioner McCabe.

The folks in Vernon are correctly calling for McCabe’s resignation for similar “errors”.  Ditto many other NJ communities that have been betrayed by DEP. (the full list is too long to post here)

How could a DEP permit engineer not know or ask about LNG export activity and approve a permit for this kind of facility? How about his/her supervisor, Section Chief, Bureau Chief, Assistant Director, Division Director, Assistant Commissioner, Deputy Commissioner, legal team, AG’s Office, and Commissioner not ask before the LNG permit went out the door?

At least 50 DEP professionals must have been aware of this project, yet not one had the integrity to internally warn the Commissioner? Not one had the courage to blow the whistle to environmental groups and/or media? They all let this happen? How could that be?

Climate policy is allegedly Gov. Murphy’s number one environmental priority and a major focal point for the Murphy DEP.

If a huge, international LNG export facility on the Delaware River can slip through the cracks in this context, it means that the Commissioner has zero leadership and zero control over her own agency.

McCabe must go. So must her entire management team. Period. Final Straw. The camel’s back is broken.

But I am not optimistic, as the Executive Director of the Pinelands Commission effectively and similarly tried to stealth a gas pipeline through the Pines, and she still serves there in good standing, see:

• What Does the Pinelands Commission Have to Hide?

2. DEP permit regulations ignore climate change and greenhouse gas emissions

As we’ve written, DEP permit regulations ignore climate change, see:

• NJ Environmental Regulations Ignore Climate Change

There is a possibility that the LNG permit application did not require disclosure of fossil energy related issues.

Regardless, if a case like this does not force major changes to DEP regulations and permit review practices, we truly are lost.

3. The DEP Permit review process, by design, is rigged and captured by regulated industry

I’ve previously written in detail about how the DEP permit process is rigged:

The DEP permit process is rigged

The permit process is heavily biased in favor of the permit applicant not the public.

The bias is present at the beginning and the end of the process.

At the beginning, months before the project was announced publicly, Transco, NJNG, and SJG were given multiple opportunities to meet with DEP staffers and managers.

Those meetings are known as “pre-application conferences”. They are secret and not subject to OPRA. (Listen to how the Pinelands Commission got caught on tape responding to my criticism of “pre-application conferences” with SJG pipeline.)

Those meetings provide access to DEP technical staff and upper management. They allow permittees to understand how DEP interprets the regulations and how to comply with them. They basically iron out all problems in advance and receive conceptual approval of a project before the public is even aware of the existence of a project.

After many months of technical coordination, the public then gets to comment on draft permits at the end of the process.

In this case, DEP held public hearings on the permit applications, not draft permits.

This process allowed the permit applicants to get another bite at the apple and fix any deficiencies the public identified during comments!

I also wrote more recently to criticize DEP Commissioner McCabe for going right along with all that, including failure to submit legislatively mandated annual “Doria” Permit Activity Reports::

The regulatory game is rigged – no wonder DEP rubber stamps 95% of permits. In fact, DEP stopped writing the annual permit “Doria” report mandated by the legislature after the data in that report revealed that DEP approved 95% of permits – and the other 5% were typically withdrawn and resubmitted and later approved.

This institutionalized corruption is far beyond the informal academic concept of “regulatory capture”:

Regulatory capture is a theory associated with George Stigler, a Nobel laureate economist. It is the process by which regulatory agencies eventually come to be dominated by the very industries they were charged with regulating.

Yet Murphy DEP Commissioner McCabe has written that this practice represents a “broad range of stakeholders”.

Meet the new boss – same as the old boss.

To expand and update that criticism, just days before this alleged LNG permit “error” emerged, I had submitted an inquiry to the DEP’s Office of Permit Coordination.

Here’s how DEP explains the mission of that Office – an incredibly revealing description that shows exactly how oblivious DEP is to issues of regulatory capture and bias and how remarkably out of touch and divorced from the public DEP is:

The mission of the Permit Coordination Unit is to insure that complex multi-media, high value projects receive proactive and facilitated communication and coordination in support of timely, predictable, and positive permit decisions.

We accomplish this by:

1. Being the primary manager/driver for several large cross- program projects at any given time.

2. Providing a “one stop”/single point of entry for a second tier of smaller cross- program projects where we will coordinate and facilitate multi program permits but not be primary manager of those projects. Applicants will leave our Permit Readiness Process with confidence that:

   • there is no fatal flaw (early ‘no’ if needed) in their site or project,
   • certainty they are in fact ready to submit permit applications (that no preliminary approvals like LOIs or consistency with WQMPs) are needed or if so that they have been obtained),
   • their project has had the benefit of an informal review and comment on their project by permit reviewers prior to submitting a formal application,
   • they have been introduced to individual program contacts,
   • they have an approximate predictable schedule for permit issuance assuming the submission of a complete and approvable application and fees.

3. Providing an early, informal review and comment on ‘ideas’ or conceptual projects before applicants invest time and money into more detailed project design i.e. – a general GIS overview of site limitations or encumbrances to determine if it is worth further investing in a project.

4. Identifying and resolving initial/overarching policy or rule interpretation or process questions by the Department needed to determine the viability of a project prior to entering the permit application process.

I asked DEP just what a “positive permit decision” is and whether they are concerned about an appearance of coaching permit applicants and “regulatory capture”, all while keeping vital information from the public.

Here is a list of questions I submitted to DEP – all of which take on added significance in light of the LNG debacle – to which DEP has refused to respond:

Hi Ruth – I am researching and planning to write about the role and performance of your office.

In a rare mood of fairness, I was wondering whether you might be interested in responding to a few questions and providing relevant data (in coordination with DEP Press Office, of course):

1. How do you respond to the concern that the role and function of your Office is to provide “coaching” to permit applicants, while not providing equivalent services to the public and communities impacted by regulated activities?

2. How do you respond to the criticism that the records for your office regarding “pre-application” conferences and other services you offer to permit applicants are considered by DEP to be exempt from OPRA and therefore your office operates in the dark, without transparency and accountability?

3. Do you charge fees for the services your office provides to regulated entities? If so, please provide fee schedule. If not, why not?

4. How is your Office funded and what are its staffing levels and budget?

5. On of the functions described on your website is:

“Identifying and resolving initial/overarching policy or rule interpretation or process questions by the Department needed to determine the viability of a project prior to entering the permit application process.”

Can you provide a justification for this? How do you respond to the concern that it fails to provide due process and equal access to the public in making important policy interpretations?

6. How do you respond to the criticism that your Office exacerbates problems associated with “regulatory capture”?

7. according to your website:

“Mission of the Permit Coordination Unit

The mission of the Permit Coordination Unit is to insure that complex multi-media, high value projects receive proactive and facilitated communication and coordination in support of timely, predictable, and positive permit decisions.”

What are “positive permit decisions”?

Can you see a serious problem with that in creating false expectations? (e.g. positive could easily be interpreted as meaning “approved”)

8. Can you provide program activity and performance data, e.g. number of cases your office is involved in, types of involvement, and ultimate disposition (outcome)?

9. Do you track and can you provide any environmental data that would identity benefits associated with your reviews?

10. The Department previously published annual “Permit Activity Reports” under the Doria legislation, but no longer does so.

Does your Office maintain that kind of comprehensive permit data? If so, could you provide it? If not, why not? Does any other program in the Department maintain that data? If so, where could I find it?

*11. Does any of the NEPA, EO 215, and/or permit coordination work of your office include reviews of the impacts on climate change, greenhouse gas emissions, consideration of energy efficiency potential and inclusion of renewable energy, or the need for climate adaptation?

I anticipate writing in the next few days and obviously would prefer to have facts and the Department’s views before I write (but am willing to proceed without same). I appreciate your timely reply.

Again, if the LNG debacle does not trigger major management, regulatory, and permit review reforms, then nothing will.

Update #1: 6/16/19 – I just learned that Kirk Moore broke this story back on June 11, 2019, so he deserves the credit, see:

• Fight brews over potential natural gas port on Delaware River ~~~ end update]

Update #2 – just found out that the Philadelphia Inquirer really broke the story win June 9, see:

• The ‘hidden’ plan to remake an old dynamite factory near Philly into a major gas export terminal

The Delaware Riverkeeper Network, in a May 28 letter to federal and state regulators, said the private port’s true purpose is to export LNG produced in northern Pennsylvania. “This looks to us like a deliberate cover-up,” Maya van Rossum, the head of the riverkeeper network, said in a statement. ~~~ end update#2

NJ Spotlight Gives Whitman An Unconditional Platform

A Whitewash And Act of Gross Revisionism

Yesterday, NJ Spotlight gave former Gov. Christie Whitman a platform, see:

• WHITMAN, OTHER FORMER EPA HEADS TELL CONGRESS AGENCY FAILING CORE MISSION

That is an act of journalistic negligence and moral nihilism.

Many Spotlight readers may not know of Whitman’s environmental, climate and 9/11 record when she served as NJ Governor and Bush administration EPA Administrator.

So, we feel obligated to call out Spotlight for that egregious act and provide context and a few details of Whitman’s record for readers.

First of all, Whitman has the blood of thousands of 9/11 first responders on her hands, see:

• Dying Jersey Guy Recalls Whitman 9-11 Remarks – “She’s a Liar”

Second, as NJ Governor, Whitman’s prime slogan was NJ is “Open For Business”, a slogan she used to systematically weaken NJ’s environmental laws and regulations and cripple DEP as an institution.

The former Bergen Record won a journalistic award for exposing Whitman’s “Open for Business” record, which included not only environmental rollbacks and corporate welfare, but corrupt pay to play practices.

Whitman’s US Senate Confirmation hearing transcript provides testimony that comprehensively  documents that record, which was one of “failing a core mission”. Don’t miss my friend Bill Neil’s testimony.

On Whitman’s record, no need to take my word for it. Skeptics can read Whitman’s STARR Report (see p. 46 summary) “Strategy to Advance Regulatory Reform” (Department of State, Office of Business Ombudsman, July 1995) and read Whitman’s first State of The State address for examples of her no holds barred assault on DEP and regulation. Whitman abolished the Office of Environmental Prosecutor via Executive Order #9 and created the anti-regulatory Business Ombudsman’s Office via Executive Order #15) Whitman sought to roll back stricter NJ state standards to federal minimums via Executive Order #27. These are just a few of Whitman’s attacks that have been expanded upon by Gov. Christie and embraced by Gov. Murphy.

Full disclosure: I was forced out of DEP by Whitman DEP Commissioner Bob Shinn and his legal Counsel Mike Hogan (the Judge Hogan of Exxon NRD infamy) for blowing the whistle on Whitman’s efforts to lie to the public and suppress science and derail regulation regarding health risks of mercury in in freshwater fish. Surely, I have many axes to grind. That’s why all of the above is supported by links to the official documents.

Of course, with the exception of the Stop and Frisk episode, virtually none of this can be found on Whitman’s Wikipedia page, which has been scrubbed.

Third, Whitman is a hypocrite on climate change. For details, see:

• Christie Whitman Is A Flaming Hypocrite On Climate Change

• Setting the Record Straight on Christie Whitman and Global Warming

A former public official with this kind of record has no place of respect and credibility in our current public debate.

Any effort to rehabilitate that record and seek public redemption requires explicit remorse and apology, which Whitman shows no signs of.

And NJ media outlets are obligated – professionally and morally – to provide the context and the history.