New Jersey Eyes Fees on Oil and Gas Producers for Climate Superfund

It’s not an accident that “The Sopranos,” the quintessential show about New Jersey, opens with its main character driving past gasoline and oil storage tanks along the New Jersey Turnpike.

From the outskirts of New York to the Delaware River shoreline across from Philadelphia, New Jersey is home to numerous oil and natural gas facilities. They would be charged fees to help the state fight the effects of climate change under a bill being considered in the Legislature.

The measure, which was advanced last week in a state Senate committee, aims to create a Climate Superfund similar to the pot of money assembled by the federal government to clean up toxic waste by charging petroleum and chemical companies an extra tax to fund ongoing cleanups.

It’s a tactic being used or considered in numerous other states, including Vermont, which recently enacted such a law. New York, Maryland, Massachusetts and California are among states considering doing likewise.

The burning of fossil fuels including oil, gas and coal is a major contributor to climate change.

“This is simply a cost recovery tool,” said the bill’s sponsor, Democratic Sen. John McKeon. “This is about who pays for the damage: either the taxpayer pays, or the polluter pays.”

$25 Billion

The proposal would impose as-yet unspecified charges on fossil fuel producers that would go to the state Department of Environmental Protection, which would distribute the money as grants to pay for programs to adapt to climate change and make the state more resilient to severe weather. McKeon said it could easily be $25 billion.

“This money will be used by mom and pop who need to elevate their house because of flooding, or to build a sea wall,” McKeon said.

Molly Cleary of the Clean Water Action environmental group voiced an oft-repeated sentiment during the hearing: that fuel producers should have to pay for the consequences of their products.

“The regular, everyday people are not the ones that created this crisis,” she said.

Business Lobby

New Jersey’s business lobby is already working against the bill. Ray Cantor, an official with the New Jersey Business and Industry Association, said the bill will accomplish nothing beyond raising the cost of gasoline for motorists, and gas and oil for home heating customers.

“There are many things wrong with the bill, beyond the fact that it seeks to impose a retroactive liability on companies that were providing a legal, necessary and vital product to the citizens of the state,” he said. “It’s unconstitutionally vague in assessments of costs, and will likely be preempted by federal law. It will do nothing to reduce greenhouse gas emissions or impact climate change.”

Alex Daniel, an attorney for the New Jersey Civil Justice Institute, said the bill impermissibly reaches beyond New Jersey’s borders to tax the actions of companies in other states.

“We’re reaching back in time to penalize people for activities that were absolutely legal at the time, and were encouraged by governments,” he said. “Right now, fossil fuels, for better or worse, are responsible for most of the energy being produced in this country.”

Ed Waters of the Chemistry Council of New Jersey, said the state’s two active oil refineries support 35,000 jobs and contribute $7 billion a year to the state’s economy.

Damage Assessment

The state would take two years to assess damages to New Jersey that have resulted from greenhouse gas emissions from the burning of fossil fuels since 1995, and would establish “that each responsible party is strictly liable” for those damages.

“It’s pretty clear that News Jerseyans don’t want to pay more taxes,” said Ben Dziobek, executive director of Climate Revolution Action Network, which supports recovering the costs of climate adaptation from fossil fuel companies. We’ve seen fires i n every inch of our state, flooding in every inch of our state, drought in every inch of our state. It’s clear that big business doesn’t want to pay for the things that it has done.”

An identical bill is pending in the state Assembly but has yet to have a committee hearing. The measure must clear committees in both houses and be approved by the full Legislature before heading to the desk of Democratic Gov. Phil Murphy.