Did Oil and Chemical Industry Lobbyists Quietly Kill The $1 Billion Liability Bill?

Bill Not On Aug. 23 Senate Board List – Have “forces of evil” prevailed in Trenton too?

On July 15, 2010, the Senate Environment Committee released S 2108 (Smith (D-Midddlesex)/Bateman (R-Somerset), a bill in response to the Gulf BP oil blowout. The bill would increase the NJ State oil spill liability cap from $50 million to $1 billion (see: Gulf Blowout Prompts NJ Lawmakers to Increase Polluter Liability To $1 Billion)

Oil and chemical industry lobbyists strongly opposed the bill in Committee.

Senator Beck (R-Monmouth) supported the off shore liability, but agreed with some of the industry testimony regarding differences between inland and off shore operations and liability. Beck suggested the need for amendments to address those issues, based upon data on risks.

I was next up right after Beck’s remarks, and testified about inland liability issues. I noted that BP, prior to the Gulf blowout, had a 2005 explosion and fire at a Texas refinery that killed 15 workers and caused huge toxic air emissions. I urged the Committee also to consider the huge liability associated with catastrophic release from chemical facilities regulated under the NJ Toxic Catastrophe Prevention Act program (TCPA). For example, US EPA says 15 NJ TCPA chemical facilities could kill over 100,000 people. I also mentioned Natural Resource Damage liability and shortfalls in current Spill Act funds.

Strong industry opposition and Senator Beck’s concerns lead to a compromise. Chairman Smith announced a plan to release the bill and then amend the bill on the Senate floor on August 23 to address the inland liability issues. The bill was approved unanimously with that understanding.

Smith then asked industry lobbyists and DEP to provide recommendations that were supported by data. (click on to listen to the testimony – Chairman Smith’s plan is at time 1 hour;13 minutes)

Based on this request, I’ve since advised Senator Smith that in a 2008 rulemaking proceeding, in a response to my comment (#77 below), DEP claimed that they lacked legislative authority to require that the chemical industry provide insurance or financial assurance to address catastrophic releases. In the May 5, 2008 TCPA rule adoption document, DEP stated:

77. COMMENT: The proposal should require the facility to provide financial assurance to the Department and proof of private insurance for the total economic liability that would result from release of an EHS, based upon the off site consequence analysis.

RESPONSE: The Department does not have the authority under the Act to require owners or operators to provide liability insurance for an EHS release.

So, all eyes are on the Senate Board list for August 23 – I just checked. The bill is not posted.

So, who killed the bill? Or is there some good explanation for delay?

The NJ State bill parallels a federal effort led by NJ Senator Menendez.

During the hearing, during the testimony of Jim Benton of the NJ Petroleum Council, Committee Chair Bob Smith described oil industry Washington DC lobbyists opposing the Menendez bill as “forces of evil” – but Smith claimed that those same forces did not have as much influence in Trenton as they do in DC.

Since then, the “forces of evil” (i.e. oil industry lobbyists) were successful in killing the Menendez bill to increase the cap on federal liability (see: Senate Democrats punt on oil spill bill)

Have the forces of evil prevailed in Trenton too?