Christie Administration Cuts Sweetheart Deal With Exxon Mobil For Bayway Refinery Pollution

$250 Million Settlement Provides Just 3 cents on the Dollar

The New York Times is reporting that the Christie Administration just reached a $250 million settlement agreement with Exxon Mobil for decades of pollution damages from the Bayway refinery, see:

• Exxon Mobil Settles With New Jersey Over Environmental Damage

The State filed the lawsuit in 2004 under the McGreevey Administration, as part of a greatly expanded “Natural Resource Damage” (NRD) program launched by DEP Commissioner Brad Campbell (see Campbell’s NRD Policy Directive). We’ve written critically about that DEP NRD program many times, e.g. see this and this and this.

[see this ABC TV investigative report on Bayway’s pattern of violations of environmental laws, where Gov. Christie denies his own Executive Order #2 on “regulatory relief”.]

There is some speculation in the NY Times story that the State’s Settlement was suspect because it was reached just before a Superior Court judge was about to issue a decision, which the Times’ sources believe would had been significantly larger than what the State settled for.

I disagree with that assessment because I’ve had limited experience with the judge, Mike Hogan, who was Whitman DEP Commissioner Bob Shinn’s legal counselor. At the time, I was a legislative analyst at DEP. Hogan and I had a dispute over a bill to extend the life of the Cape May landfill, in violation of a federally approved Settlement that required closure. I noted the conflict with federal law, and Hogan threw me out of his office in disgust, nearly shouting that the federal government could not limit a State legislature.

The Whitman DEP was strongly anti-regulatory and pro-business.

My take on Hogan was that he was legally conservative, out of the Federalist Society mold, and not likely to be the kind of judge to stretch the law to hold a major corporation accountable.

The State’s lawsuit sought $8.9 BILLION in restoration and compensation for toxic pollution of over 1,500 acres of soil, wetlands, fish & wildlife, and marshlands:

“Today, many of these dredge fill areas still look and smell like petroleum waste dumps,” the report continues. “Spilled materials from pipeline ruptures, tank failures or overflows, and explosions have resulted in widespread groundwater, soil and sediment contamination.”

The attorney general’s office said in its brief in November that the sites had been “adversely affected by or buried under the discharge of hazardous substances,” including over 600 identified chemicals.

Although the NRD settlement money is supposed to go to ecological restoration and public compensation for lost use of the natural resources, the Christie Administration is likely to divert the settlement proceeds into the General Fund to pay for Christie’s multi-billion tax cuts for corporations. That’s what they recently did in diverting $140 million of a recent $190 million settlement on the Passaic River dioxin contamination.

As we’ve written previously, remarkably, although State environmental groups have blasted that $140 million Passaic River settlement diversion, NJ’s “Keep It Green Coalition” opposed Constitutionally dedicating these NRD settlement funds to the Open Space Fund.

So the Bayway settlement, even though for just 3 cents on the dollar, shines a bright like on the bad judgement and HUGE KIG missed opportunity – one of the biggest blunders of all time.

This is a breaking story. My purpose here was merely to put the deal in some NJ context.

We will be providing additional thoughts on this matter as the Settlement documents are made public.

There will also be an opportunity for public comment.