The huge oil Bayway refinery complex in northern New Jersey—unmissable on most approaches to New York City and an unfortunate state icon—now is the focus of a political and legal uproar involving original owner ExxonMobil, environmentalists and even a former state official.
The tiff follows New Jersey's March 5 confirmation of a $225-million proposed deal with the firm to settle its liability for natural resources damages at the 1,300-acre refinery in Elizabeth, owned by the oil giant from 1909 until its 1990s sale to ConocoPhillips. Exxon merged with Mobil Corp. in 1999.
New Jersey lawmakers have taken steps to undo the deal, with the state Assembly holding hearings on March 19 on the settlement, and the state Senate passing a resolution several days earlier asking a state judge to vacate it. However, the actions have followed party lines, with Republications in both houses not in favor of legislative intervention.
However, opponents to the deal claim the agreed-to damage figure is a mere fraction of billions the state had sought in a 10-year-old case on which Superior State Court Judge Michael Hogan was about to rule. They say Gov. Chris Christie (R) rushed the deal to add funds to fill budget gaps.
The Christie administration defended the agreement as "historic" and said it is in addition to required ExxonMobil site cleanup costs the firm agreed to in a 1990 consent decree. But a former state environmental chief involved in the case said in a New York Times op-ed article earlier this month that the administration directly intervened to escalate the agreement just before Hogan's ruling was to come out.
The Times first revealed the agreement before the state confirmed it.
3TM Consulting, a Houston environmental firm hired by the state, had estimated restoration of Bayway and another 476-acre property at a $2.5 billion cost, with $6.4 billion more to compensate for damage to and loss of wetlands and waterways from oil and chemical pollution.
ExxonMobil declined media comment but disputed the state cost and scope assessment as "conceptual" in its previous legal filings.
3TM President Randy Horsak, who did not respond to ENR's emailed request for information, referred other media to attorneys.
On its website, the firm did not specifically reference its work on the ExxonMobil cleanup but noted that "one of our larger efforts to date has been the review of approximately 30 banker’s size boxes of information, summarizing it into a nominal 100-page report for a group of attorneys."
Jeff Tittel, director of the New Jersey Sierra Club chapter, told ENR that Hogan was likely to order a $4-billion ExxonMobil payout in his ruling.
"The pollution on this site from Exxon was 'staggering,' according to the Christie administration's court brief," said Tittel in a statement. "The administration had no reason to settle, other than balancing the budget and giving away the store to Exxon a the expense of New Jersey's environment."
According to Tittel and other sources, natural resources damages exceeding $50 million can be used for state budget shortfalls.
Tittel and other critics, including politicians, also object to the firm's liability exemption at 16 other research and production facilities plus gas stations in New Jersey.
The state says the pact "reaffirms" ExxonMobil's mandate under previous consent orders to investigate and remediate the Bayway site and a former one in Bayonne, and "preserves" the state's right to pursue natural resource claims related to discharge of the gasoline additive MTBE at gas stations.
But some environmentalists are concerned that ExxonMobil may cap the sites rather than more fully remediate them.
The pact, whose full details will be aired in April and open for a 30-day comment, must be approved by the judge. Tittlel says he could set the settlement aside after the comment period, and opponents could sue.
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