On Monday, NJBIA testified against a climate-related bill and resolution that were up for discussion before the Senate Environment and Energy Committee that the association says will harm New Jersey’s economy and be counterproductive to the state’s climate goals.
Bill S-198 (Smith, D-17) calls for the state pension and annuity funds to divest from the 200 largest publicly traded fossil fuel companies.
Senate Concurrent Resolution 11 (Smith, D-17) proposes an amendment to the New Jersey Constitution that would prohibit the construction of new fossil fuel power plants.
NJBIA Deputy Chief Government Affairs Officer Ray Cantor said in both cases, the intent of harming the fossil fuel industry during the early stages of an energy transition is misguided.
“This Legislature has not banned fossil fuel use because the fact of the matter is there in no current realistic alternative,” Cantor said in written testimony to the committee.
“Climate change is a complicated worldwide issue with policy implications that will define how we live and prosper, or not, on this planet. Easy solutions, such as moratoriums, are not the answer to such a complex issue.”
In testimony opposing bill S-198, which was first introduced four years ago, Cantor said pension fund investments should be predicated on sound investment decisions, not politics or policies.
“We can all conjure up policies we prefer or companies whose behaviors we want to change by threatening divestment,” Cantor said. “We should resist doing so. Where do we draw the line? And would pension investment policies change with each change of Administration? Let’s avoid going down this path from the start.
Cantor also noted that New Jersey still has a net pension liability of nearly $80 billion, despite full pension payments being made in each of Gov. Phil Murphy’s last three budgets.
“Now is not the time to do anything other than require sound, prudent investments in legally traded companies,” Cantor said. “To do otherwise would be to jeopardize our pension funds and state’s finances and abrogate our fiduciary responsibilities.”
In testimony for SCR-11, Cantor said a prohibition of new fossil fuel power plants would be counterproductive to the state’s climate goals.
In fact, he noted, the Murphy administration has already rejected a call for the ban of new fossil fuel electric generation facilities.
“Everyone agrees, including members of the Murphy administration, that fossil fuels and, in particular natural gas, are needed over the next several decades as we move toward decarbonizing our energy system,” Cantor said.
“It is also premature to abandon these sources of energy as the world is progressing on means to use gas infrastructure for fuels such as renewable natural gas and green hydrogen, and progress is being made toward large scale carbon capture and sequestration.
“A moratorium is premature and can be destructive. A moratorium on these facilities can have devastating impacts on the state and cut off future technological advances. We saw what could happen when a state does not adequately have infrastructure in place during winter cold spells.
“Two winters ago in Texas, 200 people died, millions suffered in the cold, and billions of dollars were lost due to inadequate infrastructure and poor planning. It gets much colder here in New Jersey and for longer periods of time.”
The committee chairman, Senator Bob Smith (D-17), said the bill and resolution were for discussion purposes only on Monday, but would be subject to a vote at a later date.
