The controversial and contentious Climate Superfund Act bill passed another Assembly committee on Tuesday, but not before opposition and some committee members questioned why the Legislature would advance an unconstitutional bill that would raise energy costs and lead to job loss in a state already struggling with its business climate.
The Assembly Appropriations Committee advanced bill A-3575 along party lines.
The bill seeks to retroactively penalize New Jersey fossil fuel companies $50 billion for legally providing an essential product used by all New Jerseyans, including supporters of the bill, to thrive and survive.
NJBIA is leading a large coalition to stop the bill, as it is unconstitutional, retroactively penalizes companies that followed the law and their permits, raises energy costs in the midst of an energy affordability crisis and will likely reduce jobs.
New Jersey once had eight refineries and is now home to just two.
“It's going to result in a loss of jobs,” said NJBIA Deputy Chief Government Affairs Officer Ray Cantor.
“And it's going to very clearly send a wrong message to the business community that New Jersey is not only not open to business, but it's hostile to business.
“Do not think just because you're (a) big (company), you can't go away. When companies look where to expand and where to keep in business, local policies matter. This bill will matter to those 35,000 jobs in those two refineries.”
Some of the most pointed comments about the bill came from Republican lawmakers in the committee, most notably Assemblyman Jay Webber (R-26) and Assemblyman Greg Myhre (R-9).
Webber, in fact, asked those testifying in support of the bill if they had factored in the cost-positives in using fossil fuels in determining a $50 billion figure.
“It's pretty obvious what this bill is an ideologically motivated cash grab, playing to the worst of class warfare,” Webber said. “It will have a significant impact on our economy and sends a terrible message to those who try to invest in New Jersey
“And it really ignores the beneficial impacts (of fossil fuels). And now you want to turn around and retroactively tax them for that…. shame on you, shame on you.”
“I think we're talking about singling out an industry that enables all other industries and our way of life to even function,” Myhre added. “Whether it's taking a train made out of steel over steel rails, steel industry is a high carbon emitter…You leave that train, you walk on the concrete sidewalk which is also one of the largest carbon emitting industries on earth.
“Your glasses, your clothing, whatever it might be, we all use it. When you see emissions going down in the U.S., whether people want to talk about it or not, and when you see where the largest carbon emitters are abroad and this bill does nothing to tackle that, I think it just is another way to get money.”
Other voices that testified against the Climate Superfund Act included:
New Jersey State Chamber of Commerce Executive Vice President Michael Egenton: “I take a real big issue of calling my members polluters when they were given the legal authority, both from EPA and DEP, to produce a product and service that we all use.
“I would bet if we did a poll in here, a majority of people drove here using that product. Plus, the other ancillary products that come from petroleum, whether in the agricultural business, the pharmaceutical business or the tech business.
“And look, I've been in many committee hearings already on this issue. I'm the New Jersey State Chamber of Commerce.
“And look, I've been before this committee many, many years over several budgets. Basic Economics 101. When the pressure is on my members and they're producing a product or service, what do they ultimately do? They ultimately have to pass that cost on or make some modifications, don't hire people. That is ultimately what's going to happen.”
Chemistry Council of New Jersey Executive Director Dennis Hart:
“Number one, this issue is currently pending in front of the United States Supreme Court, so it makes no sense for New Jersey to act now, and why not wait until this, the court resolves that?
“Secondly, what the bill does is it assigns $50 billion worth of fees to be paid by companies. The people that we are asking money for have not committed any crimes, they haven't done anything in negligence, they haven't violated any permits, and they haven't broken any laws. But we would like them to give us $50 billion. So that would result in years of litigation from the companies that are being asked to give the money.
“It sends a very bad signal to the business community that companies can be fined for selling a legal product of, and for being involved in a legal industry at that time. That's going to make it very difficult for New Jersey, as we try to bring more business back to the state and into the state.”
New Jersey Civil Justice Institute President Elissa Frank: “First and most importantly, this bill is likely preempted by federal law. Congress enacted the Clean Air Act to establish a comprehensive national framework for regulating greenhouse gas emissions, delegating primary authority to the United States Environmental Protection Agency.
“While states play an important role within that framework, they do not have the authority to regulate out-of-state emissions or impose liability for global effects of greenhouse gas emissions. By attempting to do so, this bill directly conflicts with the federal regulatory scheme.
“Next, this bill also raises significant due process concerns. It imposes retroactive liability on businesses for conduct that federal and state governments not only permitted but actively encouraged for decades as part of our nation's energy policy. Imposing potentially enormous financial liability years after the fact fundamentally upends settled expectations and unfairly targets a small group of companies while ignoring the overwhelming majority of global greenhouse gas emitters.”
Paulsboro Mayor John Giovannitti: “I remember when Eagle Point (refinery in West Deptford) closed and how it was devastating to families because some people from Paulsboro worked there…
"The Paulsboro Refinery has been a partner. They meet with local representatives of the community. They sponsor activities. They do a lot for the community and it's not just surface. So we can't lose them.”
Eric Blomgren, Executive Director, New Jersey Energy Marketers Group: “These companies are supplying a product that is genuinely in-demand. I don’t think the state would want (to prevent) that demand from being met. Right now, the Strait of Hormuz closure has only restricted about 10% of oil flow in the world and it has been a disaster for our consumers.”
Other points detailed in Cantor’s written testimony regarding the impact of the bill include:
- Negative impacts on consumers;
- Unfairness of imposing a retroactive assessment;
- The impacts on jobs and the economy;
- It ignores the necessity and benefits of fossil fuels;
- It is unconstitutional;
- It sends the wrong message to the business community;
- Pension funds and the middle class are large owners of fossil fuel company stock;
- It does nothing to address climate change or to promote decarbonization
- It is not supported by mainstream science.
To see Cantor’s full written testimony, click here.
