While the formerly named Climate Superfund Act advanced in a marathon Senate Budget and Appropriations Committee hearing on Thursday night, it appears the controversial bill that would set a dangerous business precedent for New Jersey’s business community and increase fuel costs for consumers will not likely be advancing any further in the waning days of the current legislative session.
Senate Budget Chair Paul Sarlo and fellow Democratic Senator John Burzichelli both voted ‘yes’ on bill S-3545, but both took issue with the provisions of the bill and warned they would not be voting ‘yes’ if the bill were to get a vote before the full Senate when the lame duck session wraps up on Monday and Tuesday.
Further, to the dismay of the bill’s sponsors, the Assembly has not scheduled a vote for the legislation either.
The bill, which was renamed on Thursday as the ‘Polluters Pay to Make New Jersey Affordable Act,' seeks to retroactively penalize New Jersey companies $50 billion for legally providing fossil fuels that are essential to residents' survival and prosperity, the cost of which the business community and legislators argued will be filtered down to consumers.
“It is disappointing that this bill was released given the enormous impact on affordability in New Jersey, while also setting a chilling precedent that a New Jersey company can be retroactively targeted for billions of dollars in penalties, even if it complied with the law,” NJBIA Deputy Chief Government Affairs Officer Ray Cantor said.
“However, we do appreciate the comments from the committee today, both for and against. And we are optimistic based on comments by Chairman Sarlo that this bill will not advance in this lame duck session.
“Until then, we call upon our legislative leadership to reject this unaffordable and unfair bill and consider the severe consequences on our energy affordability and our business reputation. And we look forward to further conversations.”
SUPPORTERS CHALLENGED
While sponsors Sen. John McKeon (D-27) and Sen. Bob Smith (D-17), as well as many from New Jersey’s environmental committee, made their best efforts to message the need to “make polluters pay,” the business community and legislators from both sides of the aisle pointed out that, in fact, it is the people of New Jersey who require and use fossil fuel products every day that are actually the ones doing the polluting.
“The fossil fuel industry is created by all of us,” Senator Declan O’Scanlon (R-13) said. “Every single person that's here right now, you burned fossil fuels to get here, in one form or another, even if you drove an electric car.
“Now we are going to retroactively fine them for doing something that was perfectly legal and that we all wanted. And we are the first ones to complain en masse when fuel prices go up. So to point to them as solely the culprits here when we're all at fault, I think is unfair.”
“Each and every one of us in this room, whether you're an environmentalist or not, you're relying on (fossil fuels) one way or another,” Sarlo added. “You are relying on them one way or another in your everyday life, OK? So just to say we're going to turn the spigot off (on fossil fuels) is not practical or reasonable.”
The business community and lawmakers also took aim at McKeon’s effort to compare the Climate Superfund to making the tobacco industry pay for the addictive nature of cigarettes.
“We do not have a strategic cigarette reserve in this country,” deadpanned Dennis Hart, President and CEO of the Chemistry Council of New Jersey. “We have a strategic oil reserve for the protection of our economy and the protection of our country.
“So the comparison between a vice like tobacco and something that's used every day is just not appropriate.”
“I really think that the analogy between fossil fuels and tobacco is severely intellectually disingenuous,” added Senator Mike Testa (R-1).
BUSINESS COMMUNITY VOICES
New Jersey's business community came out en masse to oppose the bill, reminding the committee of the impending costs to New Jersey residents should a law pass, and the terrible message the bill sends by retroactively penalizing companies billions of dollars by providing a legal and necessary product.
Here is a small sampling from nearly one hour of testimony:
NJBIA President and CEO Michele Siekerka: "Energy affordability was the top issue in our recent election and in our most recent NJBIA Business Outlook Survey, where businesses, for the first time, cited it as their number one concern. Our job creators said that that was their number one cost concern in New Jersey. This bill only exacerbates that. Why? Because basic economies – economics tells us that rising costs are ultimately passed on to consumers, whether that's going to be at the pump, through their utility bills, or higher prices for goods and services.
"The risk of those downstream impacts remain to the two refineries remaining in New Jersey, the two most significant on our eastern seaboard, Bayway and Paulsboro. What do they contribute to our state? Let me tell you: $1.4 billion dollars in state and local taxes, $4 billion in labor income, 35,700 jobs statewide. They also generate $8.4 billion for our national economy. If we undermine these investments, we threaten shareholder investment, including pensions, 401(k)s, as well as the innovation investments needed to make the ongoing energy demands and investments that we need."
NJBIA Deputy Chief Government Affairs Officer Ray Cantor: "Does anyone really believe that these costs are not going to be passed on to consumers? That this is a free lunch and there will be no impacts? And if this passes, in five years, they will be back for (more).
"This bill does not ban fossil fuels. If they are so bad, why aren't we banning them? We're not banning them because we need fossil fuels. We've needed them from the beginning and we're gonna need them for decades into the future. Does anyone here seriously doubt that we need fossil fuels? Fossil fuels are the reason we have the economy we have today. They have created the, the greatest quality of life and living standards that humanity has ever seen.
New Jersey State Chamber of Commerce Executive Vice President Michael Egenton: "You set a bad precedent like this, they're going after everybody else. I've seen it before. There was mention about, uh, the tobacco settlement.
"There has to be a better way to do this. Lame duck is not the time to do it."
Chemistry Council of New Jersey Executive Director Dennis Hart: "The thing that I don't understand about this legislation is just last month, Governor Murphy issued an executive order declaring an emergency because there was disruption in the propane supply in the state.
"So, on the one hand, you have the governor saying, 'This fossil fuel is so important to our economy that a mere slowdown, disruption in the distribution of propane is of an emergency to this state.' On the other hand, this bill then penalizes that same company for providing propane."
Commerce and Industry Association of New Jersey President Anthony Russo: "This really is personal to me, because when I hear that 'these companies polluted,' I always get offended by it. I did spend four years at the Department of Environmental Protection. I used to write water permits, but I did some air permits. These companies obtained permits to discharge and to emit. So how can we say they polluted? They were doing everything according to the law, and now what we're going to do is we're going to do a 30-year look-back and say, 'Let's come up with a number and punish these companies?'
"Makes no business sense at all, and it should be withdrawn flat out."
New Jersey Gasoline Convenience Automotive Association Executive Director Eric Blomgren: "The money assessed from these companies has to come from somewhere. There's no great vault with billions of dollars sitting there that they'll draw down from. It'll be collected from consumers in the form of higher prices for products, just as the cost of President Trump's tariffs is being passed on to the public.
Chamber of Commerce of Southern New Jersey Director of Government Affairs Hilary Chebra: "While we appreciate refineries being removed from the bill, the downstream impact on these refineries will certainly be felt, and that will be a huge economic impact for our region. We're very concerned about imposing retroactive liability on companies for past legal and needed conduct."
