NJBIA testified on Monday against a climate-related bill and resolution that the association says will harm New Jersey’s economy and be counterproductive to the state’s climate goals.
The Senate Energy and Environment Committee voted to release bill S-198, which calls for the state pension and annuity funds to divest from the 200 largest publicly traded fossil fuel companies, and Senate Concurrent Resolution 11, which proposes an amendment to the New Jersey Constitution that would prohibit the construction of new fossil fuel power plants.
Committee Chairman Bob Smith, the sponsor of both, said amendments would be made later in the course of the legislative process to address some of the concerns raised by NJBIA and other stakeholders during the committee hearing.
NJBIA Deputy Chief Government Affairs Officer Ray Cantor said that the intent of both S-198 and SCR11 to harm 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.
“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 previous 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 – especially now given New Jersey’s anticipated budget challenges.
“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 previous 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.”
Cantor also said SCR-11 could be misinterpeted to mean that new emergency generator backup systems installed by homeowners and businesses are prohibited if they use fossil fuels (coal, natural gas, oil, or petroleum products) to generate power. The committee chairman promised that the concurrent resolution would be amended on the Senate floor to make it clear emergency backup systems for home and businesses are specifically excluded.
