NJBIA testified Monday against a controversial climate superfund bill, which would impose a $50 billion assessment retroactively on fossil fuel companies for providing a legal, regulated product, noting the bill will impact consumers, put thousands of New Jersey refinery jobs at risk, and worsen the state’s reputation as being hostile to business.
Representatives of numerous business groups, including NJBIA Deputy Chief Government Affairs Officer Ray Cantor, took issue with testimony given by Columbia Business School
“climate economist” Gernot Wagner, who told the Senate Environment & Energy Committee that global markets set gas prices and claimed the legislation’s only adverse impact would be on shareholders of oil companies.
Cantor pointed out that shareholders include millions of New Jersey residents who have their public pension funds or private 401(k) retirement savings accounts invested in fossil fuel companies. He also took issue with Wagner’s statement that the $65 billion in cleanup penalties paid by BP after the 2010 Deepwater Horizon oil rig explosion demonstrated that penalties imposed on fossil fuel companies don’t impact gas prices at the pump.
“The BP scenario, with all due respect, is not at all relevant to the case we have before us here (with this bill),” Cantor said. “It was one company, a one-time event, environmental liability. In this case, we're trying to impose charges against about 80% of the market, and again, this is going to be a multiple state type of scenario.”
Cantor was referring to the fact that New York and Vermont already have climate superfund laws, and numerous other states have similar bills pending. (Costly legal challenges have delayed implementation of the New York and Vermont laws).
Jobs and New Jersey’s economy would also be harmed by this legislation, Cantor said. New Jersey, once home to six oil refineries 20 years ago, is now down to two, Cantor said. The 35,000 jobs associated with these remaining two facilities in Linden and Paulsboro would be in jeopardy if this legislation were to become law, and if those refineries closed.
“The Legislature is sending a strong message, as we heard from the Assembly Environment Committee last week .... that these jobs should go,” Cantor said. “We don’t want these jobs to go. Those two refineries in New Jersey support about 35,000 jobs, good paying jobs in the state, and those jobs, every one of them, have families behind them, they have communities behind them.”
Cantor also noted the message the bill sends to the business community overall, noting Samsung recently announced it was moving its U.S. corporate headquarters from New Jersey to Texas. A week earlier, ExxonMobil, whose predecessor Standard Oil of New Jersey had been headquartered here since the 1880s, also changed its corporate home to Texas.
“Who is going to want to do business in New Jersey when you can do everything right and still be hit with a $50 billion” penalty applied retroactively to a legal product produced under strict environmental regulations, Cantor asked.
“We strongly oppose this legislation,” Cantor said. “We do think it's going to have an impact on consumers, and definitely on shareholders. We're concerned about the jobs in New Jersey, and we are concerned about the message it sends to the business community.”
To read written testimony that Cantor submitted to the committee, go here.
After several hours of testimony, the Senate Environment & Energy Committee voted 3-2 to release S-2338 as a committee substitute. The bill is sponsored by the committee vice-chairman, Senator John McKeon (D-27), and the committee chairman, Senator Bob Smith (D-17).
