NYC Lawmakers Blast Controversial NJ-Exxon Deal

New Jersey Gov. Chris Christie’s controversial deal with Exxon Mobil to settle an $8.9 billion natural resources damage claim for less than 3 cents on the dollar is now coming under additional scrutiny from New York City elected officials. 

Officials claim the settlement will shortchange the public because the energy giant's toxic hotspots located in Linden and Bayonne have contaminated the marshes and wetlands along water bodies like the Arthur Kill tidal strait and Newark Bay, both of which share shoreline with New York. They have also raised concerns about the precedent set by the Christie administration last year of diverting the proceeds from these kinds of environmental damage claims into the state’s general fund and away from environmental restoration projects.   

“Exxon must be held accountable and the size of the settlement needs to send a message to other polluters that decades of this kind of pollution has a consequence,” said New York City Public Advocate Letitia James. “Any diversion of the settlement money to any other purpose other than ecological restoration is a betrayal of the public trust.”

For its part the Christie administration has hailed the $225 million pact as the largest natural resource damage settlement of its kind in state history, and one that comes on top of the oil company’s ongoing work to remediate the two sites as required by a 1991 administrative consent order.   

According to a statement released by acting Attorney General John Hoffman the deal with Exxon also “preserves the state’s claims against Exxon Mobil” for natural resource damages “to the Arthur Kill and Newark Bay and other water bodies impacted by Exxon Mobil’s operations.” 

But New Jersey's Democrat-controlled state Senate passed a resolution on Monday calling for a judge to reject the settlement, with one lawmaker commenting that the deal "stinks."

Starting next month, the public will have 30 days to comment on the proposed settlement. Afterward the New Jersey Department of Environmental Protection will review the comments and file its own report with the judge presiding over the Exxon litigation. The agreement could also be challenged in the state courts. 

“These waterways don’t belong to a private company and they need to be restored to their intended uses and to the state that they would have existed in but for the actions of the company,” said Mitchell Bernard, head of litigation for the Natural Resources Defense Council. Bernard says his organization is working with New Jersey environmentalists and reviewing their legal options to intervene in the case. 

New Jersey initiated the legal action against Exxon Mobile in 2004. In 2008 the foundation was set for what promised to be a substantial damages award after a Union County judge ruled that Exxon was indeed liable for the contamination in Bayonne and Linden. 

“It was estimated in 1977 that at least some seven million gallons of oil ranging in thickness from 7 to 17 feet are contained in the soil and groundwater underlying a portion of the former Bayonne site alone,” wrote former Judge Ross R. Anzaldi. The level of hydrocarbon contamination was so high one creek was covered with “a gelatinous, oily emulsion overlying grey silt.”

Exxon Mobil’s corporate predecessor, Standard Oil, first established a presence in these parts in the 1870s and by the 1920s was operating one of the world's largest refineries in Bayonne. Exxon’s Bayway site in Linden, which it sold several years ago, was established in the early 20th century. 

The close proximity of Staten Island to the Bayway complex on the New Jersey side was highlighted when an explosion in 1970 blew out the windows of some Staten Island homes. In 1990 a cracked underground pipeline dumped more than a half million gallons of fuel into the Arthur Kill, making a deadly mess for the marine life and shore birds on both sides of the state line.  

“What we do in New Jersey has a direct impact throughout the estuary in both states because all that water and sediments are moving up and down with the tide,” said Dr. Angela Cristini, a professor at Ramapo College and a leading expert on the region’s tidal marshes. “It is an important waterway for commerce but critical for the marine ecology.”

The legal basis for assessing natural resource damages can be traced back to the concept that wetlands, waterways, the sea coast and the all the wildlife contained therein are all held in a public trust by the state. This notion of commonwealth has roots in Roman law and the Magna Carta, and was affirmed in the landmark 1842 U.S. Supreme Court decision Martin vs. Waddell, which held that a private owner could not lay claim to an oyster bed under the surface waters of the Raritan Bay in New Jersey. 

“By the law of nature these things are common to all mankind—the air, running water, the sea and consequently  the shore of the sea,” wrote Chief Justice Roger Taney.   

Unlike the storied Hudson River, which both states also share, the Newark Bay has historically been a kind of orphan whose rich history as a productive fishery and source of clams and oysters has largely been forgotten. 

“There are many waterways in the region like the Newark Bay that get little or no public attention,” said Suzanne Mattei, who was the former Region 2 Director for the New York Department of Environmental Conservation. “But the Hudson River had Pete Seeger and the kind of charisma that’s inspired the Hudson River Foundation, the Hudson River Estuary, the Hudson River Park Conservancy and of course the Clearwater.”

Environmentalists say its hard for the public to realize what they have lost to pollution because there’s no one living who remembers just how productive the estuary once was. An 1885 report by the New York State Commissioner of Fisheries found that there were still 400 boats harvesting oysters as part of an industry that supported 635 families. That year 765 million oysters were harvested and close to 200,000 bushels of oysters were exported to Europe. 

“There was a time in the 18th century when New Yorkers ate more oyster meat then every other kind of meat combined,” said Robert F. Kennedy Jr., an environmental attorney and president of the Waterkeeper Alliance. “Keep in mind that just a gallon of spilled oil kills all the fish in a million gallons of water."

Kennedy, who says the toxic legacy of the Exxon Mobil sites goes back for decades, is sharply critical of the Christie administration's settlement. “This is an active theft,” he said. “We own these wetlands. It's like saying to a gang that robs a bank that they just have to pay back 3 cents of every dollar they stole. Exxon made its share holders billions while impoverishing New Yorkers by destroying the public commons.”  

New York City Councilman I. Daneek Miller, who represents southeast Queens, says he knows first-hand the challenge of going up against Exxon Mobil. New York City was once locked in a decade-long court battle with the Houston-based energy giant over allegations that its methyl-tertiary butyl ether, or MTBE, contaminated several drinking water wells in South Jamaica, Queens.

In 2009 a jury awarded the city $104 million from Exxon Mobil, but the company fought the judgment all the way to the U.S. Supreme Court, which rejected their appeal in April of 2014.

Miller says he’s troubled by the actions of the Christie administration. 

“The corporation has the resources and they should be held accountable and I think this body has a responsibility to insure that they are held accountable for the damage that was done,” Miller said. “They’ve made a lot of money throughout the globe.” 

A former president of Local 1056 of the Amalgamated Transportation Union, Miller would like to see city Comptroller Scott Stringer and New York State Comptroller Tom DiNapoli initiate shareholder resolutions calling on Exxon Mobil to fully fund the restoration of Newark Bay for both states. 

In the past both Stringer and DiNapoli have used their leverage as watchdogs over hundreds of billions of dollars in public pension stock holdings to champion corporate governance reform, social justice and environmental causes.   

“It does sound like a very small settlement,” said City Councilman Vincent Gentile, the Democratic candidate for the Brooklyn and Staten Island House seat vacated by former Rep. Michael Grimm, who resigned after being convicted on corruption charges. “It is a concern to me and we are looking into it.”

It is a point upon which Gentile's congressional opponent can also agree. 

"As the son of a longshoreman, I understand how important it is to protect our natural resources,” said Daniel Donovan, Staten Island's District Attorney and Republican candidate for Grimm's vacated House seat. “Staten Island shares in as much as the waterway as New Jersey does. Any agreement with Exxon must ensure that the Arthur Kill and the surrounding affected areas are fully remediated and steps are taken to protect this from happening again."

The controversy comes as experts say the estuary’s water quality has continued to improve thanks to billions of dollars in sewer plant construction throughout the region. “We are cleaning up the water quality,” said Debbie Mans of NY/NJ Baykeeper. “Now it is time to clean up these hot spots.” 

Environmentalists say restoring the salt water marshes and fresh water wetlands will accelerate the rebound of the fishery while shoring up the coastlines in the face of rising sea levels and extreme weather events like Hurricane Sandy. 

“These wetlands give us the resiliency that can’t be engineered,” Kennedy said. 

But they say more is needed.

 Cristini, the professor at Ramapo College, said she is optimistic that if both states pulled together, the fishery that once fed so many could be re-established.  

“Unfortunately we don’t have a group of folks from both states talking about this,” she said. “We need a bi-state committee that looks at how best we can do this restoration.” 

UPDATE:

A reporter caught up with New York City Mayor Bill de Blasio, who also weighed in on the settlement:

“I am absolutely concerned,” Mayor Bill de Blasio told reporters at an unrelated event. “The Bayonne and Linden sites where Exxon operated are situated on the Newark Bay estuary complex, which both New York City and New Jersey share.”

“There is supposed to be a rigorous process for insuring that the environment is restored. I don’t know the details of this settlement but if the dollar figure is so low that the work can’t be done I am very concerned about what that means for the people of New York and we will certainly look into it further and decide what course of action we want to take.”