Re-examining the Exxon Deal

Last month New York City Mayor Bill de Blasio expressed concerns that New Jersey Gov. Chris Christie’s settlement with Exxon to resolve $9 billion in environmental claims for 3 cents on the dollar was inadequate to address pollution that experts say impacted the entire estuary the two states share.

In a sign that the bi-state controversy continues to heat up, other New York City elected officials and civic leaders are suggesting that the $225 million Exxon deal is a major lost opportunity to fund the restoration of saltwater marshes and fresh water wetlands, which the bi-state estuary badly needs to buffer the coast from ongoing sea-level rise and the next Superstorm Sandy.

New Jersey’s initial claims alleged Exxon had degraded and destroyed at least 1,500 acres of wetlands in and around the company’s former sites in Bayonne and Linden, which they had operated for close to a century. Since The New York Times first broke the story, it was disclosed that the deal also covers 16 other contaminated Exxon sites, as well as several hundred gas stations.

The natural resource damages claims at issue in the deal are paid to compensate the public for the loss of the use of natural resources like wetlands, waterways and shorelines due to contamination. But the Christie administration is expected to divert to the state’s general fund anything in excess of $50 million, as it has with past NRD awards.

The Christie administration has defended the settlement as the largest such natural resource damages claim in state history, which resolved over a decade of pending litigation. Jack Balagia, Exxon’s general counsel, blasted the state’s initial $8.9 billion claim as a number “pulled out of thin air.”

COUNCIL HEARINGS POSSIBLE

“I definitely believe that the paltry New Jersey Exxon settlement will undermine any attempts to secure a viable future for wetland restoration in Newark Bay,” Donovan Richards, chairman of the New York City Council Committee on Environmental Protection, told City & State. “Wetlands are a proven natural buffer against hurricanes, superstorms and other high-impact weather-related events. Any long-term sustainability planning for New York and for New Jersey must prioritize our first lines of defense.”

“As the council representative for the eastern side of the peninsula, protecting communities along the coast is a primary concern,” he added. “Last year I held a hearing with the Waterfronts Committee on the impact of the Rahway Arch project on Staten Island, and would definitely consider doing something similar to discuss the impact of the N.J. Exxon settlement and the decay of infrastructure on the future on New York City.”

The city’s increasing interest in the Exxon deal comes as NY/NJ Baykeeper, the Sierra Club and several other environmental groups are encouraging participation in the 60-day public comment period. That period started earlier this month and ends in early June.

Under New Jersey procedure, the state’s Department of Environmental Protection has to review the public comments and then file a report with recommendations to the state judge overseeing the Exxon case. Should the court approve the deal, settlement opponents can appeal the decision in the state’s Appellate Division.

CB1 GETS IN THE MIX

Last week, lower Manhattan’s Community Board 1 Planning Committee, which knows all too well the effects of a Sandy-like storm, voted to weigh in on the Exxon deal during the public comment period. The unanimous vote to author a resolution calling for a more substantial Exxon settlement to fund wetland and saltwater marsh restoration came after a presentation from Chris Len, staff attorney for NY/NJ Baykeeper.

The CB1 members were transfixed during Len’s presentation, which showed just how close some of New Jersey’s hottest legacy toxic spots were to New York City. Len said Newark Bay contains some of the most critical yet vulnerable infrastructure in the region, which would greatly benefit from marshland and wetland buffers. He cited as an example how Sandy’s massive 12-foot storm surge took out the Passaic Valley Sewerage Commission’s plant, the fifth largest in the nation, which treats waste for 3 million northern New Jersey residents.

With the plant inundated for weeks after Sandy, billions of gallons of untreated and partially treated human waste flowed out on the bi-state estuary, which was also hit by the untreated waste from several other failed sewer plants in the region.

Newark Bay is also home to Port Authority of New York and New Jersey cargo handling facilities. The Sandy surge inundated thousands of new vehicles worth $400 million and caused havoc with the bi-state agency’s massive cargo cranes, disrupting commerce. Over on the Arthur Kill—where Exxon’s Bayway facility is now run by Phillips 66—the surge knocked out the refinery’s ability to produce gasoline, which disrupted fuel supplies throughout the region.

CB1 Chairwoman Catherine McVay Hughes is a civil engineer who majored in hydrogeology. Hughes says the most cost-effective storm resiliency plan is to revive and restore wetlands and saltwater marshes throughout the estuary the two states share. “Community Board 1 cares about what happens in New Jersey because the water and wetlands are interconnected, and if there is a loss of wetlands, or a failure to replace ones degraded or destroyed, the impact will not only be felt in New Jersey but in lower Manhattan as well,” Hughes told City & State.

“Through a more just settlement with Exxon, it’s our hope to get the kind of financial resources we need to restore the wetlands and marshes that could really make a difference for both states,” she said.

‘A FRACTION OF WHAT WE WILL NEED’

Roland Lewis is the CEO and president of the Metropolitan Waterfront Alliance, a bi-state coalition of 800 organizations committed to the long-term sustainability of the New York and New Jersey waterfront.

In 2011, the MWA’s harbor-wide strategies to promote the long-term sustainability of the estuary were adopted by the Bloomberg administration’s NYC Vision 2020 as the comprehensive waterfront plan for New York City. But in New Jersey, the MWA does not seem to have gotten the same political traction.

Lewis says the controversy over the Exxon settlement comes at a time when there are important questions about just how the region is going to fund the major investments required to meet the challenges of sea-level rise and future Sandy-like storms.

Earlier this year in the natural science journal Nature Communication, scientists reported that from 2009 to 2010 there was a 4-inch sea level rise from Newfoundland to the Port of New York, which the report called “an extreme sea level rise event.”

“What people don’t realize is the approximately $13 billion we’ve already committed is just a fraction of what we will need to protect ourselves from the next Sandy-scale storm,” Lewis said. “We know it’s a down payment on our resiliency, but just how much of a percentage of what’s required is it? Is it 10 percent, 20 percent or 30 percent?”

The MWA is currently undertaking a study that Lewis hopes will answer this critical question.

“We are spending money on studies for things like floodgates for Newtown Creek, but how much will it cost to build the actual projects? Budgets are tight everywhere,” he said. “There is an accounting we have to do to see just what we need to spend to protect ourselves and where that money will come from.”

Lewis says the kind of wetland and saltwater marsh restoration NY/NJ Baykeeper wants to see would be a wise investment in the resiliency and long-term viability of the entire bi-state estuary. “Wetlands and mashes soften the blow of a Sandy by mitigating the wave action and, as a result, save lives,” he said. “There’s a real need for this restoration, especially for New Jersey.”