The New Jersey Senate Budget and Appropriations Committee advanced the bill formerly known as the Climate Superfund Act, now renamed the “Polluters Pay to Make New Jersey Affordable Act,” during a lengthy hearing on Thursday night. However, it appears unlikely that the bill will progress further before the current legislative session ends.
Senate Budget Chair Paul Sarlo and Senator John Burzichelli both voted in favor of bill S-3545 but expressed concerns about its provisions. Both indicated they would not support the bill if it reached a vote in the full Senate at the end of the lame duck session. The Assembly has also not scheduled a vote for this legislation.
The proposed law seeks to retroactively fine New Jersey companies $50 billion for legally providing fossil fuels, with opponents arguing these costs will ultimately be passed on to consumers. Members of the business community and legislators voiced concerns about potential impacts on energy affordability and business reputation.
“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,” said Ray Cantor, Deputy Chief Government Affairs Officer at NJBIA.
“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 of the bill, including Senators John McKeon and Bob Smith, argued for making polluters pay. However, critics countered that fossil fuel use is widespread among residents. Senator Declan O’Scanlon said: “The fossil fuel industry is created by all of us. 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.”
Senator Sarlo added: “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. 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 analogy between holding fossil fuel companies accountable and tobacco industry settlements was questioned by some business leaders and lawmakers. Dennis Hart, President and CEO of the Chemistry Council of New Jersey stated: “We do not have a strategic cigarette reserve in this country. 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.” Senator Mike Testa added: “I really think that the analogy between fossil fuels and tobacco is severely intellectually disingenuous.”
Business organizations expressed strong opposition during testimony before lawmakers:
NJBIA President and CEO Michele Siekerka said: “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 ongoing energy demands.”
Ray Cantor from NJBIA commented: “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… Does anyone here seriously doubt that we need fossil fuels? Fossil fuels are reason we have economy we have today.”
Michael Egenton from New Jersey State Chamber of Commerce said: “You set a bad precedent like this they’re going after everybody else… There has to be a better way to do this…”
Dennis Hart from Chemistry Council pointed out conflicting policy signals: “Just last month Governor Murphy issued an executive order declaring an emergency because there was disruption in propane supply… On other hand this bill then penalizes same company for providing propane.”
Anthony Russo from Commerce & Industry Association questioned retroactive penalties: “These companies obtained permits… How can we say they polluted?… Now what we’re going do is we’re going do 30-year look-back… Makes no business sense at all…”
Eric Blomgren from NJ Gasoline Convenience Automotive Association said higher company assessments would lead directly to higher consumer prices.
Hilary Chebra from Chamber of Commerce Southern NJ noted economic risks remain despite some refinery exemptions.
The New Jersey Business & Industry Association (NJBIA), which represents employers across various sectors as the nation’s largest statewide employer association, has consistently advocated against measures seen as detrimental to business interests or economic growth within New Jersey.
