We were pleased not only to see New Jersey’s controversial Climate Superfund Act stall in the waning days of the lame-duck legislative session, but also to hear many legislators from both sides of the aisle expose it for what it really is:
It’s an unfair, misguided and likely unconstitutional cash grab that would damage business, consumers and workers all at the same time. It’s also a slap in the face to an affordable and reliable energy source that New Jersey needs now more than ever.
You likely have heard how the Climate Superfund Act seeks retroactive $50 billion penalties of New Jersey petroleum companies for their relatively minimal role in global carbon emissions.
These fossil fuel companies have legally provided a resource that’s essential to our survival and prosperity — even our national security.
It’s an energy source that all of us, including supporters and sponsors of this bill, still very much need and use every day – particularly during these extended, below-freezing snaps we have been facing all winter. Further, petroleum is used in everyday products we use, wear and rely upon.
Despite all of this, advocates still seem intent on bringing back the act in this legislative session.
They also appear to have convinced themselves that socking energy companies with billions of dollars in unfounded assessments — not to mention the millions they’ll potentially spend to fight the unfairness in the courts — somehow won’t raise gasoline or energy prices in the state.
Let’s be very clear: Businesses don’t just swallow billions of dollars in unforeseen and unfair costs over which they have no control. Forcing them to do so would prove even riskier if companies know they potentially could face future retroactive penalties for delivering a state-permitted product.
Two NJ refineries
Of only four refineries that remain on the East Coast, two are in New Jersey. The bill’s most recent version supposedly exempted those. But that wording doesn’t assuage the downstream impacts on those refineries. In fact, Phillips 66 in Linden and the Paulsboro Refining Co. in Paulsboro are still very much exposed to damages from the bill.
Jointly, they contribute $8.4 billion to the national economy, pay $1.4 billion in state and local taxes and $4 billion in labor income and support 35,700 jobs in the state.
If you’re in the camp of “Big employers don’t really leave,” respectfully: You’re not paying attention.
There are also national supply imbalances and logistical constraints to consider that could add to our prices to the pump.
The East Coast consumes approximately 4.3 million barrels of transportation fuel daily but produces only 0.76 million barrels locally, according to the U.S. Energy Information Administration.
This results in a 3.5 million-barrel-per-day shortfall, which must be covered by transporting fuel from other regions or through imports. Without our refineries, that shortfall increases — and so does the price of fuel.
Follow law, get punished
If all that wasn’t enough, the bill – in any form – would have no impact on climate change. New Jersey contributes just 1.7% of the United States’ greenhouse gas emissions and only 0.3% of those worldwide.
Yet, it would still impose penalties based on worldwide emissions — despite the minor contributions coming from the Garden State.
Most critically, the Climate Superfund Act sends a disturbing message to New Jersey’s business community that no company is safe. It effectively tells every job creator: Follow every applicable law here, and you’re still doing business at your own legal risk.
For our businesses, consumers, workers and our collective common sense, the Climate Superfund Act should have no place in New Jersey.
