New Jersey Legislative and Labor Leaders Warn Against Climate Superfund Bill

New Jersey’s climate superfund bill – which would impose a $50 billion retroactive tax on energy producers – has not moved since legislative leaders pulled it from the Senate agenda on June 30, after failing to secure the votes. Yet, labor representatives and lawmakers continue ringing the alarm against a bill that would put jobs at risk and increase energy prices.

Last week, the New Jersey Business & Industry Association hosted a panel on state environmental law at its Energy and Environmental Policy Conference, where Kate Gibbs, Deputy Director for ELEC 825, the labor-management cooperative of Operating Engineers Local 825, warned that the bill puts trades jobs at risk:

“…From a policy perspective, you know, we have in the operating engineers, but in many of the other trades, have members who are actively working in these facilities, doing construction, doing maintenance, and it’s job opportunities that put food on the table for a member, so there’s the immediate fear of losing those jobs if something like climate superfund legislation comes into play.” [emphasis added]

Gibbs also said the bill sends a warning to every industry in the state:

“…From a larger policy perspective, I think what is most concerning is that the way the law is written is that you can have followed every law and regulation and have no negligence and still have these huge financial penalties. And what kind of message does that send not just to the fossil fuel industry but every industry, right? That you can follow the laws and regs and have no negligence and still suffer this kind of financial penalty years down the line.” [emphasis added]

Assemblywoman Dawn Fantasia (R) made a similar case in an NJ.com op-ed, warning that the bill targets industries the state relies on:

“Remember, our state depends on the very industries being targeted by these policies. Asphalt, diesel, transportation, medical supplies and construction materials all rely on fossil fuels. Our economy doesn’t run on Trenton’s wishful thinking.”

“Before Democrats send fossil-fuel producers a $50 billion bill, Trenton might want to reckon with the damage its own policies caused. You can’t make New Jersey more affordable by declaring somebody else will pay $50 billion. And you sure can’t make legislation constitutional by calling it ‘climate justice.’”

Fantasia also questioned whether the bill is constitutional:

“The deeply unserious bill would slap $50 billion in obligations on qualifying fossil-fuel producers based on historical emissions, using strict liability without proof of negligence or wrongdoing. Companies that legally produced energy under government regulations would enormously pay decades later. No court would need to establish that a particular company negligently caused a particular flood here; Trenton would calculate its emissions and send the bill.”

Bottom Line: New Jersey’s superfund bill has not moved since June, yet the legal risks around it have grown. Federal courts have struck down New York’s $75 billion superfund law twice, and New York is appealing. The U.S. Supreme Court heard arguments in Suncor v. Boulder early last month on a closely related preemption question. Legislative leaders may be waiting for those outcomes before they post the bill. However, the impacts are clear: fewer jobs and higher energy prices.