TRENTON, N.J. -- A proposed environmental settlement--the single largest with a corporate defendant in the state's history and the second largest nationwide--will require Exxon Mobil Corp. to pay New Jersey $225 million to resolve its liability for natural resource damages caused by MTBE (methyl tertiary-butyl ether) contamination from refinery operations in Bayonne and Linden, as well at nearly 900 gas stations.
Exxon used gasoline additive MTBE to comply with a 1990 federal law that required an increase in the oxygen content of gasoline sold at gas stations in the smoggiest parts of the country. States later banned MTBE because of contamination concerns.
The payout would be second only to the Exxon Valdez case's $900 million. It would also come on top of ExxonMobil's separate obligation to remediate the contaminated Bayonne and Linden refinery sites, as well as all of the other sites detailed in this settlement, at the company's sole expense.
In addition to the $225 million payout to the state of New Jersey, the proposed settlement:
- Preserves the state's natural resource damages claims against ExxonMobil with respect to the Arthur Kill, Newark Bay and any other surface water impacted by ExxonMobil's operations, contrary to certain published reports.
- Preserves significant natural resource damages claims against the company for 860 retail gas stations at which MTBE was discharged, while resolving limited claims at the Paulsboro facility and 15 other facilities, as well as all ExxonMobil gas stations where MTBE was not discharged and there is effectively little or no damage. The New Jersey Department of Environmental Protection (DEP) assessed the total value of those facilities and gas stations at approximately $5 million, making the value of any potential future recovery far outweighed by the cost to taxpayers to litigate these minor claims.
- Preserves claims against ExxonMobil for the Lail facility in Gloucester County, which requires further investigation of the impact of the company's operations on natural resources.
- Requires ExxonMobil to remediate Morses Creek at the Linden refinery site once its operations conclude. ExxonMobil is conducting a remedial alternatives analysis, or feasibility study, to identify all other action objectives, potential treatment, resource recovery and containment technologies in lieu of final remedy determination. The first phase of the company's Feasibility Study Workplan was submitted on Jan. 28. In the meantime, refinery operations have already undergone containment and remediation actions and the refinery is operating today in full compliance with all DEP standards and regulations, including all water discharge and air permits.
A 60-day comment period begins with the publishing of the proposed settlement in the New Jersey Register. After the comment period, the settlement must be approved by the Superior Court judge as being fair, reasonable and in the best interests of the state.
Once the 60-day public comment and response period has concluded, the parties expect to submit a finalized consent judgment to Superior Court Judge Michael J. Hogan. Judge Hogan presided over a 66-day trial in the ExxonMobil litigation in 2014. During the public comment period, interested parties, stakeholders, and members of the public may submit comments.
The state filed its lawsuit in 2004. In 2008, a Superior Court Judge ruled that ExxonMobil was liable for causing a public nuisance by polluting the waterways, wetlands and marshes on and near its former refinery sites in Bayonne and Linden. In ruling on part of a natural resource damages lawsuit filed on behalf of the DEP, the judge found that ExxonMobil had contaminated both sites through active disposal and accidental spilling of hazardous substances.
ExxonMobil has never acknowledged responsibility for any natural resource damages, and the proposed settlement extinguishes Exxon's right to appeal those liability determinations as well as Exxon's right to appeal any damages that may have been awarded by the Court.
Irving, Texas-based ExxonMobil, the largest publicly traded international oil and gas company, is the largest refiner and marketer of petroleum products.
Click here to view the full proposed settlement.
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