THE CITY OF NEW YORK LAW DEPARTMENT 100 CHURCH STREET NEW YORK, NY 10007

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1 ZACHARY W. CARTER Corporation Counsel THE CITY OF NEW YORK LAW DEPARTMENT 100 CHURCH STREET NEW YORK, NY June 5, 2015 HALEY STEIN phone: (212) fax: (212) SUBMITTED ELECTRONICALLY Via Office of Record Access New Jersey Department of Environmental Protection Attn: Exxon Mobil Bayway Comments P.O. Box 420, Mail Code Q Trenton, NJ Re: Exxon Mobil Bayway Settlement To Whom It May Concern: The City of New York ( City ), through the New York City Law Department, submits the following comments on the proposed settlement in the matter of New Jersey Department of Environmental Protection v. Exxon Mobil Corporation, Docket No. L consolidated with Docket No. L ( Proposed Settlement ). The Proposed Settlement purports to resolve the ExxonMobil Corporation s ( Exxon ) liability for cleanup and removal costs, including natural resource damages, for contamination from the Exxon Bayway refinery site, in Linden, New Jersey, and the Exxon Bayonne refinery site, in Bayonne, New Jersey (collectively Exxon Facilities ). The City opposes the Proposed Settlement terms as inadequate to address injury to the waters, sediment, and natural resources of the New York-New Jersey Harbor that may have resulted from activities at the Exxon Facilities, or from the numerous other Exxon-related sites that are included within the Proposed Settlement. Accordingly, the City requests that the Proposed Settlement not be approved. The New York-New Jersey Harbor Estuary The City has a unique interest in this matter. The Bayway refinery is located on the Arthur Kill and Newark Bay, and the Bayonne refinery borders the Kill van Kull and New York Harbor. These waterbodies border New York City as well as New Jersey and contamination from these facilities impacts the entire New York-New Jersey Harbor estuary, including New York City

2 waters. 1 This estuary represents a rich and diverse waterway that is home to many resident and migratory species and acts as an important nursery for fish and wildlife. These waterways have historically supported important ecological habitats and natural resources, including intertidal salt marshes and tidal creeks, freshwater meadows and wetlands, and upland meadows and forests. 2 These marshes and wetlands are essential to buffer the coast from ongoing sea-level rise and to minimize impacts from other high-impact weather events, such as Hurricane Sandy. Furthermore, the estuary s natural resources generally benefit the City s quality of life and economy. However, it is well documented that these waterways, including Newark Bay, Arthur Kill, Kill van Kill, and Upper New York Bay, continue to be exposed to contamination from the Exxon Facilities through migration, surface water runoff over contaminated land, groundwater transport and discharge to surface water, and resuspension of contaminated sediments. 3 The City has invested significant resources into improving New York Harbor s water quality and health. The City is currently in the midst of an unprecedented period of investment to improve water quality in New York Harbor; more than $6 billion of projects have been completed since 2002 or are currently underway, including wet weather expansion at City wastewater treatment plants, aggressive nutrient removal, billions of gallons of combined sewer overflow capture, and marshland restoration in Jamaica Bay. These projects, which have been almost entirely funded by New York City residents, have been extremely successful in improving the water quality of New York Harbor. The City has also invested significant resources in restoring natural resources along the Arthur Kill and the Kill van Kull, two waterbodies particularly infamous for their long history of pollution and spill impacts, as well as elsewhere around New York-New Jersey Harbor. Over the past few years, the City, along with its state and federal partners, has invested over $14 million, as well as significant City resources and time, along the Arthur Kill and Kill van Kull towards improving natural resources in salt marsh enhancement and restoration, freshwater and forested wetland creation, landfill remediation and restoration, and shorebird nesting enhancements. The Proposed Settlement offers a rare opportunity to further improve the health of the Harbor and its waterways and to hold Exxon accountable for extensive natural resource damages caused by its Facilities. However, as explained more fully below, the Proposed Settlement does not adequately compensate for natural resource damages caused by the Exxon Facilities, does not ensure that those damages will be remediated, and does not address and in fact indefinitely defers addressing damages to the Harbor and its resources. Comments on Proposed Settlement Under the Proposed Settlement, Exxon will pay New Jersey $225 million for natural resource damages from the Exxon Facilities. The Proposed Settlement also includes 16 other Exxon sites and all Exxon retail gas stations in the state none of which were part of the original litigation. 1 See Natural Resource Damages at the ExxonMobil Bayway and Bayonne Sites, Prepared by Stratus Consulting (November 3, 2006) ( NRD Report ), at 2-17, available at 2 NRD Report, at NRD Report, at

3 As a general matter, the final settlement amount of $225 million appears wholly inadequate to address natural resource damages caused by these Facilities and sites. 4 Damages were originally sought for up to $8.9 billion, an amount supported by expert reports and testimony presented during a 56-day trial detailing the costs needed for restoration, off-site mitigation, and compensation for lost public resources resulting from the Exxon Facilities. 5 The Proposed Settlement s amount of $225 million comes to just 3% of the damages supported at trial. The Proposed Settlement also inexplicably includes 16 additional Exxon sites as well as an estimated 800 Exxon retail gas stations in New Jersey that could have contaminated groundwater sites that were never mentioned in the trial nor were part of the original litigation. The record lacks any information regarding these sites and stations, such as the extent of contamination, the damage to natural resources, or the cost of natural resource restoration. The Parties have failed to explain, in light of the extensive record supporting $8.9 billion in damages for just the Exxon Facilities, how the final settlement amount of $225 million sufficiently compensates for the decades of natural resource damage caused by the Exxon Facilities in addition to the additional Exxon sites and stations now included in the Proposed Settlement. The City also objects to the settlement provisions that appear to permanently defer the remediation and restoration of tributaries and waterways of the New York-New Jersey Harbor estuary. While the Parties agreed to bifurcate these claims from the original litigation in 2006, that agreement did not impose the onerous prerequisites for reasserting those claims now found in the Proposed Settlement. 6 Furthermore, the Proposed Settlement lacks an explanation or basis for including any of these unusual and unnecessary requirements. First, the Proposed Settlement dismisses without prejudice all natural resource damage claims for the Arthur Kill, Newark Bay, Kill van Kull and Rahway River ( surface water claims ), and encumbers New Jersey s ability to reassert those clams, making it unlikely that they will ever be litigated or that Exxon will ever be required to pay for the damages caused to these waterbodies by Exxon Facilities. The Proposed Settlement requires that a formal natural resource damages assessment be conducted by applicable trustees under Federal and State law before surface water claims are reasserted. However, such an assessment, which could require millions of dollars and take many years, is usually conducted after a claim is filed, not before. Furthermore, the Proposed Settlement is unclear whether federal trustees must join in conducting the assessment, or whether New Jersey can act on its own authority, as allowed for under current law and regulation. Furthermore, the Proposed Settlement requires that prior to litigation, the trustees make a determination as to Exxon s liability, and that such a determination be made following an unspecified procedure that allows for Exxon s participation. These requirements are above and beyond current legal requirements, and provide Exxon additional rights not available under current law, which merely allows potentially responsible parties an opportunity to comment on the assessment plan. 7 The Proposed Settlement also imposes unique and burdensome requirements on reasserting surface water claims by requiring these claims be brought in a multidefendant action which names other responsible parties in addition to Exxon. This means that New Jersey must dedicate time and resources to identifying other potentially 4 NRD Report, at 1-1 and NRD Report, at 4-1 through 4-16; N.J. Dep t of Envtl. Prot. v. Exxon Mobil Corp., Docket No. L consolidated with Docket No. L , Plaintiffs Post-Trial Brief, at (November 25, 2014). 6 See Proposed Settlement, Attachment B C.F.R

4 responsible parties ( PRP ), even though Exxon has seemingly already been identified as the primary source of contamination and damage. PRP identification is an extremely resource intensive and burdensome process that could derail any future litigation on the part of New Jersey. Finally, the Proposed Settlement requires that any future surface water litigation not be limited to the Exxon Facilities, thereby precluding New Jersey from reasserting the surface water claims at issue here, and requiring substantially new litigation. In sum, the additional requirements that the Proposed Settlement imposes on New Jersey to reassert its surface water claims virtually guarantee that Exxon will never be required to pay for natural resource damages from the Exxon Facilities to the Arthur Kill, Newark Bay, Kill Van Kull and Rahway River and substantially diminishes the likelihood that those damages will be addressed. Lastly, Paragraph 13 of the Proposed Settlement defers remediation of Morses Creek, a tributary that feeds into the Arthur Kill, until refining operations located at the Creek cease operation. New Jersey has described Morses Creek as, in essence, a collection basin for spilled petroleum, with over 52 detected contaminants, and 100% of sample sites exceeding contaminant threshold values. 8 Under the Proposed Settlement, Morses Creek would continue to serve as a discharge point for refinery operations and its remediation would not begin until some future time, if at all allowing the Creek to continue contaminating the Harbor estuary indefinitely. Left unabated, contamination from Morses Creek will be allowed to continue flowing into the Arthur Kill and Harbor waters. No explanation was provided as to why remediation was deferred or why the Creek could not be remediated while refinery operations continued. For these reasons, the City objects to the indefinite deferral of remediation of Morses Creek. Conclusion The City believes that the Proposed Settlement, as drafted, does not adequately compensate for the extensive and well documented natural resource damage caused by the Exxon Facilities and does not ensure that those damages will be addressed. By providing just 3% of the overall amount that New Jersey s own experts found necessary to repair these damages, while dramatically expanding the number of sites subject to the settlement terms; imposing onerous conditions on New Jersey s ability to reassert dismissed surface water claims; and indefinitely deferring remediation of the heavily contaminated Morses Creek, the Proposed Settlement does not provide for a fair, reasonable, or adequate resolution of New Jersey s claims and appears inconsistent with the purposes of the federal and state statutes under which these claims were asserted. For these reasons, the City objects and requests that the New Jersey Department of Environmental Protection and the Court not approve the Proposed Settlement. We appreciate the opportunity to comment on the Proposed Agreement and we are available for further explanation or discussion of these issues. Thank you in advance. 8 NRD Report, at 3-1 and

5 Sincerely, /S/ Haley Stein Senior Counsel Environmental Law Division New York City Law Department 5