- New Jersey 04/06/2015 by Heather Haddon (Wall Street Journal)

The controversy surrounding a settlement with Exxon Mobil Corporation over years of contamination in New Jersey is likely to continue as environmental groups and state Democrats consider intervening in the case.

Governor Chris Christie’s administration unveiled details Monday of the $225 million settlement with the Texas company over environmental damage to New Jersey waterways and other sites across the state. New Jersey officials called the potential payout “historic,” and said it preserves claims at former Exxon facilities for further investigation.

But environmental groups say the settlement is worse than they had feared, as it clears liabilities beyond the two Exxon sites originally in question. The agreement would end Exxon’s responsibility for any pollution at 16 other facilities across the state and hundreds of gas stations previously owned by the company that has yet to be discovered. Possible damage at these additional facilities hasn’t been fully studied, and absolving Exxon now is premature, environmental groups said.

“It raises a real question as to whether the taxpayers of New Jersey are getting a fair deal. And that’s what we are going to explore going forward,” said Mitch Bernard, director of litigation for the Natural Resources Defense Council, which is considering intervening in the case.

State officials estimate the cost of cleaning up the additional sites at $5 million, an amount they say doesn’t justify further litigation over them.

The state also says the settlement preserves significant claims for contamination by a particular pollutant that has been discovered at the gas-station sites, and contamination still being investigated at the Newark Bay, a Gloucester County facility and at creek surrounding the Linden refinery.

The 41-page settlement published Monday could end a decadelong suit brought by successive New Jersey administrations to clean up contamination in northeast stretches of the state.

The state filed suit in 2004, arguing that contamination at Exxon’s Bayway and Bayonne refineries spanned more than 1,500 acres of wetlands, meadows and waterways. Exxon’s corporate ancestor, Standard Oil, started the facilities in 1909.

Publication of the settlement starts a 60-day public comment period on the proposed agreement. Officials at the state Department of Environmental Protection say DEP will then likely approve it and it will to go to a state Superior Court judge for a final decision.

Gov. Christie’s administration has championed the agreement as the largest environmental payout in state history from one company accused of pollution. Exxon will spend a “substantial” amount cleaning up the old Bayway and Bayonne refineries, state officials said Monday.

“We have vigorously litigated this case for the good of the environment and for the people of New Jersey,” said DEP Commissioner Bob Martin.

A spokesman for Exxon declined to comment Monday. In post-trial briefs, the company argued that the state had failed to prove that there was environmental damage at the refinery sites, something Exxon has never acknowledged, the DEP noted today.

Environmental groups have faulted the settlement for being far smaller than the $9 billion New Jersey officials originally sought. State Democrats held a Statehouse hearing on the case, and lawmakers on Monday said that they will likely intervene in Superior Court.

“This is a serious matter of public trust as well as corporate responsibility,” said Senate President Steve Sweeney, the Legislature’s ranking Democrat, in a statement.

After news of the settlement drew national attention last month, Mr. Christie defended it and said it had been unfairly characterized in public accounts. Residents have twice asked Mr. Christie to justify the settlement at recent town-hall meetings in New Jersey.

The settlement could haunt Mr. Christie, whose record as governor will be highly scrutinized if, as many expect, he enters the race for the GOP’s 2016 presidential nomination. While few people understand the complex settlement, “it’s the kind of story that will become potent if it’s placed front and center,” said Julian Zelizer, a professor of history and public affairs at Princeton University.

Write to Heather Haddon at heather.haddon@wsj.com.

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