Legislative / Policy

The Issue

Pennsylvania state government has refused to adopt a competitive bidding program that would have enabled the use of technologies it had certified to address livestock waste runoff. These technologies can clean our own waterways and help the state meet the federal Environmental Protection Agency’s (EPA) Chesapeake Bay initiative mandate (“bay mandate”) at significantly reduced cost to the taxpayer.

Instead of using the technologies and becoming a national leader in cleaning livestock pollutants from the Bay, Pennsylvania has stood by as local treatment plants spent billions – five times the original cost estimates – on plant upgrades to try to meet the bay mandate. As a result, Pennsylvania isn’t any closer to solving its huge problem. In fact, Pennsylvania is facing significant federal fines and sanctions and potential lawsuits from neighboring states that could cost taxpayers billions of dollars more.

Frequently Asked Questions

Q: What is the federal Environmental Protection Agency’s (EPA) Chesapeake Bay initiative?

A: Livestock waste runoff into local waterways has polluted the Chesapeake Bay. EPA has mandated all states in the Chesapeake Bay watershed must reduce nutrient and sediment loss into the bay or face sanctions that could begin in 2017.

Q: In this case, what is a nutrient?

A: Pollution. The byproduct of animal waste, nutrient pollution is mainly nitrogen and phosphorus. Once in the water they cause excessive growth of algae and can choke clean water systems.

Q: What is Pennsylvania’s role in this?

A: Pennsylvania is a large livestock agriculture state. In fact, it’s responsible for half of all nutrients that end up in the Chesapeake Bay, but is substantially behind in its commitment to reduce them.

Q: What would happen if Pennsylvania doesn’t meet the EPA mandate?

A: None of the options are good. The federal government could substantially fine Pennsylvania or impose additional sanctions, and other states in the bay watershed could sue Pennsylvania for any related issues. Simply put, Pennsylvania taxpayers could face several billion dollars in added cleanup costs.

Q: How can we fix this problem?

A: Private-sector companies and livestock farmers have worked together to develop new technologies to treat livestock waste on the farm, before it ever reaches local waterways. Bion Environmental Technologies unveiled the first such technology in 2011, producing verified nutrient reductions in a new facility at Kreider Farms dairy. A similar project by EnergyWorks BioPower followed at Hillandale Farms in Adams County.

Q: How did Kreider Farms Dairy become involved?

A: Like a lot of Lancaster farmers, Ron Kreider believes in being a good environmental steward. To address this problem, he leased land to Bion for $1 to establish a facility that could help the state meet its bay mandate. Other farmers have also invested in the best interest of the environment.

Q: Were there any other benefits to the Kreider-Bion partnership?

A: Bion planned a second phase expansion that would’ve allowed Kreider to create a renewable energy and a re-usable water stream for farms. Imagine that: Farms could be completely self-reliant while virtually eliminating pathogens, reducing greenhouse gas emissions and impacts to local waterways.

Q: What is the current status of the facility?

A: Unfortunately, it’s been shuttered. It has been a huge opportunity missed, as both the EPA and DEP certified this technology’s performance.

Q: Why was it closed?

A: Pennsylvania state government refused to create a competitive bid process , just like they do for many other commodities, for verified nitrogen and phosphorus nutrient credits produced at facilities like Bion’s. The credits would have been sold to local treatment plants to help meet the federal mandate. It could’ve been a perfect public-private partnership: Government, private-sector companies and farms could have solved the problem by now.

Q: Does competitive bidding work?

A: Of course. In fact, it’s used throughout federal, state and local government to procure the lowest-cost goods and services.

Q: So, why is this case different?

A: DEP believes state government – not the private sector – should solve this immense environmental problem. But the farming community disagreed and they weren’t the only ones. A 2013 report by the nonpartisan state Legislative Budget and Finance Committee demonstrated the cost to comply with the Chesapeake Bay mandates could be reduced by as much as 80 percent through a competitive bidding program that would engage the private sector.

Q: What was the fallout?

A: Local treatment plants didn’t purchase credits to meet the bay mandate, and instead upgraded their facilities at significantly greater cost to ratepayers. Upgrades were estimated to cost $378 million, but have skyrocketed to approximately $2 billion, according to DEP. So, Pennsylvania ignored a technology it certified to help meet the bay mandate. Instead of being a national leader in cleaning up the Bay, Pennsylvania isn’t any closer to solving its huge problem. Further it is staring at billions of dollars in compliance costs, potential EPA fines and neighboring state lawsuits.

Q: What is the state’s plan?

A: It’s important to note that we believe state officials want to solve this problem, but it’s not clear what their plan is because the numbers don’t add up. The DEP believes it can meet the mandate by using less expensive credits from forested riparian buffers, which is a combination of trees, shrubs, grasses and forbs planted along a stream or river. Buffers are used to protect water quality, enhance aquatic and wildlife habitats and can provide income opportunities for landowners. But if they were truly less expensive, the state would have generated these credits by now to solve the mandate. That hasn’t happened. In fact, Pennsylvania has informed neighboring states it doesn’t expect to address this issue for at least a year. The state has also not made budgeting for bay mandate costs a priority in the proposed 2016-17 state budget. Further delays could cost Pennsylvania taxpayers billions of dollars.

Q: Can Kreider and Bion still help?

A: Yes, and other farms and companies have similar capabilities and can help right away.

Q: Bay mandate aside, are there local benefits to using the Kreider/Bion technology and the competitively-bid nutrient credits it produces?

A: Absolutely! Only 25 percent of the nitrogen lost to the environment makes it to the Bay. The rest stays in Pennsylvania, where it ends up in aquifers and fresh water streams and lakes. Systems like Kreider/Bion capture the nitrogen and enable the efficient reuse of nitrogen and nearly eliminate ammonia and manure odors we all sense when crossing Pennsylvania farmlands. These also happen to be key goals for the Growing Greener III (GGIII) program sought by state lawmakers. The state will look for funding sources for GGIII, but the technology already exists to address the bay mandate – and it essentially will provide GGIII environmental benefits at zero additional cost.

Q: Is there still time for the state to reverse course?

A: It isn’t too late for Pennsylvania, our local waterways and the Chesapeake Bay. Pennsylvania needs to realize that government can’t do this alone. Farmers are ready to partner on this issue and clean up one of Pennsylvania’s greatest environmental challenges and, in the process, save taxpayers billions.

 

Status of Legislative Activities

PA Senate Bill 799 (PA Legislature website)