Citizens' BION Forum

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(EDITOR¹S NOTE: The following is a response from Bion Environmental Technologies to the recent press release by the St. Lawrence County Farm Bureau Executive Committee opposing the company¹s efforts to establish an integrated 84,000-head cattle operation and ethanol plant in St. Lawrence County.)

The St. Lawrence County Farm Bureau recently issued a press release announcing its opposition to public support for the Bion Project while questioning and attacking its environmental and economic fundamentals. The Farm Bureau press release was signed by Jon Greenwood of Greenwood Dairy, who has since stated at a public meeting that the position was authorized by the organization¹s executive committee.

Mr. Greenwood is formerly a county legislator from Canton, is presently a board member of the county¹s Industrial Development Agency (IDA) and is recognized as a spokesman for the large dairy CAFO interests in St. Lawrence County.

The fact that Mr. Greenwood opposes public support for the Bion project comes as no surprise to Bion. Mr. Greenwood has consistently and repeatedly stated his opposition to this project from its inception. And therein lies the problem. Mr. Greenwood¹s stated reasons simply do not pass the proverbial ³sniff test!² Does anyone seriously believe that Mr. Greenwood and his colleagues are opposed to Bion¹s project because of his concern for transportation efficiencies, or that he is truly worried about the strength of Bion¹s cash flows because of high input prices? Those are among the concerns he raises even though they are just plain wrong, as discussed later!

So why has Mr. Greenwood chosen to oppose Bion¹s project? Simply put, there is a clear conflict of interest at work here. Mr. Greenwood has been expanding his dairy CAFO. Based upon standard dairy practices for waste management, an expanding operation needs additional land for disposal of its added manure. And the cheaper the better! And the best way to maintain land at under market value (the status quo) is to ensure that it remains under-utilized.

Mr. Greenwood understands full well that limited markets for agricultural inputs directly result in lower land values with some acres inevitably going out of production. Mr. Greenwood is using his position of influence for his own self interest at the expense of the broader farm and general community at large. This result may well serve to benefit a few large dairy players, but it is most certainly not in the best interests of area farmers.

Small Farms And Jobs

But Bion¹s project does hold opportunity for regional farmers in the form of long-term, stable markets for grass hay, potentially other agricultural input crops and feeder stock for the beef cattle facility (not to mention the substantial general economic benefits to the county from professional, skilled and semi-skilled jobs that will be created). In fact, Bion has been approached by a number of area producers who have expressed interest in the long-term production of hay or feeder stock for the project. An additional number of small dairy farmers have expressed interest in converting their operations in whole or in part to raising young stock based on the promise of a stable, local market. How can anyone honestly believe that locating a large user of their crops in St. Lawrence County will be a negative to North Country farmers? At a minimum, it will bring cropland back into production and create a stable customer willing to pay market price for inputs. Greater utilization of farmland and guaranteed markets will result in a more stable and profitable farm economy which would increase farmland values.

And beyond the county¹s agricultural community, an independent economic impact assessment has projected significant long-term economic benefit in the form of hundreds of professional, skilled and semi-skilled jobs, both direct and indirect, at a time when the County, including cities such as Massena and Ogdensburg, most needs the employment opportunities.

Not Mutually Exclusive

What is most regrettable about this conflict is that it is unnecessary. Bion¹s project and the successful operation of existing dairy CAFOs are not mutually exclusive activities. Bion¹s project (along with its expanded, long-term markets for agricultural inputs and feeder stock) and existing dairy operations will be able to co-exist and thrive based upon the under utilized agricultural resources of the North Country. It appears that it is Mr. Greenwood¹s intent to protect the advantage of the extra margin he receives (based on low land values and under market crop prices) that is really driving his opposition to Bion¹s project. Does Mr. Greenwood care that the average income in St. Lawrence County has actually declined as the Chamber of Commerce has recently pointed out? And that¹s before the full impact of the closing of the General Motors plant in Massena takes effect. Nor is this conflict necessary (as we discuss below) based upon competition for public support.

Bion is a member of the St. Lawrence County Farm Bureau. This could well be the first time in the history of Farm Bureau that it has opposed public support for an agricultural project by a Farm Bureau member. Bion¹s project is at its very core an agriculturally based biofuels project. It is paradoxical indeed that, at the same time that Mr. Greenwood and his executive committee oppose Bion¹s project, the very first link at the top of the home page of the website for our parent organization, New York Farm Bureau (NYFB), is to a conference on renewable energy which NYFB supports conducted by the Environmental Business Association. The title of the onference: ³Growing for Biofuels.² Ironically, growing for biofuels is precisely the opportunity that Bion offers to North Country farmers. Is Mr. Greenwood aware that his position is in conflict with that of his own parent organization at the state level? Does that opposition extend to NYSERDA grants for anaerobic digesters that the dairy industry has employed throughout the state? Does the county Farm Bureau oppose public support for all biofuels businesses such as Bion that do not presently reside within the county?

Public Funding

The county Farm Bureau stated that if any public support is available, it should be made available to ³existing local agricultural businesses whose owners live here and have a vested interest in St. Lawrence County.² The county IDA is a public benefit corporation created under New York State General Municipal Law, Title 2, Section 914. Its mission is to promote, encourage, attract and develop job opportunities and economically sound commerce and industry in St. Lawrence County. To accomplish its mission, the IDA constructs and owns industrial sites and buildings, administers loan packaging and industrial revenue bond financing for projects in the county and provides a variety of tax-reduction incentives. The IDA has been involved in a number of projects over the past 30 years.

Mr. Greenwood, as an IDA Board member, is routinely asked to review business proposals. He knows from direct experience that no sound business is launched or sustained purely on government / public subsidies. Bion investors have already spent more than $20 million of their own money developing the technology without any assistance, asked for or given. As the project comes together, Bion will assemble equity investment along with bank and other debt financing. Bion and its project partners will be investing in excess of $150 million, exclusive of public support, in the county if this project moves forward.

Mr. Greenwood understands quite well that public funding is traditionally used for ³gap² financing. It is typically targeted against the build out of necessary transportation, utility and energy infrastructure that allows St.
Lawrence County to successfully compete for economic development with other regions throughout the country where economic development successfully occurs.

Public support is only provided after proposals are vetted for their soundness, job creation and the reality of supplemental economic benefits to the regional economy. Bion fully intends to document its eligibility for economic development assistance going forward.

Mr. Greenwood referenced in part an available $20,000 grant which the IDA could acquire to support a study related to upgrades at the Ogdensburg Port. He knowingly misrepresented the nature of the matter in the press release.

The requested monies were to be used for engineering sketches of proposed upgrades at the Ogdensburg Bridge and Port Authority as required to handle high volume corn unloading.

The request was not to fund Bion in any way but to develop preliminary engineering documentation the port needs to fully evaluate the changes entailed in substantially upgrading its capabilities in support of both Bion and other future volume shippers of grain.

Unfortunately for the residents of St. Lawrence County, Mr. Greenwood has abused his position to protect his narrowly defined personal interests at the expense of possible benefit to the residents of St. Lawrence County ‹ old fashioned personal politics that, as it relates to this project, is far too common.

Infrastructure

Consistent with their intended purpose, Bion¹s request for public assistance will be primarily related to infrastructure requirements, such as upgrades at the Ogdensburg Port, development of renewable energy production facilities, the cost of advanced waste treatment technology implementation and constructed wetlands to protect the environment from the potential negative effects of livestock waste streams to air, soil and water.

Mr. Greenwood lumps this all together and frames the argument that outsiders are receiving some unfair advantage as it relates to agricultural subsidy. Residency as a qualification for public support is a classic ³red herring² created by Mr. Greenwood to maintain the status quo in St. Lawrence County. The implication that public support for Bion¹s project will preclude availability of funding for other qualified and worthy projects, particularly in agriculture, is simply not based in reality. If the dairy industry is really interested in moving forward with their expansion as outlined in Mr. Greenwood¹s statement, they simply need to identify programs for which their activities qualify and get on with applying.

Public Support

Bion is forced to wonder if Mr. Greenwood is opposed to public support for all businesses except those that presently reside in St. Lawrence County. Does this opposition to outsiders represent a long held belief, or is it, rather, a recent epiphany as he seeks to protect the dominating position currently occupied by large dairies (including his own) from the beneficial effects of the Bion project on the community at large? In either case, why does he sit on the IDA Board if he is opposed to their mission? Are the owners of Alcoa St. Lawrence County residents? Has Mr. Greenwood opposed public support to keep Alcoa in St. Lawrence County? The owners of Great Lakes Cheese are headquartered in Hiram, Ohio.

Has Mr. Greenwood opposed public support for their expansion?

Or perhaps, does he save his opposition for economic development that he believes might have a small negative impact on his cash flows despite its substantial benefit to the general community, and in the end has nothing really to do with insider vs. outsider?

Response To Concerns

Bion has responded to the questions from Mr. Greenwood and others on our web site as well as in the many public and private briefings that have been held regarding this project over the last 18 months, including the issues raised in the recent press release. Mr. Greenwood¹s statements of ³fact² are so inaccurate that one is tempted to wonder if he refuses to learn about the issues he raises or is attempting to run a disinformation campaign.

From our meetings and discussions with Mr. Greenwood, it is very clear that he understands the issues quite well--well enough even to develop false arguments in an attempt to sabotage the Bion project. In so doing, he is misrepresenting the realities of the science, the marketplace, Bion¹s project and even the implications of his own dairy practices. Responses to some of the concerns he raised follow:

• Regarding his concern for project transportation efficiencies, Bion is working with an international greenhouse gas consultancy to develop an approved protocol establishing carbon credits based on the overall trade-offs in producing and delivering finished consumer goods to markets in the northeast, in large part precisely due to improved transportation efficiencies.

• As for his concern for our input expenses, be assured that securing necessary financing requires that Bion convincingly pass due diligence assessments by investment firms far more sophisticated than that of Mr. Greenwood¹s self-serving review.

• At a time when numerous cattle feedlots have failed in the Midwest and over 200 of them are presently up for sale, perhaps Mr. Greenwood should determine why before he suggests that Bion should develop its cattle feeding operations somewhere else, or maybe he means anywhere else!

• In addition, we need to point out that no one with even a passing knowledge of renewable energy would suggest that you get ethanol from an anaerobic digester (AD). AD technology produces methane, not ethanol!

• His assumption that Bion¹s process somehow destroys nitrogen is simply not true --with the system as proposed for St. Lawrence County, there will be approximately the same amount of nitrogen per head available for use as fertilizer on farmland as with conventional practices. We will save a comparison of the environmental impacts from land application of nitrogen between the two processes for another time.

More Jobs?

The county Farm Bureau stated ³local expanding dairies will provide more jobs and growth opportunities for local business.² His solution to the economic ills of St. Lawrence County appears to be: do more of the same. He argues that a further expansion of the dairy industry by 9,000 head to support the Great Lakes Cheese Plant expansion will produce a comparable or superior economic impact in St. Lawrence County to Bion¹s proposed integrated beef cattle, renewable energy/biofuels project. This simply ignores the reality that as the larger dairy CAFOs have expanded dramatically in St. Lawrence County over the recent past, the average income in St. Lawrence County has decreased according to the Chamber of Commerce.nAnd that is before the full impact of the General Motors plant closing in Massena takes effect.

Mr. Greenwood¹s approach implies he believes that a continuation of the same thing over and over will produce a different result.

He states that a dairy will employ one person per 50 cows and therefore 9,000 additional dairy animals will add 180 direct jobs.

Bion projects that its activities will generate 188 direct jobs (and more than double that number of indirect jobs) and that those jobs will range in pay between $10 and $30 or more per hour and will include health benefits. And Bion has committed that there will be no undocumented workers hired for these jobs.

Let us be clear: at the heart of Mr. Greenwood¹s concerns is money and advantage to himself. To believe that adding 9,000 dairy cows to SLC as he proposes will provide a significant economic impact to the citizens of SLC just does not stand a simple test of reasonableness.

Alternative Market

No, this fight is about Bion creating an alternative market for crops and creating benefit across a broad spectrum of the regional agricultural community. Objectively, one would think that the opportunities created by Bion would be a good thing for St. Lawrence County ‹ unless of course one views the county through the prism of a large-scale dairy producer who doesn¹t see that as progress.

Mr. Greenwood views such progress as competition since he and his colleagues are presently the largest market for inputs and enjoy significant leverage over local farming.

Besides, any increase in farm income will increase the value of cropland and that is viewed negatively since future dairy expansion plans are based on acquiring cropland to get rid of their manure at values that are below market.

The proposed Bion project offers St. Lawrence County the opportunity to re-invigorate and re-invent its economy ‹ not just the agricultural community but the entire economy.

The project will position the county as a leader in clean tech biofuels and agriculture as an integrated economic activity.

These jobs will create a sizable economic stimulus to the local economy. And these jobs are non-transferrable, not subject to the threat of relocation to a cheaper third world labor environment.