Bion's Owsego County Integrated
Beef Cattle & Renewable Energy

Project Overview

Bion Environmental Technologies, Inc. is proposing an integrated beef cattle and renewable energy project in Oswego County. The project is built on the foundation of a proven waste treatment technology that addresses both air and water impacts from livestock operations in order to ensure that it will successfully meet standards applied through a thorough environmental review.

However, the project will generate substantial direct and indirect economic benefits, including permanent skilled jobs, enhanced local economic activity and the creation of long-term markets for a number of agricultural inputs to be sourced from throughout the region.

There are and should be many questions regarding Bion's integrated agricultural project and we fully anticipate that there will be more as the project is further developed. These questions and comments reflect numerous and widely varied perspectives. All share a common desire to ensure that the project will have a positive rather than negative impact on the region. While commenters define potential "positive" and "negative" regional impacts on an individual and personal basis, all deserve to be addressed respectfully and as fully as possible. At the same time, it is clear that many of the questions that have and will be submitted are based upon an incomplete understanding of the capabilities of Bion's environmental management system, the Company's goals for the project and its role in project development and ongoing operations. We hope that the following discussion of technology capability and project development helps to provide a more realistic context within which to think about our project and its likely economic and environmental impacts on Oswego County.

Bion's Environmental Technology

Bion is a large-scale, integrated livestock project developer currently working on the development of several projects based upon large-scale beef or dairy livestock operations. At this time the Oswego County beef project represents Bion's only activity in the northeastern United States.

The core technology for these large-scale livestock projects is a comprehensive biological environmental management process that Bion has developed, patented and independently demonstrated. Since 2000, Bion has invested over $20 million of its own capital (not one penny of federal, state or local funds) to develop and document the environmental performance of that technology as well as to refine an integrated project business model based upon its demonstrated capabilities. The resulting integrated projects will be economically sustainable in large part because they are capable of achieving scale with environmental sustainability. In Bion's business model, these two components of success cannot be separated.

So what are the demonstrated environmental capabilities of Bion's environmental management system and what are their implications? To begin with, the term "comprehensive" is used in describing Bion's technology based upon its effectiveness in simultaneously addressing potential impacts from large-scale livestock herds to >b>both water releases and air emissions.

Water impacts: Bion's biological waste treatment system converts about 40% of the livestock wastestream nitrogen (N) to nitrogen gas (N2) which is harmlessly released to atmosphere (approximately 78% of our atmosphere is comprised of N2 gas ). Much of the remaining N is biologically converted to particulate form to support its subsequent removal from the effluent through use of both mechanical separation equipment and constructed wetlands. Much of the livestock wastestream phosphorus (P) is similarly converted to particulate form in support of its removal from the effluent along with the particulate N.

The quantity of N & P remaining in the final effluent is a very small fraction of that found in the effluent from traditional anaerobic lagoons treating similar waste streams. The process can be adjusted to provide nutrient loading as needed for fertilizing crops depending on the final use of the effluent. In the case of Bion's beef cattle facilities, if effluent after treatment is to be applied via irrigation to field crops under a comprehensive nutrient management plan approved by the NYSDEC, nutrients available from captured solids during the treatment process will actually need to be added back into irrigation waters to meet the nutrient requirements of the crops being grown. It is important to note that the vast majority of these captured nutrients will be in particulate form, highly resistant to leaching into groundwater or nearby surface water bodies when used as a fertilizer product.

Simultaneously, Bion's biological treatment system will decrease wastestream pathogens such as E. coli and Johne's in the range of one million fold or potentially more. This effective pathogen management virtually eliminates the kinds of health risks recently associated with field crops such as lettuce and spinach in California, where livestock effluent was directly applied through irrigation. When applied to crops grown for use in feeding the herd as Bion intends, pathogen reduction will serve to provide protection from health risks to the cattle consuming forage and grain from associated cropland.

Air impacts: In addition to eliminating the practice of spreading manure on fields for the purpose of its disposal, Bion's patented environmental management process also significantly reduces a wide array of air emissions and the resulting odors normally associated with the livestock operations along with environmentally harmful greenhouse gases. Atmospheric emissions from all waste management activities have been reported for typical facilities using anaerobic lagoons. The same whole farm waste management approach has been used in modeling the Bion system's emissions incorporating Bion's third-party reviewed data. When comparing the two, the emissions from a Bion environmental management system on a whole farm basis are significantly reduced. The table below shows the approximate range of reductions obtained by the Bion system:

In assessing the potential for nuisance odors emanating from project livestock facilities, a team of consultants from Clarkson University, led by Dr. Hopke, a world respected air emissions expert, provided a basis for comparison. Using emissions estimated in that assessment and modeling emissions from a well managed dairy facility using the same assessment tool, it is projected that the odor potential from a 14,000 head Bion beef cattle farm will have an equivalent nuisance odor potential no greater than that of a 400 head dairy without including odor from the dairy's spreading of manure.

As shown above, Bion's manure management process will reduce the methane emissions which normally emanate from livestock manure by 60% - 85%. Methane is a powerful greenhouse gas pollutant, 23 times more damaging than carbon dioxide. Bion recently commissioned a study by a greenhouse gas consultancy (econergy.com) that concluded that Bion can generate 7 tons or more of greenhouse gas credits per head per year using international protocols for an integrated project such as we have proposed in Oswego County. This type of benefit is a testament to Bion's comprehensive and sustainable approach to integrated agriculture.

Regulatory Considerations

The cattle facilities will be subject to the state CAFO regulations for nutrient discharge. Although those regulations do not traditionally include air emissions oversight, potential nuisance odor impacts from project livestock air emissions was independently reviewed by Dr. Hopke and his team at Clarkson University on behalf of St. Lawrence County officials. That community's independent study concluded that the Bion project could be implemented without significant odor impacts. Bion has voluntarily committed to performing supplementary detailed odor and air emissions assessments as specific sites are identified and to share the results of those reviews with the community.

That's fine, but since air emissions are not regulated, how can the community be assured that Bion will operate its facility at these odor levels once it has been approved?

The comprehensive nutrient management plan to be submitted to the NYSDEC will require Bion's environmental management technology achieve substantial reductions in the level of nutrients in the farm effluent based upon the requirements of an agricultural overland flow discharge permit. The state DEC will be responsible for ongoing enforcement of permitted nutrient reductions. As a consequence, Bion will be in violation of its own comprehensive nutrient management plan without achieving those substantial reductions on an ongoing basis.

Again, that's fine, but what does enforcing nutrient reductions have to do with voluntary compliance with non-regulated air emissions?

In a word, everything! Biological process engineers understand that Bion cannot achieve the required level of nutrient reduction without having a complementary impact on air emissions because the reduction in air emissions is a direct and unavoidable consequence of the biological processes that achieve nutrient reductions -- these are not independent processes.

So, as the state DEC monitors and enforces Bion's comprehensive nutrient management plan, odor levels as projected in the community's independent assessment will be an unavoidable and direct consequence of that process.

Renewable Energy and Ethanol Production

In addition to its environmental management capabilities, Bion's technology platform will also generate large quantities of renewable energy in the form of a cellulose-based, combustible solid fuel extracted from the livestock manure stream. A portion of the renewable energy produced will be used to offset the need for fossil fuels in the production of ethanol at the integrated facility.

There has been a great deal of public discussion regarding the net energy balance in the production of ethanol from corn. Studies using a "life cycle analysis" assessment now conclude that traditional ethanol produced from corn results in a net energy balance of about 1.40:1. In other words, growing corn, transporting it to a production facility and converting it to ethanol results in 40% more energy in the form of ethanol than has been expended in its production.

See the following links for examples of these studies:

• MIT Ethanol Analysis Confirms Benefits of Biofuels
• Biofuels: Energy Balance
• How Much Energy Does It Take to Make a Gallon of Ethanol?
• New Study Confronts Old Thinking On Ethanol's Net Energy Value

Analysis has also shown that the few studies that resulted in estimates of lower energy balance erred by either using outdated assumptions for the production of corn, from ignoring the energy implication of ethanol's co-product --distiller grains, or from using non-traditional boundaries in performing the life cycle analysis.

Bion's integrated project will result in an approximate doubling of the traditional net energy balance to 2.6:1 (resulting in energy content for ethanol produced that is about 2.6 times that of the "life cycle energy" used in its production). Integrating a nearby herd capable of consuming the produced distiller grains eliminates the need to dry or ship that product any great distance. Drying distiller grains at a traditional ethanol production facility accounts for close to one-third of the total thermal energy required in that process. In addition, as noted above, Bion's integrated technology platform will generate more than sufficient renewable energy from the livestock manure stream to eliminate the need for any fossil fuel to provide the remaining thermal needs of the production facility.

An equally critical consideration is the question that is almost never asked when looking at the net energy balance of ethanol: "What is the net energy balance of the gasoline that ethanol is replacing?" The answer based upon published "life cycle analyses" is 0.80:1. That is to say that every gallon of gasoline produced contains only 80% of the energy required to produce it. And that calculation does not likely take into account the transportation of finished gasoline from the refineries in Texas and Louisiana, nor does it begin to reflect the cost of dependence on Mideast oil fields, etc.

In comparison, Bion's ethanol net energy balance of 2.6:1 as compared with gasoline's net energy balance of 0.80:1 starts to look like a very good idea!

Bion's Role as Developer

Bion's responsibilities as project developer include:

1. Identify, evaluate and secure sites appropriate to integrated project components and compatible with nearby community land use,
2. Work with engineering firms to develop process flow and construction plans,
3. Secure permits and capital including economic development support for the project,
4. Secure operating partners for each aspect of the project who share Bion's vision for environmentally and economically sustainable integrated ag activities,
5. Hire a qualified builder to construct project elements, and
6. Establish an effective mechanism to ensure ongoing operation and maintenance of integrated project components.

As project developer, Bion is the principal owner / operator of the project with the primary job to develop a team of project operating partners who will ensure that the project is built, operated and maintained in accordance with applicable laws and regulations. Beyond this fundamental responsibility, it is central to Bion's core vision that all aspects of its project activities meet or exceed its commitments to the community. Failure to do so seriously undermines the value proposition that Bion's environmental approach to its integrated agricultural projects offers to our project partners, investors and community and would result in jeopardizing the successful development of other projects Bion is currently working on and any future projects Bion might consider. We are committed to bringing on board project partners who are equally focused on maintaining environmental excellence. Bion is dedicated to the proposition of "doing well by doing good!"