Additional Community Questions Posed Prior to the Bion SLC Project Website Launch

Questions / comments from the Board of Legislators' meeting on Monday, December 3, 2007:

1. Risk of groundwater contamination?

There are both technological and regulatory considerations that address the concern of ground water contamination.

Unlike almost all other CAFO's, including those currently operating in St. Lawrence County, Bion's process does not rely on an anaerobic lagoon to settle or volatilize the nutrients, which are among the most common reasons for groundwater contamination at CAFO's. Further, Bion's process requires manure containment (on concrete pads) with frequent collection to maximize capture efficiency and the effectiveness of our treatment system.

The prime focus of Bion's technology is twofold: 1) removal of the standard nutrient loss pathways that occur at most other CAFO's including ammonia volatilization, settled and dispersed N in/from the lagoons, and excessive phosphorus land applications; and 2) conversion and / or removal of the majority of the nutrients, leaving a fraction of them in the treated liquid produced. Almost all of the phosphorous (±95%) in the final stream and more than half of the nitrogen remaining will have been converted from the dissolved to a particulate form. The particulate, in contrast to the soluble, form for N & P means that there is a significantly lower risk for either runoff to surface waters or leaching to ground waters when applied to cropland. This benefit is in addition to the fact that most nutrients have been removed before such application occurs. The final stream applied to cropped land will also be carefully managed to balance these final remaining nutrients with the crop uptake and soil characteristics.

Taken together, the fact that nutrients applied to the land are a fraction in total of that produced, that the material is substantially in low pollution potential particulate forms and the cropped system will be carefully managed and monitored according to a NYDEC regulated CAFO - Comprehensive Nutrient Management Plan, the risk of groundwater contamination associated with Bion's installation is negligible even at a large scale, particularly when compared to current nutrient management practices at most existing CAFO's in the region.

2. Impacts to local aquifers from water use (over 1 million gpd for 84,000 head of cattle)?

[This question was previously addressed, but our comments are repeated here for the reader's convenience.] A study entitled "Farm Water Supply Requirements" updated in 2004 by Alberta Agriculture & Food indicates that beef cattle in sheltered housing on a high moisture diet (high forage) will consume 5 to 7 gallons per day (gpd) of water as they grow out from 500 lb to 900 lb. Bion's projections assume a more conservative requirement for 9 gallons per day (with an additional 3 gpd provided through a high moisture ration). On that basis, each 14,000 head facility will need to source 126,000 gpd of water. Sourcing will be determined on a site specific basis as candidate farm sites are identified and evaluated. The ongoing requirements of these facilities necessitate a site selection process that carefully screens for sites that can support long-term operations without adverse impacts.
At the same time, Bion's manure management process will treat and be able to return close to 6 gpd or 84,000 gallons per farm module to the local watershed. In this case, the total net withdrawal would be 42,000 gallons per day.

By way of comparison, a 2,500 head modern dairy operation using 30 to 50 gallons of water per head for lactating cows plus replacement heifers would require the same amount of water, approximately 126,000 gpd.

3. Evidently the scale is driven by the ethanol facility. Does it really have to be so large?

It is true that the scale of the project is basically driven by the ethanol facility. Industry assessments have established that the increased value of efficiency in scale between a 20 million gpy and a 40 M gpy ethanol facility is substantial: roughly equivalent to about 20-cents per bushel of corn. This is a huge differential and one that does not presently allow a smaller facility to maintain a competitive position in the marketplace. Based upon that size for the ethanol facility, the herd needs to be the proposed size in order to consume the distiller grains produced, thereby eliminating the need for dryers and product drying at the plant.

The issue of scale that seems to give most folks difficulty has to do with the beef cattle facilities, in large part because there is not a good understanding of the full effect of the technology to be implemented. Bion's challenge is to effectively communicate the impact of that technology based upon its proven capabilities. Bion's responsibility is to explain that the result of its implementation, along with careful execution of effective solutions, can and will reduce risks well below that of many existing activities already commonly accepted by the community.

For example, each 14,000 head beef cattle facility will have comparable environmental impacts to modern dairy operations as follows:

1. Water usage: a 2,500 head dairy
2. Potential for nuisance odors: a 400 head dairy (or smaller) that does not spread manure (Anecdotally, anyone who has spent time near a working dairy knows that it is during manure spreading when you get the preponderance of nuisance odors).
3. Ammonia emissions: a 200 to 300 head dairy
4. Release of nutrients to area waters: a dairy with fewer than 100 head
5. Traffic impacts: a 1,750 milker dairy with replacements

 

4. Why can't you use cellulose instead of corn to avoid the food / fuel concerns and improve the net energy balance?

There are two reasons we cannot do as you suggested. First and foremost, the cellulosic ethanol technology does not have a distiller grain by-product, as the corn ethanol facilities do. This by-product is a critical input variable for our integration with a beef cattle herd, as it is fed to the livestock in lieu of additional and more expensive corn rations. Secondly, even if that were not the case, to our knowledge the cellulosic ethanol technology is not yet commercial; it is still in a research and development mode. Your core point is valid in the sense that cellulosic ethanol has a bright future with regard to biofuel production; however, it does not fit our model at this point in time.

5. SLC should be promoting local projects supporting local farmers with local investors.

From Bion's perspective, this is a "local" project that will support "local farmers" and, as Bion is a public company, "local investors" can participate if they choose to.

6. We need more public forums.

As has been stated many times in our literature and in prior responses, Bion is committed to a transparent development process. This website is an example of that commitment. Bion has already participated in numerous hearings, many of which we initiated on our own. We anticipate many more public presentations and/or hearings in the future as this project moves forward. Some hearings will be initiated by an assortment of agencies as a part of our permitting process, and we will continue to initiate some meetings ourselves.

7. Why St. Lawrence County, as you will be shipping the corn and cattle from the Midwest and need to slaughter out of the region?

The availability of 75,000 acres of fallow cropland in St. Lawrence County (250,000 acres in a three county area) capable of supplying forage and other local agricultural inputs without disrupting existing markets is one reason for locating the project in St. Lawrence County. We have consistently described the advantage of access to the St. Lawrence Seaway as a logistics alternative to rail for securing necessary corn from the Midwest as another prime value of locating an integrated project in St. Lawrence County. We have also discussed additional substantive reasons including proximity to marketplace for locating our project in St. Lawrence County. In addition, we have also pointed out that New York State has established an attractive environment for the generation of renewable energy at agricultural operations through the mechanism of a renewable portfolio standard which creates a market as well as through NYSERDA and other state programs that support the activities of renewable energy generation. Many Midwest states predominately use coal as a feedstock for energy and simply do not have programs in place that support renewable energy.

When taken together, this set of attributes results in a unique business opportunity that we deeply believe achieves great alignment with the interests of the community. It makes sense because the community will also benefit based upon the project's reliance on the highest and best use of its agricultural and natural resources. Bion's opportunity is based upon the county's opportunity: underutilized farmland, the Saint Lawrence Seaway in addition to rail services, and proximity to large, high-value commodity markets.

8. Growing corn for this project will deplete the thin soils of SLC.

   Bion will not be dependent upon corn grown locally; however, it will provide a market alternative to local growers for their corn production if they choose to participate. Bion anticipates sourcing the vast majority of its corn requirements from the Midwest. Also, SLC and the region are blessed with a wide array of soils and soil types. Large areas of land with what the NRCS Soil Survey of St. Lawrence, New York designates as "prime farmland" is ideal for many agricultural applications and substantial portions of this prime farmland soil is termed "very deep" by the soil survey analysis. Thin soils do exist of course but are unlikely candidates for growing corn.

9. Have local towns supported this project?

Absent final site selection, it is premature for specific towns to take a position in support of this project. We can say however that Bion has received a great deal of interest from a number of towns that want to explore the opportunity of hosting parts of this project. We are taking that feedback into consideration in our site selection process. As we have stated earlier, we are currently looking at sites across St. Lawrence County from Ogdensburg to Massena. We will not be able to specify the location of potential sites until after the process has progressed further, but intend to share that information with the community at the earliest appropriate point in time.

10. What independent experts have vetted this technology?

Bion has had numerous independent experts evaluate our technology over the years, sometimes with a narrow focus (odor assessment), and sometimes as a system. Bion's DeVries installation is a good example of an independent expert evaluation. If you review the DeVries report and spreadsheet posted on our website (http://www.biontech.com), you will see that there was a long list of independent reviewers representing academia and regulatory agencies. Bion has also received favorable and detailed air quality reviews from the San Joaquin Valley (CA) Air Pollution Control District - this region is home of the nation's most intensive dairy operations. The Waterkeeper Alliance, an environmental organization, presented a favorable review of Bion's technology, making note of our multi-media treatment ability and availability of supporting data, in their 2005 report entitled "Understanding Alternative Technologies for Animal Waste Treatment". Furthermore, as you may be aware, Bion's technology was recently independently reviewed by three professors from Clarkson University in Potsdam with regard to the probability of nuisance odors from our proposed St Lawrence County development. You can find this report on our website at http://www.biontech.com/news/documents/StLawrenceCo Nuisance Odor Report-Hopke et al 10-31-07.pdf

11. We are told that concentrated cattle operations inevitably lead to very high emissions of ammonia.

Similar to the question regarding the likelihood of groundwater contamination discussed above, this statement is true for the majority of CAFO's. Note however that high levels of ammonia emissions are not inevitable, as Bion's process will reduce ammonia emissions by >95% on a per cow basis as compared to standard anaerobic lagoon CAFO's, like those operating today in St Lawrence County (refer to our discussion on this topic under the Project Overview tab of this website). Also, we suggest you consult the independently reviewed paper from our DeVries installation where ammonia emissions were monitored and emission reduction calculations were generated. [http://www.biontech.com/technology/]

12. How can local communities monitor health effects from the proposed project activities?

Monitoring changes in community health is a complex endeavor regardless of the agent causing the change. Assigning a causative relationship to a given activity is even more problematic. For this reason the governmental agencies responsible for protecting public health most often take a regulatory barrier preventative approach to assuring that projects of any type do not negatively impact public health rather than putting a system in place to monitor health impacts after the harm has already occurred. The hallmark of this system is the regulations and permitting processes with rigorous review and public oversight required for all such projects.

As a part of the development process, Bion will work with local and state agencies to obtain required permits. Environmental permits that are required for the livestock operations, such as the New York State Department of Environmental Conservation State Pollutant Discharge Elimination System (SPDES) permit, will require periodic monitoring for an assortment of effluent characteristics and locations. Similarly, each herd will be required to generate and comply with a Nutrient Management Plan (NMP), which is a subset of the SPDES permit process. Compliance with each NMP will require monitoring on a host of variables, including nutrient throughputs and mass balance accounting statements.

The environmental permits required for the development of an ethanol plant will be in much the same manner, a series of transparent permitting activities for an assortment of operations and environmental media (air, water). These and other permit compliance and monitoring requirements are designed to measure and prevent health and environmental impacts in the community. These permits will require public notice and comment period prior to issuance.

13. What impacts will this project have on endangered species within the county? Wetlands?

Bion's development will be required to comply with all local, state, and federal environmental regulations. Regulations designed to protect threatened and endangered species as well as wetlands have been around for years and have been designed to protect these resources. Bion will seek to avoid wetland and other sensitive habitat areas during the siting process.

14. Bion's project will compete with the local dairy industry.

Bion's project will create a long-term market for 25,000 to 30,000 acres of forage inputs that must be sourced locally. Rather than compete with producing cropland already supporting the existing county dairy industry, Bion anticipates that the largest portion of its forage needs will come from conversion of a portion of the 75,000 acres of fallow cropland that had been taken out of production because there were not markets for its crops. Establishing profitable economic opportunities for otherwise fallow cropland will probably result in an increase in its value.

While some may object to such a rise in land values, suggesting that "rising land values represent competition for the existing dairy industry". Would it be better to maintain the economic status quo? Are increasing land prices in St. Lawrence County a bad thing? If so, would a reduction in agricultural land prices be seen as a positive for the County and its numerous rural landowners? Since the dairy industry is one of the largest owners of farmland in the county, they will actually benefit disproportionately. Any increase in land values will result in increased equity and a stronger balance sheet for their business. Does the apparent benefit to area dairy farms from keeping land prices low somehow compensate for the economic burden that low land prices place on the backs of the County's farm families who own the 75,000 acres of fallow cropland?

In any case, Bion believes that the entire rural community of Saint Lawrence County and surrounding areas, including the dairy industry, will be the beneficiaries of a healthier and more vibrant agricultural economy. Agricultural prices have risen throughout the nation. These increases are driven by a number of factors including rising demand for commodities from agricultural energy markets such as ethanol and bio-diesel, as well as the depreciated dollar and related increases in international demand for U.S. commodities. These rising commodity values in turn create a rising value for agricultural land because farmers of all kinds (including dairy) are able to make money at these elevated prices. Dairy exports have risen from 3% of milk production (historically) to 12% of milk production (today).

The point is that nationally the agricultural community has experienced increased agricultural land prices while at the same time expanding their economies, creating jobs and increasing profits for themselves and their communities.

Some dairy farmers have contacted Bion regarding the possibility of terminating their dairy operations and using their facilities and crops to raise young stock for Bion's livestock project. The reasons are varied but obviously these dairies are seeking an alternative to their existing seven day a week work schedule that will enable them to continue to operate their farms while bettering themselves financially.

An argument against rising land value seems to be that maintaining the status quo in St. Lawrence County is preferable to creating an expanding economy that increases the wealth of the county's property owners while providing an opportunity for many more to directly participate by creating long-term markets for local agricultural crops.

15. We should not allow the slaughter of animals in SLC.

First, please note that Bion is not proposing a slaughterhouse as a part of this development.

Bion is developing a sustainable business in response to market demands, including the demand for fresh, wholesome, safe, high quality beef products. The vast majority of American society currently consumes meat and uses animal products and realizes that for this to occur animals must be raised for the purpose of being slaughtered and consumed, and, on the whole, appears to support these activities. Whether animals are, will continue to be or will be slaughtered in SLC, and in what numbers, is/will be determined by societal norms, market forces and existing laws and regulations.

If those rules/markets/societal norms do not align with an individual's personal beliefs and moral understanding, or a group's shared common philosophical or belief system , that is not a factor that can be genuinely addressed by Bion in this forum or by any commercial development seeking to address those larger markets. Rather, we would encourage those who strongly hold such views to engage in personal, political and cultural activities consistent with their views and values on these matters

16. Bion has a history of failed projects right here in New York State.

Bion's first generation systems in New York and elsewhere were not failed projects. They functioned properly for dairy and other livestock waste streams and in fact some are still working effectively today even though Bion is no longer directly involved with their maintenance. Bion's current platform has advanced to include the integrated agriculture aspects, so not only has Bion advanced its core technology but the overall business plan has advanced as well.

17. Bion is the "new kid on the block". The economic viability of their project is suspect on that basis.

In order for the Project to get the necessary financing, Bion will need to demonstrate "economic viability" to sophisticated third party lenders /investors/partners. If Bion is unable to secure sufficient capital through both sources of capital and debt, the project simply will not be built. Further, Bion should not be construed as the "new kid on the block" as it has been a public company since 1992 and its technology has long since been proven effective.

18. Is ethanol production really viable without subsidies?

As is true for any other business, Bion needs to compete within the realities of the marketplace. Is aluminum production at Alcoa viable absent subsidized hydro-electric power? Would the Saint Lawrence Seaway exist today without federal resources to subsidize its development?

The proposed integrated agricultural project in St. Lawrence County is not a debate over national ethanol policy---subsidies exist as they do for most agriculture and most energy industries in one form or another. For many reasons ethanol production is significantly more efficient in Bion's integrated model than for stand-alone production. At the same time, in Bion's integrated approach, ethanol production serves primarily as a feed source for the beef cattle. Its economic viability must be judged in terms of its contribution to the cash flow of the entire integrated project.

19. This integration has never been demonstrated.

Quite the contrary is true; this type of integration has been demonstrated. It is commonplace for cattle to eat distiller grains in lieu of additional corn. Bion has clearly demonstrated its ability to biologically sequester and mechanically collect nutrients. Solid fuel burners and boilers used to convert biomass to steam and/or electricity have been around for generations. Further, it is important to remember that to obtain financing, Bion will need to successfully pass the due diligence review of investors and their technical representatives as to the viability of this integration.

Also note that the first question addressed on this section of the website asked a similar question. Please refer to it as it provides website links to other current examples of livestock/ethanol integration projects.

20. Won't this activity drive up property values? Who bears the cost of that?

The total acreage required for placing Bion's integrated project facilities in St. Lawrence County is relatively small. There is no reason to expect that Bion's direct use of land will have any measurable impact on land values.

On the other hand, it is reasonable to anticipate that the return to productivity of 25,000 - 30,000 acres of fallow cropland may well have a small positive impact on cropland values. Area farmers who own cropland would see an increase in their equity value commensurate with any increase in their land values.

In the end, it would seem that the existing landowners in SLC would be the beneficiaries of any increase in land value. The cost would be borne by those who later choose to enter or seek to expand their holdings. They would be looking at real estate values in relation to overall community attributes. A strong, vibrant economy would obviously attract those seeking a community whose standard of living is increasing. Existing landowners seeking to expand their holdings would have the advantage of having already benefitted from any real estate appreciation on their existing holdings and would be expanding their holdings because the economic opportunity makes sense.

21. Bion is headquartered in NYC which is the antithesis of SLC.

Bion's project makes sense because it works specifically for St. Lawrence County, given its location, its infrastructure and its capacity for producing agricultural inputs, regardless of the physical location for the company's headquarters.

Questions from public comment at the SLC BOL Services Committee on Monday, November 19, 2007:

1. Where will the facility be located? Will any local residents or businesses be harmed by having this facility next door? Will the county's tourism industry suffer?

   Bion has not yet acquired or exercised options on land for the project component sites. We are currently looking at sites across St. Lawrence County from Ogdensburg to Massena. The process of site identification and assessment is ongoing and includes discussions with various rail and shipping companies that could serve the various locations. We will not be able to specify the location of potential sites until after the process has progressed further, but intend to share that information with the community at the earliest appropriate point in time.

   We understand that a great many questions and concerns are site specific and that we will need to be prepared to fully address them as we are able to identify specific candidate locations. It is our intent to place the ethanol facility on land zoned for industrial use and the livestock facilities on land zoned for agricultural use. Site layout, process design and construction of facilities will be performed to meet or exceed all regulatory requirements as well as traditional community standards for activities on land as zoned. In the end, a fundamental criteria for site selection requires that sites be sustainable long-term for the community as well as for project activities.

2. Where will a million gallons of water a day come from? How will it affect neighboring residents and communities? Will the county or the towns be asked to provide any infrastructure?

   A study entitled "Farm Water Supply Requirements" updated in 2004 by Alberta Agriculture & Food indicates that beef cattle in sheltered housing on a high moisture diet (high forage) will consume 5 to 7 gallons per day (gpd) of water as they grow out from 500 lb to 900 lb. Bion's projections assume a more conservative requirement for 9 gallons per day (with an additional 3 gpd provided through a high moisture ration). On that basis, each 14,000 head facility will need to source approximately 126,000 gpd of water. Sourcing will be determined on a site specific basis as candidate farm sites are identified and evaluated. The ongoing requirements of these facilities necessitate a site selection process that carefully screens for sites that can support long-term operations without adverse impacts.

   At the same time, Bion's manure management process will treat and be able to return close to 6 gpd or 84,000 gallons per farm module to the local watershed. In this case, the total net withdrawal would be around 42,000 gallons per day.

   By way of comparison, a 2,500 head modern dairy operation using 30 to 50 gallons of water per head for lactating cows plus replacement heifers would require the same amount of water, approximately 126,000 gpd.

3. How will moving 100,000 head of cattle, 14 million bushels of corn, and a couple of hundred thousand tons of feed a year impact the cost of maintaining town and county roads and bridges? How will the movement of that many trucks affect area residents and visitors?

   The use of public roads for various project activities needs to be well planned for both project construction and operations. These types of planned activities are typically coordinated with County transportation officials. The project is not yet sufficiently developed to determine the number of trucks using local and regional roads associated with project activities. However, the number of trucks will be greatly influenced by the location and configuration of the various parcels of land utilized by the project. It is our intent to minimize local road traffic by siting major project components along existing or newly built railroad spur lines where feasible. It will be possible to provide a meaningful projection once land options are in place.

   In the meantime, we can say that the ethanol facility will source the vast majority of its 14 million bushels per year of corn feedstock from the Midwest. Those inputs will not use trucks but rather will be delivered directly to the facility by rail, either from a local port, or directly from the Midwest. Local delivery of corn to the ethanol facility by truck will be limited to the level of production that local growers are willing and able to supply. While we do not believe that local corn production will constitute a large portion of the ethanol feedstock, we want to support local corn production to the extent that regional producers determine it makes sense to grow it.

   Beyond the ethanol, at this preliminary point the potential for trucking impacts to local roads from the beef cattle operations can best be understood in comparison with modern dairy farms as currently operated within the region. It turns out that a dairy operation will have more than seven times the impact to local traffic as a similarly sized beef cattle feedlot. Although this ratio initially seems surprising, further assessment reveals some of the reasons. A lactating dairy cow consumes 2 ½ times the feed per day as a 900 lb beef cow; taking into account feed for replacements, daily feed inputs are about 3 ½ times greater per milker than for beef cattle. In addition, the dairy cow is producing from 70 to 80 pounds of milk per day resulting in one tanker truck per day for every 450 − 500 milkers. For a 2,000 milker dairy, farm feed in and milk out will require about 21 trucks per day, but fewer than 3 trucks per day are needed for feed at a 2,000 head beef cattle facility; that's a ratio of greater than seven to one. Consideration for trucking of feeder stock in and finished cattle out at a beef cattle facility is more than offset by transport of culls out plus trucking for disposal of manure from a dairy.

   Without accounting for trucking of manure for disposal from a dairy, one of Bion's 14,000 head beef cattle facilities will have no greater impact on local traffic than a dairy with 1,500 − 2,000 milkers. Consideration of manure trucking will result in a ratio more favorable to Bion's beef cattle operation.

4. Bion's 84,000 cattle could potentially eat almost all of the hay, corn silage, corn grain and soybeans produced in St. Lawrence County. How will this affect the county's existing dairy farmers and livestock producers who will have to compete for that feed? Also, the nutrients in the feed that Bion purchases will not be returned to the land in the form of manure.

   Some have observed that Bion's 84,000 head of cattle essentially doubles the number of cattle already in St. Lawrence County. However, it is important to remember that dairy cows, which make up most of the existing herd, consume approximately 2 ½ times more feed per head than beef cattle. In other words, for the purpose of supplying feed inputs, Bion's increased cattle operations effectively increase the local herd by less than 50%.

   Certainly any increase in the herd would be a concern if the County did not enjoy abundant resources available for supporting an increased herd. But in reality, St. Lawrence County and the entire North Country is suffering from underutilization of its agricultural resources. Without markets for agricultural inputs, regional cropland has been going out of production over the past twenty year period or more. Even a properly planned and executed doubling or greater of the cattle population in the County should not be a concern. Bion's proposed herd increase will create a long-term market for forage from an estimated 25,000 − 30,000 acres. This increased demand will not come from acres already utilized to serve the existing dairy industry, but under long-term contract from among the 75,000 acres of fallow cropland that exists in the County. Perhaps the question should have been "will this increase in herd be sufficient to utilize the potential agricultural production from the approximately 250,000 acres of farmland that is currently lying fallow in St. Lawrence, Franklin and Jefferson Counties?"

   It is true that the nutrients in the cattle waste stream will not be returned to the land in the form of manure. That is actually a very good thing when compared to historical manure spreading and its environmental problems. Keep in mind that Bion's waste management process does not "destroy" nutrients. Rather nitrogen and phosphorus normally present in manure are biologically sequestered in particulate form and captured using traditional solids separation technologies. Nutrients in the "fine solids" as captured by the Bion process are still available for use as an organic fertilizer, although they are no longer "manure".One of the natural consequences of the biological treatment process and the entire Bion environmental management system is a decrease in pathogens such as E. coli and Johne's in the range of one million fold or potentially more. If Bion's fine solids are used to supply nutrients to cropland, this decrease in pathogen level, as well as the documented decrease in odor causing emissions, will provide a benefit to the environment

5. Will the farmers who supply that feed buy fertilizer decreasing their profits, or skip the fertilizer, leading to a long-term decrease in the fertility and viability of the county's farms?

Using fertilizer to supply nutrients on cropland turns out to be more economical than spreading of manure. The nature of manure requires costly equipment for hauling and spreading. It appears that use of manure on cropland provides more benefit for its removal from the dairy than for its use in producing a crop.

At the same time, as mentioned in the answer to the previous question, Bion's waste management process does not "destroy" nutrients, but rather converts much of them to a particulate, biological form that can be separated and captured using traditional solids separation technologies. Nutrients in the captured "fine solids" are still available for use as an organic fertilizer, although they are no longer "manure". One of the natural consequences of the biological treatment process is a decrease in pathogens such as E. coli and Johne's in the range of one million fold or potentially more. If Bion's fine solids are used to supply nutrients to cropland, this decrease in pathogen level, as well as the documented decrease in odor causing emissions, will provide a tremendous benefit to the environment.

All this being said, as is the case today, it is the individual farmer's responsibility to wisely mange their land and maintain the viability of the farms in SLC. This critical stewardship role can not be directed externally but can be guided and / or assisted with the resources available to the farmer such as Cooperative Extensions and the USDA Natural Resource Conservation Service (NRCS). The nutrient forms resulting from the Bion Environmental Management System may be readily used to preserve soil fertility while greatly decreasing the potential for negative environmental impacts from nutrients generated consistent with best management practices.

6. What assurances are there that Bion will comply with the odor assessment? What assurances are there that Bion will deal with other air and water quality issues?

   The ethanol plant must obtain the full spectrum of permits required and after a thorough public review process will be subject to the same regulations and oversight as any other manufacturing operation.

   The cattle facilities will be subject to the state CAFO regulations for nutrient discharge. It is true that those regulations do not specifically include air emissions from agricultural activities. However, the potential for nuisance odors from air emissions was independently assessed on behalf of St. Lawrence County officials by a team of scientists led by a world renowned air emissions expert from Clarkson University. Their report concluded that with appropriate setbacks and/or other mitigating activities, 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.

   But the question remains what assurance does the community have that this commitment will be met? The comprehensive nutrient management plan to be submitted to the NYSDEC will require that Bion's environmental management technology achieve substantial reductions in the level of nutrients in the treated farm effluent based upon the requirements of a state confined animal feeding operations (CAFO) permit. The state DEC will be responsible for ongoing enforcement of permitted nutrient management commitments. As a consequence, Bion will be in violation of its own comprehensive nutrient management plan if it does not achieve the required nutrient reductions on an ongoing basis.

   That's fine, but what does enforcing nutrient reductions have to do with voluntary compliance on non-regulated air emissions? In a word, everything! Biological process engineers who have studied Bion's process understand that it is not possible to 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.

   And so, given Bion's total environmental management system, as the state DEC monitors and enforces our comprehensive nutrient management plan, the unavoidable consequence will be achieving or surpassing odor levels as projected in the independently conducted odor assessment.

7. What happens to the waste from the slaughter facility?

   Although there has been a great deal of speculation regarding a slaughterhouse, the reality is that it is not in the present plans for the integrated project. There will not be sufficient volume to economically justify its inclusion at the project's proposed size. The current plan is to ship finished beef to existing slaughter facilities outside of the region.

   If at some point in the future, a knowledgeable beef industry participant becomes interested in establishing a slaughter facility in conjunction with the project's established beef cattle feed operations, that prospective partner will be responsible to fully address permitting and operating issues for the slaughterhouse. At that point, they will be required to individually meet all applicable permitting and compliance requirements.

   A slaughterhouse is an industrial activity regulated by numerous state and federal agencies for storm and waste water discharges, air emissions and for food safety. State Departments of Environmental Protection and Public Health would be involved in permit reviews and ongoing oversight. Other local, state and federal agencies would also have an opportunity to review and approve planning and operations.

8. What happens if Bion can't find the 136-168 million dollars of credit they are seeking, because, for instance, of problems in the credit market or the world economy?

   If Bion is unable to secure sufficient capital through both sources of capital and debt, the project simply will not be built.

9. If you adjust the financial example in Bion's business plan for the level of debt they propose, government incentives provide all of the net profit from the ethanol operation. The economies of integration will improve that, but what happens if government incentives go away?

   The ethanol operation is only one component of the integrated project − the project's overall financial success is not dependent on ethanol's profitability, particularly in the short term. For the long term, ethanol's place in U.S. energy policy was reaffirmed under the recently enacted Energy Bill with a dramatic increase in the Renewable Fuel Standard and commitments to develop adequate transportation and delivery infrastructure. Moreover, as the question recognizes, based upon our integrated approach Bion's ethanol production will enjoy a significant competitive advantage over a stand alone facility due to proximity to herd and renewable energy production for use in the process.

   Given Bion's position as a low-cost provider, the Company is confident that its business model adequately addresses the challenges currently faced by the ethanol industry.&Again, these concerns will be addressed by potential project investors during their due diligence process; financing will be secured based upon Bion's ability to effectively address these concerns.

10. Bion expects a 40% annual return on investment, meaning that they recover their investment in less than 3 years. After 3 years, they don't necessarily care what happens to the project. What happens if the tax credits disappear in 2012?

    As is the case with any large scale integrated project, Bion's pro forma includes a number of alternatives and assumptions which in the end predict a range of financial outcomes. The reality is that the true worth of the proposed integrated project lies in its ability to build value over time through ongoing cash flows. It will best serve every investor's interest (including Bion) to build and run a successful business operation over the long-term.

    Regarding the potential loss of tax credits: should that occur, it will of course have an impact across the board, negatively impacting everyone in the industry. The result will be a new playing field that requires competitive efficiencies to remain successful. Bion's integrated project offers just such inherent operational advantages.

11. According to their business plan, Bion could outsource cattle ownership, feedlot ownership, the slaughterhouse business, and even the ethanol facility. Are they really committed to this project?

    Bion is the developer of the integrated project, with a role similar to that of a mall developer. Bion's core business is to secure the sites, the financing, and the permitting for the project and to provide the environmental compliance technology and renewable energy production from the waste streams. Bion will hire a general contractor to build the facilities, and then lease them out to various project partners as industrial tenants. The lease will include waste treatment and utility services for the livestock and renewable energy for the ethanol plant.

    Bion anticipates that the ethanol plant and the cattle operators will have a formula based agreement regarding the sale of wet distiller's grains by the ethanol plant to the cattle operator and Bion will have an agreement governing the sale of the renewable energy generated by Bion to the ethanol plant. Bion may also elect to hold a financial ownership interest in one or all of these operations or it may elect to serve only as landlord while providing contractual services. As for a slaughterhouse facility, as answered above, none is planned at the present time.

    The strength of Bion's business model is that Bion provides the facilities, the comprehensive waste treatment system and renewable energy platform, and implements and manages the contractual pricing and supply relationships required to establish a truly integrated multi-component project. To work efficiently, each project partner needs a management team that is experienced within its appropriate business sector, working within a framework of operational and financial agreements that allow the project partners to share in the supplemental values of integration.

    All project participants, particularly Bion, will be committing their financial and managerial resources and that commitment can be measured.

    Lastly, without regard to ownership, all project activities will meet applicable regulatory requirements set by government agencies and other operational standards as set by Bion.

12. Bion's business plan states that they may reduce their capital requirements by entering into an arrangement in which government provides some of the capital.

    Bion is seeking assistance from both federal and state sources consistent with both the economic requirements of the project and the existing programs designed to meet those requirements. Every economic activity has different needs and each area of the country has distinct advantages and disadvantages that it provides to various economic activities. The dairy industry has well established milk supports, various USDA and NYSERDA programs, etc. that directly support its business. Alcoa is seeking to continue a subsidized electric rate which represents a significant operating benefit that will be used to offset freight and other operating costs associated with keeping its operations in Massena.

    Bion has infrastructure and other needs that must be addressed to support viability for its integrated economic activities. Each of the economic activities that comprise Bion's integrated project will be competing in the marketplace against large scale, well-established commodity entities from the Midwest. In essentially every case, these competitors --whether they are in the ethanol or the beef business-- operate with a number of distinct advantages:

    1. A fully developed public infrastructure to support the full array of operational inputs and outputs, including access to transportation, utilities, water, etc.;
    2. Access to and full use of public support in the form of subsidies, grants and loan guarantees available at the local, state and federal levels; and
    3. A history of trade relationships within their industry's marketplace.

    Bion is seeking similar support to enable these same long term economic benefits for SLC.

13. According to their financial example, a 10% rise in the price of corn wipes out their profit. And what happens if the price of corn really goes up?

    To begin with, we do not know what financial example you are referring to in your question or what analysis has been performed to generate the question. On that basis, this question cannot be addressed since it presents an incomplete scenario. In general for a question like this to be answered, there are many variables that need to be accounted for. What happened to the price of ethanol? What happened to the values for distillers' grains or energy? The price of corn has gone up and continues to go up based upon domestic demand and international demand based upon the weak dollar. Meanwhile, so has the value of ethanol. The ethanol industry's economics are more sensitive to the price of ethanol than the price of corn.

    However, what is clear is that as potential investors perform their due diligence, they review not just the projected cash flows, but also the attendant risks to them. Today, sophisticated investors are no longer interested in what is described as "plain vanilla ethanol" principally because of the high price of corn. However, investors continue to look favorably on corn-to-ethanol projects that incorporate a competitive advantage, especially given the recently passed federal energy legislation substantially raising the renewable fuel standard for ethanol from corn.

    Bion's integrated ethanol project offers just such an investment opportunity. Lower energy usage (elimination of the need to dry distiller grains), reduced forward pricing risk for energy (long-term pricing contract for renewable energy from the livestock operations), increased value for co-product (based upon long-term established pricing contracts) and reduced market risk for the co-product are among the reasons that Bion's ethanol facility will consistently experience superior cash flows as compared with traditional facilities in the Midwest competing for New York State's 400 million gallon per year ethanol marketplace. Investors are interested in Bion's integrated project based upon these quantifiable advantages.

14. Again according to the financial example, the viability of this project is highly dependent on the cost of diesel fuel. Is it still viable when the price of diesel goes up?

    The assumption is not correct. Diesel fuel pricing is not a meaningful factor in the projects economics. Similar to above, we do not know what financial example the questioner is referring to.

    Generally speaking however, as a part of the normal planning process, a project of this scope and magnitude will consider risks from all types of sources and angles, many of them interdependent. While diesel fuel costs would not be considered a first tier variable in the economics of this project, it is important to consider that the efficiencies built into our integrated project will reduce the need for fossil fuels throughout the process, thereby allowing us to out-compete less efficient operations when diesel costs do rise. Bion is maximizing the use of efficient barge transport on the Seaway, and railways for product distribution. Further, the integrated nature of our development allows for sizable energy efficiencies, for example optimizing herd size relative to the ethanol plant allows the wet distiller grain by-product to be used locally by the herd, absent the need for drying or long range transport (consider that a good amount of US distiller grains end up in China). The need for truck transport, a major user of diesel fuel, has been minimized throughout our design process. Further, the fact the Bion is bringing the cattle herds closer to the population centers of the east coast which also currently possess available slaughter capacity means much less truck transport of beef from the Midwest .

    One method with which to consider the energy efficiencies in our design process is to address the overall carbon footprint of our project. Bion is anticipating that our St Lawrence County development will be a significant net generator of greenhouse gas credits, a sure sign of advancement in energy use efficiency.

15. Bion expects that construction of the facility will cost $140 million and create 1700 jobs. How much of the $140 million in construction expenditures will benefit the county's economy? How many of those 1700 construction jobs will go to county residents?

    The total project cost including the ethanol plant is currently projected at $180-$200million.

    Bion's main website offers a link to an economic impact study conducted by Bridge associates in 2007. The job creation number you referenced above comes from this study, which was commissioned by the St Lawrence County Chamber of Commerce. As you will note, the estimates were presented in terms of local/regional benefits and were not isolated on a specific town or county basis. With that said, we don't have the ability to directly answer the specific question at this point in time. As the project advances and preparation for the construction phase moves into gear, we expect that more detailed information on this topic can be shared.

16. Bion expects to create 400 to 500 on-going jobs. What is the nature of those jobs and to what extent will they be filled by migrant workers?

    The vast majority of the jobs to be generated will require a workforce with learned skill sets including equipment and vehicle mechanics, equipment operators, electricians, plumbers, drivers, etc. We anticipate that the beef cattle facilities will account for approximately half of the approximately 200 direct jobs identified in the independent economic impact assessment. Those jobs will require such skills as equipment operation and maintenance, herd management and materials handling. These positions simply cannot be filled with the kind of unskilled labor that makes up a sizable portion of a dairy workforce. At the same time, we project that the ethanol facility will require 30 − 35 skilled employees, while maintenance and operation of the Bion technology platform will employ an additional 42 − 48 skilled workers. The remainder of the direct jobs will involve trucking, equipment operation and maintenance. In addition, the economic impact assessment determined that beyond the direct jobs, that project economic activities would generate an additional 250 - 300 support positions.

    We have begun discussions with local universities to provide training and educational programs consistent with the need for the variety of skilled positions created by the project activities.

    Bion is committed to providing compensation (both wages and benefits) competitive with regional norms for each job type and skill level. There is no question that a stable, satisfied employee base is essential to a successful business. We anticipate that the vast majority of workers for the project can and will be successfully sourced from the local and regional populations.