Questions Posed By Tedra Cobb Regarding Bion’s Proposed Integrated Beef Cattle / Ethanol Project in St. Lawrence County

Bion is committed to a transparent project development process including open dialogue with the community as we develop plans for an integrated beef cattle / ethanol project in the North Country.  We understand that it is important to respond to stakeholder questions and concerns regarding the proposed project and we intend to do so.  The level of detail in our response at any point in time will of necessity be a reflection of the status of project development at that time.  That is to say, some of the questions that you have posed to us now require additional project definition in order to provide the full and proper response that they deserve.  We intend to continue to provide increasingly detailed information to the community as we are able over time.  Having said that, information offered in this memo is intended to provide as complete an answer to each question as possible at this point in time. 

Questions posed by Tedra Cobb, Vice Chair of St. Lawrence County Legislature In Green.
Answers provided by Bion In Black.

Manure

1. How will the manure be spread? – There will be no manure to spread.
2. Who will regulate it? – The New York State Department of Environmental Conservation (NYSDEC) regulates effluent discharges from a Confined Animal Feeding Operation (CAFO) via a CAFO State Pollutant Discharge Elimination System (SPEDES) permit based upon a certified nutrient management plan.
3. Who will test the soil and water? – To be outlined in the SPEDES permit issued to the CAFO by the NYSDEC
4. What will the reporting mechanism be and to whom and how often? – Subject to determination of the NYSDEC in review of the CAFO SPEDES permit application
5. Where will the manure be spread?  There will be no manure spread.
6. What will the set backs be from other homeowners and wells?  Specific set backs will ultimately be determined on a site by site basis.  Dr. Hopke and his team of scientists at Clarkson University are reviewing the relationship of set backs and odor modeling given the capability of the environmental technology to be implemented.
7. Who will spread the manure? Will it be an outside firm and who will regulate them?  There will not be manure to spread.

At the heart of Bion’s integrated beef cattle / ethanol project is a comprehensive environmental waste treatment technology that effectively manages both air and water emissions from livestock manure streams.  The treatment technology involves a series of treatment steps that include both biological and mechanical processes finished by polishing in vertical flow constructed and actively managed wetlands. 

As a result, unlike traditional livestock agriculture, there will be no manure for spreading on local farm fields.  The biological process converts the manure to a single cell protein mass that supports effective solids separation from the effluent stream via a mechanical process.  The vast majority of the nutrients of concern, nitrogen and phosphorus, end up in a value-added product which will be marketed off farm either as an organic fertilizer or potentially a feed supplement for appropriate species (i.e. aquaculture). 

The only material to be land applied at each farm will be the effluent from the polishing wetlands.  Nutrient loading from this effluent will be consistent with requirements normally reserved by regulatory agencies for a surface water discharge permit, significantly lower than the standard for CAFO’s.  Farm operations will spray irrigate this extremely low nutrient and very low odor effluent to cropland under a certified nutrient management plan developed by an NYSDEC approved farm planner.  The major difference in our case is that the determination of acres required for the spray irrigation process under the nutrient management plan (determined by a certified farm planner and reviewed and approved by the NYSDEC) will be driven by the hydraulic characteristics of the land rather than its nutrient capacity under cropping.  The net effect of this circumstance is that the nutrient content of the spray irrigation from Bion’s livestock operation will be significantly lower than that which would normally be approved under a more typical farm plan.

Cows

1. How will the company dispose of the dead animals?   The farm will be a closed-facility beef cattle feed operation not a dairy.  As such, the beef cattle will be raised for slaughter.  Long-term development plans project a future integrated beef slaughter / value added process facility associated with the beef cattle feed operations in St. Lawrence County.   Nevertheless, the beef cattle CAFO’s will each develop an approved carcass management plan consistent with all state and federal regulations developed and in place before operations commence.
2. Where will the company dispose of the dead animals?  Certified animal disposal services are usually used or with a project of this size, certification may be sought for disposal by the operation.  The technique to be used will be determined by a project design team of animal husbandry specialists. 
3. How will the company dispose of the older animals?  As a beef or meat production operation there will be no older animals.
4. How many will be slaughtered?  All.

Slaughterhouse

Currently young steers and other feeder stock are shipped from regional dairies to feed yards in the Midwest for raising and slaughter with commodity boxed beef being returned to New York markets. 

1. Who will run the slaughterhouse business?  It is presently anticipated that fed cattle will initially be shipped to slaughterhouses outside of NY.  It is projected that at some point an experienced project partner will be brought in to develop and operate the slaughter and further processing business. An experienced project partner will be brought in to develop and operate the slaughter and further processing business.  That partner will be responsible to fully address permitting and operating issues for the slaughterhouse.  That project partner has not yet be chosen, but it will be an experienced operator willing and able to maintain the highest standards of both food safety and environmental compliance.
2. Who will regulate them?  Although the slaughterhouse will be operationally integrated with the beef cattle CAFO’s, it will likely be owned and operated by a separate team specifically experienced in that industry.  As such, it will be required to individually meet all applicable permitting and compliance requirements.  A slaughter house 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 will be involved in permit reviews and ongoing oversight.  Other local, state and federal agencies will also have an opportunity to review and approve planning and operations.
3. How many trucks will be on the road each day and what roads will be used?  The use of public roads for various activities of a project is an aspect of the project that needs to be well planned for both the construction and operation phases.  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.  The number of trucks will be greatly influenced by the location and configuration of the various parcels of land utilized by the project.  Where feasible, major project components may be located along existing or newly built railroad spur lines greatly reducing road traffic.  Once land options are in place it will be possible to provide a meaningful projection. 
4. Who will be hired to work the operation?  Experienced management will be used consistent with each segment of the integrated project.  Manpower requirements for the project will be filled from within the local communities to the extent that it is possible.  We have already met with leaders of local universities to discuss coordination of training and educational programs to prepare local individuals to fill skilled positions created by new project economic activity.
5. What is their pay and benefits?  Bion firmly believes that a stable workforce comprised of satisfied employees is critical to long-term success of a complex economic project such as this.  Compensation including both wages and benefits is a primary contributor to job satisfaction and a resulting low turnover rate.  As such, it is Bion’s intent to target appropriate compensation by position and skill level so as to assure employee satisfaction.

Feedstock

1. What is coming in – silage, corn, hay?  Corn will primarily be sourced from the Midwest, although locally grown grain will be purchased as it becomes available.  Soybean meal will be sourced locally and supplemented as needed through regional and Midwest sources.   Local producers will be engaged via long-term contracts to provide the necessary silage and hay and other required inputs they choose to provide. 
2. How much is coming in?  Projection of ration requirements for the beef cattle will be provided in concert with beef cattle nutritionists in the near term.
3. When will shipments arrive?   Bion is currently negotiating terms of logistics contracts with a number of shipping and rail companies.  Corn delivered by rail from the Midwest will arrive throughout the year as needed.  Corn delivered via ship on the St. Lawrence Seaway will be delivered over the nine non-winter months each year with appropriate storage facilities in place to support ongoing operations through the winter.  Delivery of local agricultural inputs will take place throughout the year as local producers support project needs for storage.
1. Is it the same at all times of the year?  Small variations in beef cattle feed ration and consumption rates between the winter and summer will have a negligible impact on total integrated project input requirements.  The largest project input requirement will be corn for both ethanol production and beef cattle feed which will essentially not vary during the year.
2. What is the daily schedule of trucks?  It is much too early in project development to be able to provide a daily schedule of trucks. 
3. What roads will be used?  Specific roads to be used cannot be determined until land options are in place and will be heavily influenced by the ability to transport materials between farm facilities and the central ethanol production facility by rail where feasible.  These are questions that we will address as supported by future project development.

Water

1. How much water will be used by the operation?  Water consumption by beef cattle on feed is influenced by many factors including breed of cattle, stage of production, body weight, air temperature and relative humidity and moisture content of the feed components.  As an example, university research indicates that a 400 lb steer will consume 4 gallons on a 35°F day while a 1,000 lb steer will consume 14 gallons per day when it is over 80°F.  Rations for beef cattle in Bion’s integrated project will be high in wet distiller grains and silage.  As a result, the total water usage per head per day will be decreased to an average less than 10 gallons per head per day.  Virtually all of the water accounted for will be returned to the land in the form of crop irrigation under a comprehensive nutrient management plan as described above.
2. Where will the water come from?  Water sources will be influenced entirely by site selection as land is optioned.  This is a question that requires additional project development to address.
3. Will any water come from somewhere else?  Water will likely come from and be substantially returned to local sources.

Cows 

1. Where will the cows come into the operation?
1. Will they come in on a continuous basis?  Feeder stock will be sourced from numerous sources starting with steer heifers from New York State and northeast dairy operations.  Additional beef cattle will be brought in from the Midwest and southwest as necessary.
2. How will you replace the cows?  The beef cattle operations will look to establish long term relationships with regional dairy farms and other sources of feeder stock for steers.  Beef feeder animals will be sourced from numerous sources as dictated by quality, economics and availability.
3. How many trucks will be on the road each day?  To be determined.
4. What roads will they be using? Again, it will require additional project development to properly answer questions regarding truck traffic, routes and volume, associated with the beef cattle operations.  We understand that these questions do need to be addressed.
5. How many CAFOs will the company have?  The integrated project will contain six beef cattle feed operations (CAFO’s) located within St. Lawrence County and possibly western Franklin County, each with indoor slots for 14,000 head.  Each beef cattle feed facility will be constructed with its own environmental waste treatment capability and renewable energy technology.
6. Will there be a calf CAFO, cow CAFOs, a feedlot CAFO?  The CAFO’s will be beef cattle feeding operations utilizing confinement facilities to house the cattle on feed.  It is worth emphasizing that these animal production installations will not be feedlots.  There will be no animals housed in outdoor earthen pens with manure storage piles.  Such feedlot configurations are not remotely similar to the animal production housing units to be built for the anticipated project.

Workers

1. What will you pay the workers?
2. What will be benefit package include – insurance, pension?
3. Will there be paid overtime?
4. Where will the workers come from – local, United States, other?
5. What percent of the workers will be from Mexico, Central America or other non-English speaking countries?
6. What will the impact be on our schools and social services?
7. Will there be a minimum requirement of local workers?

Most 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.  Bion is committed to providing compensation (both wages and benefits) above regional averages for each job type and skill level.  As previously discussed, 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.  We have begun discussions with local universities to provide training and educational programs consistent with the need for a variety of skilled workers.

Other:

• Community Impact Study
• Impact on the environment – water, air quality
• Impact of county roads and infrastructure
• Impact on county services
• Impact on schools
• Impact on workforce

Bion in conjunction with the St. Lawrence County Chamber of Commerce has already conducted an independent economic impact assessment (Dr. Gregory Gardner, Assistant Professor, Business Administration, SUNY Potsdam).  Potential water impacts from the beef cattle operations will be directly addressed within the development of a comprehensive nutrient management plan, working with a state certified farm planner on specific parcels identified for use by the beef cattle operations.  Assessments of air quality, including odor modeling, are currently being performed for the County and the Towns of Massena and Brasher by Dr. Philip Hopke and a team of scientists at Clarkson University’s Center for Environmental Excellence.  

1. What part of the whole operation will be run by BION?  Bion will be responsible for bringing together a management team with expertise in the various economic activities being integrated, including ethanol and beef cattle feeding.  Once on board, the management team will be responsible for operations of activities appropriate to their experience.
2. Will BION use stock options to purchase the land options? How does that work? Has it been done in the past and to what outcome?  No.
3. Have options been offered in SLC?  Not yet.
4. Is the IDA working with BION and have they offered any incentives at this point?  The IDA is working with Bion.  We have not discussed specific incentives at this point.
5. Will there be local IDA incentives? What will they be?  To be discussed and determined.
6. Will there be State incentives? What will they be?  We anticipate qualifying for the New York State Empire Zone program among others.
7. Will there be Federal incentives? What will they be?  We anticipate both federal grants and loan guarantees to be available for the integrated project from programs providing incentives for environmental waste management and generation of renewable energy.
8. Where is the technology being used now?  Bion’s waste treatment technology has been employed at dairy and swine operations since the early 1990’s.  The latest generation of technology refinement was installed at the DeVries Dairy in Dublin, TX which became the site for an 18 month long, independently reviewed demonstration project.  The complete final report, including the approved protocols for sampling, testing and analyzing data, along with study conclusions are available on our website at:  DeVries Nutrient & Air Project Review

The entire data spreadsheet can also be accessed on our website:  http://www.biontech.com/.

1. How long has this technology been used?  See above.
2. Outcomes - before and after analysis See above.