Sen. Elder Vogel (R-Beaver) Tuesday again introduced legislation-- Senate Bill 724-- creating a significantly flawed RFP process that requires PennVEST to buy nutrient credits from a rigged process that favors manure treatment technology that does not count toward Pennsylvania’s pollution reduction milestone. 

Similar legislation-- Senate Bill 994-- was introduced last session and was opposed by the Chesapeake Bay Foundation-PA, PA Farmers Union, PA Environmental Council, and PennFuture and the PA Municipal Authorities Association expressed concerns about the bill.

Last session’s bill was opposed because it--

-- Is Neither Cost-Effective nor Affordable:  The alternative system proposed in this bill preferentially favors expensive, capital-intensive nutrient reduction technologies that is not a technology recognized by the U.S. Environmental Protection Agency as counting toward Pennsylvania’s Chesapeake Bay cleanup milestones.

Currently, DEP and PennVEST already offer certified nutrient credits through a market-based online exchange and auction.

The most recent auction in June 2014, nitrogen credits were sold for $2.27 per credit. The technology promoted by the bill is not cost competitive unless the credits are sold at $8 to $10 per credit, its promoters have said.

A December 2012 report by the Legislative Budget and Finance Committee estimated the sustainable cost per credit for this technology at $11 per credit. And while the legislation doesn’t mandate the purchase of more expensive reductions, it threatens to manipulate the market to do so.

The choice is clear—$2.27 per pound of real certified, tradable nutrient credits or $11 per pound of future nutrient reduction?

-- Does Not Create Real, Marketable Credits: The bill does not require the “TMDL parameter credit” to meet the existing regulatory standards under 25 Pa. Code § 96.8 for a marketable nutrient credit and are inconsistent with USEPA nutrient trading guidance.

As a result, any reductions should be considered as imitation credits that have no real market value to the Commonwealth.

They cannot be sold to community sewage treatment plants or developers because the reductions cannot be used as "credits" or "offsets" in meeting nitrogen or phosphorus NPDES discharge limits. And, they cannot be sold by the state to help offset the cost of this program which has no funding source.

-- Leaves Unnecessary Risk with Farmers: Family farmers will see no benefits from this bill. Under current state regulations, farmers in Pennsylvania have to meet basic regulatory compliance measures.

In particular, farmers who till (plow) land and/or have an identifiable Animal Heavy Use Area disturbing more than 5,000 sq. ft., are obligated to have an erosion and sedimentation plan under Chapter 102 (Erosion & Sedimentation).

This bill promotes an approach that will not help farmers to come into compliance with existing Pennsylvania law. Importantly, farmers who ship manure to a large-scale treatment facility under this bill are not protected from shouldering the burden of transportation costs or tipping fees. And treatment facilities are not obligated to allocate any revenue with participating farmers.

With increased oversight by U.S. Environmental Protection Agency and DEP, farmers statewide and in particular within the Chesapeake Bay watershed need all the financial and technical assistance they can get to achieve and maintain compliance.

-- Leaves Unnecessary Risk with the Commonwealth: By not funding this program, the bill could use unidentified sources of taxpayer money to subsidize the technologies promoted in this bill.

Watch this bill closely, because it could be slipped in at the last minute as part of state budget deliberations in June without any hearings or even a vote by either the Senate or House as legislation was last year dealing with the regulation of conventional oil and gas wells.

More detailed reviews of the new legislation will no doubt be available soon.

The bill was referred to the Senate Environmental Resources and Energy Committee this session.

4/20/2015