Will the private sector get a crack at reducing nutrient pollution in PA?

November 20, 2019 Bay Journal
PEC in the News

Pennsylvania, which is badly lagging in meeting its Chesapeake Bay cleanup goals, may become the first state to rely heavily on the private sector to help solve its pollution ills.

After 5 years of failed attempts, a bill is moving forward that would pay private companies, joint farmer ventures and potentially other organizations to reduce nutrient pollution in Bay drainage portions of the state. The bill passed the state Senate on June 26 and may soon come to a vote in the House of Representatives.

Backers are seeking $100 million over five years to support the Pennsylvania Clean Water Procurement Program. Under the bill, the state would run a competitive bidding process that would guarantee winning contractors a set price for each pound of nutrients kept out of streams and groundwater.

The idea is to encourage innovation and new technologies to spur nutrient reductions in the state. The approach opens the door for private companies that have touted their manure-reduction technologies. One, Bion Environmental Technologies, has heavily pushed the bill and promises to launch a “next generation” manure digester.

But critics fear steering public money to private enterprise would come at the expense of on-the-ground nutrient control measures, such as planting streamside buffers.

Previous versions of the bill were criticized for requiring local governments to pay into the fund and for their potential to send a considerable amount of restoration money to large private companies, rather than farmers.

The current bill does not require payments from local governments. And it uses a pay-for-performance model, in which companies or organizations receive payments only after the nutrient reductions are verified.

Amendments have been made to the bill to make sure the program involves owners of smaller farms, whether they opt to develop their own system or participate in a larger one. For example, 20% of winning bids must be set aside for small farmers.

That could take many forms. For example, county conservation districts or ag consulting groups could help farmers collectively commit to conservation practices on their farms.

Backers also hope this will encourage so-called “transition agriculture,” through which farmers would adopt farming methods with less environmental impact. For example, a dairy farm could feed its cows by allowing them to graze on grass, rather than rely on growing corn with fertilizers, thus reducing the application of nutrients. Or, milk could be produced organically without the use of synthetic fertilizers.

In all cases, farmers could collect money from the state for using more environmentally sound practices.

A leap forward or a small step?

The bill has drawn support from groups and legislators on both sides of the aisle. That includes the Chesapeake Bay Commission, which consists of legislators from Pennsylvania, Virginia, Maryland and the District of Columbia. Five of Pennsylvania’s seven representatives to the commission endorse it.

“The bill has changed significantly from early drafts,” said Ann Pesiri Swanson, the commission’s executive director. “At this point, it really is a program designed to look at the best, most cost-efficient ways to reduce nutrients.

Gov. Tom Wolf, who had previously opposed the bill, seems open to it with some changes.

The measure comes as the state and its legislators feel the heat for falling greatly short of the nutrient reductions required by the federal government under the Bay’s “pollution diet.” Pennsylvania’s continually lagging performance leaves it facing possible federal sanctions and even lawsuits from other Bay states and environmental groups.

No one claims the legislation will bail out Pennsylvania from a seemingly insurmountable nutrient-reduction goal. But many see it as a way to help close the gap. Pennsylvania’s most recent Bay cleanup plan says that it would need to spend an estimated $324 million more each year to meet its nutrient reduction goal by 2025.

If adopted, the bill would be a dramatic change of pace for the state, which until now has tried to tackle its massive nutrient problems the same way as other states in the Bay watershed: through wastewater treatment plant improvements and traditional conservation techniques, such as tree plantings, streamside buffers and other on-farm conservation practices.

But many questions remain.

Who pays?

Advocates hope to pass the bill with $20 million in startup money and find a dedicated source of funding next year for the additional $80 million that backers are seeking. But no one is sure where the money would come from in a state with several years of pinched budgets.

Pennsylvania legislators so far have shown little interest in putting up additional funding for the Bay cleanup, and it is unclear where they would find $100 million for the proposed program.

Critics fear the program would siphon away money that has long gone to help farmers put conservation practices in place on their farms — practices that also benefit wildlife habitat, reduce stormwater runoff and combat flooding.

The Chesapeake Bay Foundation takes a dim view of the bill for that reason. Spokesman B.J. Small said in a statement that “decades of research” show that the most cost-effective, successful practices for reducing pollution in the Bay and its rivers are those that reduce nutrients and also deliver benefits for wildlife habitat and reduce flooding.

“These include practices like forested stream buffers, cover crops on farmland, soil nutrient management techniques, conservation tillage, urban tree planting, rain gardens and others,” Small said.

The state Department of Environmental Protection, which would implement the program, supports cost-effective nutrient reductions but is “not in favor of legislation that steers funding to one or two companies at the expense of funding to the small farms that need it,” said spokeswoman Elizabeth Rementer.

There’s no assurance in the bill that funds would not be drawn from current conservation programs, but bill backers say that’s an unwarranted fear. “It has been made very clear that this should be new money and not repurposed money, so it won’t drain best-management practice funding,” said Marel King, the Chesapeake Bay Commission’s Pennsylvania director.

The Pennsylvania Farm Bureau said in a statement that while more funds are needed to help farmers with best management practices, it endorses the bill to “support the establishment of a competitive bidding process that encourages technology, innovation and cost reduction.”

Former DEP secretary David Hess is a vocal critic and worries that the bidding will lock in a higher cost for nutrient reduction compared with current conservation programs.

“Existing programs [for conservation practices] have proven very successful,” Hess said. “With Pennsylvania not putting [enough] resources into supporting best management practices, I think the last thing they want to do is design a system that would make taxpayers buy the most expensive form of reduction.”

Other environmental groups have not taken a clear position. “The bill is not as terrible as it once was but it’s still not the bill to save us all. We need more funding for best-management practices,” said Ezra Thrush of PennFuture.

The Pennsylvania Environmental Council, which had been highly critical of the legislation in previous years, said it would not be taking a position on the bill until all amendments are made…

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