CBF Opposes Unaffordable Nutrient Reduction Bill To Be Considered In Senate Committee

The Chesapeake Bay Foundation sent a letter Friday to Sen. Elder Vogel (R-Beaver) and Sen. Judith Schwank (D-Berks) of Chairs of the Senate Agriculture and Rural Affairs Committee Friday opposing Senate Bill 994 (Vogel-R-Beaver) which would establish a system to preferentially favor expensive, capital-intensive nutrient reduction technologies.

The bill was just introduced on June 5 and is scheduled to be considered by the Committee on June 11.

The following is the text of that letter--

The Senate Agriculture and Rural Affairs Committee is scheduled to meet on June 11 to consider Senate Bill 994 (Vogel-R-Beaver) establishing a system to preferentially favor expensive, capital-intensive nutrient reduction technologies.  On behalf of the Chesapeake Bay Foundation, we respectfully submit the following comments on Senator Vogel’s legislation before the Senate Agriculture and Rural Affairs Committee for your consideration.

CBF is the largest nonprofit organization dedicated to the protection and restoration of the Chesapeake Bay, its tributaries, and its resources.  With the support of over 200,000 members, our staff of scientists, attorneys, educators and policy experts work to ensure that policy, regulation and legislation are protective of the quality of the Chesapeake Bay and its watershed.

After decades of experience and investment in tangible and science-based efforts we are seeing real reductions in pollution as a result of the Chesapeake Bay cleanup efforts and many locally impaired streams.  Maintaining the momentum is essential if we are to achieve our clean water goals and bring the Bay and our streams back to health and economic vitality.

Unfortunately, we believe Senate Bill 994 will not advance cost-effective and affordable nutrient reductions in Pennsylvania streams or the Chesapeake Bay and will likely have limited benefit to but a select few.  In particular, this bill:

-- Is Neither Cost-Effective Nor Affordable.

Currently, DEP and PennVEST offer certified nutrient credits through a market-based online exchange and auction.  The most recent auction in March 2013, nitrogen credits were sold for $2.98 to $3.05 per credit.  The technology promoted by Senate Bill 994 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-- $3 per pound of real certified nutrient credits or $11 per pound of future nutrient reduction?

-- Does Not Create Real, Marketable Credits.

Senate Bill 994 does not require the “TMDL parameter credit” to meet the existing regulatory standards under 25 Pa Code Chapter 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 not funding source.

-- Eliminates Reviews  By The Public, General Assembly Or Commonwealth Attorneys.

Senate Bill 994 is unprecedented in that it completely eliminates the review of the initial regulations implementing the program by the public, the General Assembly and Commonwealth attorneys.  Specifically, it strips oversight of Sections 201, 202, 203, 204 and 205 of the act of July 31, 1968 (P.L. 769, No. 240), referred to as the Commonwealth Documents Law; the act of June 25, 1982 (P.L. 633, No. 181), known as the Regulatory Review Act; and Sections 204 (B) and 301(10) of the act of October 15, 1980 (P.L. 950, NO. 164), known as the Commonwealth Attorneys Act.

-- 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 USEPA 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, Senate Bill 994 could use any source of taxpayer money to subsidize the technologies promoted in this bill, potentially taking funding away from proven practices that work, chiefly on family farms.  Pennsylvania is particularly at risk by being forced to purchase so-called credits of pollution reductions under the promise they will occur years in the future.  This threatens to derail detailed and regulatory timelines and milestones which require real and incremental reductions in pollution to meet Bay requirements.  If these reductions do not occur, the Commonwealth is at risk for "backstops" that include, but is not limited to, stricter permit limits for sewage treatment plants, expansion of the number of farms and communities regulated by DEP and EPA, the denial of certain new construction permits, and the withholding of water quality-related funding from the federal government.    

Truly affordable Bay solutions are already being implemented to help farmers meet regulatory requirements and improve their bottom line.   Communities are investing in infrastructure improvement projects which drive revitalization, beautification, and meet a number of regulatory requirements for clean water, including local TMDLs and the Bay TMDL.  While technology has a role, long-term public investment in economically questionable private enterprises is not a benefit to the taxpayers of Pennsylvania.  New technology can currently enter into a nutrient trading marketplace which allows verified credits to be purchased on the open market.    

Given limited resources and thousands of Pennsylvania impaired streams, we believe that emphasis on established clean water programs and pollution reduction practices that provide a large number of additional benefits—like reduced flooding, drinking water protection and improvement, improved herd health, and community revitalization—must be the Commonwealth’s core focus.    

CBF urges members to oppose this legislation as it currently is written and, given the complexity of the issues, request a hearing on this matter before this legislation is voted upon in Committee.  

Sincerely,

H.L. Campbell III, Pennsylvania Executive Director
A copy of the letter is available online.

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