*This outline is intended for general information purposes and does not and is not intended to constitute legal

advice. Ice Miller LLP

Pitfalls (and Opportunities)

Environmental Law Issues in Agriculture Farm Energy Options

Key Environmental Topics for Agriculture

Air Water Regulatory Issues

o Pesticides o Climate Change/GHG/Carbon Reduction

Genetically Modified Food/Food Labeling

Pitfalls What the EPA Says is Hot

2011 2013 Enforcement Initiatives

o o o o o o

Keeping raw sewage and contaminated stormwater out of the nation's waters Preventing animal waste from contaminating surface and groundwaters Cutting toxic air pollution that affects communities' health Reducing widespread air pollution from the largest sources (especially the coal-fired utility, cement, glass and acid sectors) Reducing pollution from mineral processing operations Assuring energy extraction sector compliance with environmental laws

Animal Waste

Recent Examples (Mahard Egg Farm)

Enforcement
Mahard Egg Farm
o o o o
o o

TX corporation, TX and OK operations $1.9M civil penalty EPA claim company failed to comply with the Clean Water Act at its egg production facilities Largest concentrated animal feeding operation civil penalty
Example of Enforcement Priority from contaminating surface and ground waters of the U.S. Press release provides "The initiative continues EPA's focus on large and medium sized CAFOs that are discharging without or in violation of a permit.

* See www.justice.gov, May 18. 2011.

Recent Examples (Mahard Egg Farm Cont'd)

Allegations:
o o o

Operated one facility without a permit Discharged pollutants into area waterways Allegedly discharged pollutants or failed to comply with the terms of its permits in 6 other states TX Construction Storm Water General Permit Failure to ensure safe drinking water for its employees TX and OK alleged similar violations of state laws

o o o

Recent Examples ((Mahard Egg Farm Cont'd)

Remedies
o o

System-wide changes Mandate of performance of specific requirements

Proper lagoon closures Groundwater monitoring Construction/maintenance of buffer strips On-going land restoration and management measures (restrictions on land application of manure and on livestock grazing)

Recent Examples (Kraft Foods)

Kraft Foods, Indiana Settlement

o o o

Class action lawsuit, 124 families Alleged local Kraft-owned factory contaminated the air and water inside their homes Alleged chemical spills. Release of chemicals into the groundwater

Vinyl chloride, trichloroethylene, tetrachloroethylene

Remedies

Remediate former plant site and groundwater Install mitigation systems Pay $8.1 million

Recent Examples (Cont'd)

Genetically Modified Food

Which Fish is Which?

o

Genetically Modified Food created when a plant or organism receives genetic material from a different source (maybe a different species) to produce a desired trait i.e. critics labeling GMO salmon "Frankenfish"

93% of 2009 soybean crop was genetically engineered*

*States Lead Debate Over Modified Food Labeling, Lyndsey Layon

Recent Examples (Cont'd)

Absence of federal legislation leads to state regulation

o

Bills pending in both House and Senate (as of May 20, 2011) regarding genetically altered salmon (ban/require labeling) and require labeling of all genetically modified food

14 states debating whether to mandate labeling for modified foods sold within their borders
o o

4 States: California, Oregon, Vermont, Alaska lawmakers considering legislation pertaining to fish Other states, including New York: require all foods made from GMO to disclose that on the label

Recent Examples (Cont'd)

Alaska: existing labeling law which requires identification of genetically altered fish in the marketplace EU
o First labeling requirements in late 1990s o At least 15 countries have mandated it

Opportunities Farm Energy Options

Hot Topic Renewable Energy in Agriculture Harnessing and profiting from alternative energy sources

Alternative Energy Options

o o o o o o o

Bioenergy and biofuels Solar Wind Hydroenergy Geothermal Farm-related energy policies and programs On-farm energy efficiency

2009 On-Farm Energy Production Survey*

8,569 farms in US reported producing renewable energy on their operations in 2009 Average energy savings of $2,406 on utility bills Majority of farms located in western and northern parts of the United States Approx. 2000 in California, greater than 500 in Texas, Hawaii and Colorado

Wind Turbines

1,420 operations reporting 1,845 wind turbines owned and operated by ranchers in the US (survey excluded commercial turbines located on farms under wind rights lease agreements)
o 1,831 use small wind turbines (producing less than

100 kW)

Average generation was 6 kW Average installation cost $12,972 (for all states)

Wind Turbines (Cont'd)

o 14 operations used large wind turbines (generating

more than 100 kW)

Average generation was 1,035 kW Average Installation Cost $1.3 M to install

Solar Panels

7,968 farms 92% PV and 23% thermal 4,449 watts generating capacity $31,947 per farm average installation cost for all panel types On-farm energy production using solar power was reported in all 50 states (DE 4 farms, CA 1,906)

Methane Digesters

121 farms reported owning and operating 140 methane digesters 30.5 million cubic feet of methane produced on average $1.7 < average installation cost Wisconsin (25), New York (16), Pennsylvania (16), California (14)

*www.agcensus.usda.gov

Fair Oaks Farm Case Study

"If the cows aren't happy, nobody's happy."

30,000 cows, 10 dairy sites Methane Digester system powered by manure

o transferred as a gas to generators that power the farms o digester biosolids applied to the fields o liquid used for irrigation

Fair Oaks Farm Case Study (Cont'd)

Fair Oaks "Expectations of an Ideal Manure Treatment System"

o o o o o o o

Efficient Odor Control Efficient Control of Pollutants Improved Fly Control Ability to Control Pathogenic Bacteria Reduced Air Emissions methane, hydrogen sulfide, NOx, Ammonia Return on Capital through By-products fertilizer, heat, electricity, credits Ease of operation/low operating costs

What Can You Do?

Determine best alternative

o Access production, acreage, capital costs/return,

energy consumption, geography

o Example, Assessing Small Wind Electric Systems

wind availability tall structures allowed space requirements

What Can You Do? (Cont'd)

electricity needs assessment economics

Think of Manure Management/Greenhouse Gas Reporting issues Watch for incentives