Vista Bid Falls Apart: AgStar Taking Both Veblen Dairies

It looks as if AgStar Financial Services will wrest both of Veblen, South Dakota's bankrupt mega-dairies away from serial polluter Richard Millner and his fellow investors. Vista Family Dairies, a front group formed by Richard Millner and other Veblen West dairy partners to keep the dairies in their hands, has declared it will not follow through on the $21.3 million bid it made in September to buy Veblen East.

Veblen East Dairy

According to a motion filed yesterday (U.S. Bankruptcy Court of South Dakota, Case 10-10146, Document 259) by Chapter 11 bankruptcy trustee Lee Ann Pierce, Whetstone Valley Dairy withdrew its backup bid on October 28. That means the the only bidder left at the table is AgStar's Veblen East Dairy Acquisition LLC, which submitted a credit bid for the minimum $16 million for the facility and $800 per cow.

Pierce's motion gives creditors until December 30 to file objections to the sale to AgStar.

Pierce's motion notes that Vista Family Dairy's attempted acquisition was not hampered by regulators. Marshall County granted Vista its conditional use permit on October 19, and the state Department of Environment and Natural Resources granted the manure permit on December 3. The latter is particularly interesting, given that DENR had said on November 10 that it would grant no permit to Vista as long as Richard Millner had anything to do with permit-compliance decisions.

Taking DENR at its word, I assume that Vista Family Dairy had to tell Millner he was out of the power structure. And as I let my speculation run riot, I can imagine that, without Millner the dealmaker able to keep his hands in the pot, whatever investors he'd cobbled together to float Vista's bid fell apart.

Veblen West Dairy

Millner and his gang already lost Veblen West to AgStar after failing to raise enough money for a viable bid on Veblen West last month. Now AgStar appears on its way to closing on both mega-dairies.

If the DENR, the South Dakota economic development honchos, and area farmers are paying attention, we can hope AgStar's acquisitions will mean Rick Millner is done dirtying the South Dakota dairy industry for good.

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Bonus Evidence: In upholding its denial of a permit for the Dairy Dozen's Excel Dairy in Thief River Falls, Minnesota, the Minnesota Pollution Control Agency reiterates Millner's lengthy record of environmental violations at every dairy he's run. For the record, here's what MPCA says about Millner's Veblen dairies:

102. Veblen East Dairy is an 8,176 head dairy facility that consists of six total confinement barns and eight manure storage basins. Veblen West Dairy, previously known as MCC Dairy, is a 5,500 head dairy facility that consists of five total confinement barns and five manure storage basins. Rick Millner is the managing partner for the entity that owns both facilities. On October 23, 2009, the South Dakota Department of Environment and Natural Resources (South Dakota DENR) issued a Notice of Violation, Order, and Settlement Agreement.

103. On July 10, 2008, the South Dakota DENR inspected both Veblen East and Veblen West Dairies. During the inspection, it was noted that the basins at Veblen West were at their maximum operating level, and the basins at Veblen East were below the maximum operating level. On July 18, 2008, the South Dakota DENR approved the transfer of ten million gallons of manure from Veblen West to Veblen East. This manure was to be land applied in the fall of 2008 prior to soil freeze, and the South Dakota DENR was to be notified when this was complete. A notification was not received.

104. In April 2009, the South Dakota DENR received notification from the facilities that the basins at both Veblen East and Veblen West Dairies were above the maximum operating level and into the freeboard of the basins. This was confirmed during a May 6, 2009, site inspection by the South Dakota DENR. On May 20, 2009, Rick Millner contacted the South Dakota DENR to inform them that high winds were causing manure spray to blow over the berms of the north basins and that a line of straw bales was erected to keep the spray from leaving the basins. Various correspondence and inspections in the months of June, July, and August indicated that the basins at both Veblen East and Veblen West were above the maximum operating levels and into the freeboard.

105. The Order, issued October 23, 2009, and amended in March 2010, required both dairies to complete a number of requirements, summarized below, to bring the facilities back into compliance:

1. As soon as possible, remove a sufficient amount of manure to return them to compliance with the freeboard requirements. The Order went on to require the removal of manure from all basins to have no more than one foot of residual material remaining by November 1, 2009. The lowering of the liquid levels in the basins at Veblen West did not happen until December 7, 2009. This lowering of the levels was not sufficient to comply with the October 23, 2009, Order (no more than one foot of manure) but was sufficient to bring the basins back into compliance with the freeboard requirements. Similarly, the lowering of the liquid levels in the basins at Veblen East did not happen until November 23, 2009. This lowering of the levels was not sufficient to comply with the October 23, 2009, Order (no more than one foot of manure) but was sufficient to bring the basins back into compliance with the freeboard requirements.
2. Submit calculations and schedules that demonstrated that the remaining storage capacity within the basins at each facility, after the fall of 2009 pump-down, was sufficient to provide 270 days worth of storage. Sufficient calculations and schedules were never received by the South Dakota DENR. Consequently, the South Dakota DENR concluded that the volume remaining after the fall of 2009 pump-down was not sufficient to provide 270 days of storage.
3. By November 1, 2009, submit an emergency response plan for each of the facilities to identify procedures to be followed in the event of a spill or release. The South Dakota DENR did receive a plan, but it was not sufficient to comply with the specific requirements of the Order. The South Dakota DENR has not yet received sufficient plans.
4. Submit a design report that uses actual water usage and system operation for each facility to assess if the manure management system capacity meets the requirements of the South Dakota General NPDES Permit (270 days of storage). The South Dakota DENR has not received an adequate report to address this issue.

106. On November 17, 2009, the South Dakota DENR performed inspections of Veblen East and Veblen West and also conducted water sampling within the Little Minnesota River (headwaters of the Minnesota River) at areas were there was evidence that discharges had occurred from both dairies. The discharge from Veblen East appeared to reach an unnamed wetland; water sampling confirmed that manure did indeed reach this wetland. Neither of the dairies reported the discharges to the South Dakota DENR as required.

107. Inspections on November 17, 2009, and January 8, 2010, at both facilities revealed that depth markers (designed to clearly identify the maximum operating levels of the ponds) were missing or were broken off.

108. Inspections on July 10, 2008, and January 12, 2010, at Veblen West and December 7, 2009, and January 8, 2010, at Veblen East noted stockpiles of used sand and manure solids in areas not authorized by the permits for the facilities.

109. Inspections on January 8, 2010, and January 12, 2010, at Veblen West and January 8, 2010, at Veblen East indicated that manure application had taken place to fields not identified within the approved manure management plans for the dairies. Also, both dairies had insufficient records of land application dating back to 2008 and including all of 2009.

110. The MPCA has also received complaints about and photos of these facilities, specifically regarding the lack of freeboard, potential for overflow, and pollution resulting from improper land application of manure. The MPCA has received these complaints as the facilities sit at the head of the watershed of Big Stone Lake, located at the border of Minnesota (Big Stone County) and South Dakota.

[Minnesota Pollution Control Agency, In the Matter of the Request for Denial of Contested Case Hearing Requests and Denial of Reissuance of NPDES/SDS Permit No. MN0068594 for The Dairy Dozen – Thief River Falls, LLP (Doing Business As: Excel Dairy) Concentrated Animal Feedlot Facility, Excel Township,Marshall County, Minnesota, Findings of Fact, Conclusions of Law, and Order, 2010.12.14]

Dairy Dozen Converts to Chapter 7; MPCA Nixes Dairy Permit Appeal

The Bernie Madoff of dairy feedlots, serial polluter Rick Millner, is having a very bad week. Millner's Veblen, South Dakota-based dairy management company the Dairy Dozen has been going through Chapter 11 bankruptcy. On Wednesday, U.S. Bankruptcy Court Judge Charles L. Nail, Jr., granted a trustee's motion to convert that bankruptcy from Chapter 11 to Chapter 7.

Chapter 11 is where you get a shot at reorganizing. Chapter 7 is where you throw in the towel and liquidate to pay off your creditors. As I read it, that means the Dairy Dozen is toast.

Then on Thursday, across the border in Minnesota, our friends at the Minnesota Pollution Control Agency officially said no flippin' way (o.k., I'm paraphrasing) to Millner's attempt to reopen his Excel Dairy in Thief River Falls. MPCA shut down that Millner monstrosity in 2009 and denied it a permit in April of this year for hundreds—hundreds—of air quality violations. Millner and fellow Dairy Dozen owners of Excel appealed. MPCA documented Millner's trail of environmental destruction at every dairy he's been involved with, took public comment, and yesterday said no more.

Grand Forks Herald reporter Kevin Bonham says no one answered his calls to the Dairy Dozen's Veblen office Thursday. Maybe they've already sold the phones.

It's a shame that the Dairy Dozen has done so much economic and environmental harm to so many communities. But perhaps South Dakotans and Minnesotans can breathe a little easier with these two big steps toward putting the dirty Dairy Dozen out of business for good.

Hyperion Can't Count, Lowballs Pollution by Half

I hear on SDPB and read on KELO this morning that Hyperion was a little off in its pollution estimates on its proposed Elk Point refinery when it applied for a South Dakota air quality permit. By half:

Hyperion Resources has informed the state that a proposed oil refinery in southeast South Dakota would release almost double the amount of greenhouse gases previously estimated.

Documents from the Department of Environment and Natural Resources show that previous estimates omitted a step in the refining process ["Proposed SD Refinery's Emissions Revised," AP via KELO, 2010.12.16].

Emissions revised?!?! I'd ask what you guys are smoking, but you'd probably miss that by half as well.

But I guess when you've never built, let alone run, an oil refinery before, it's easy to miss a step in the process, right? But golly gee, what steps would you omit when you actually start building the thing? What safety steps would you omit when you fire that sucker up and start belching pollution into our clean prairie air and fresh water supply?

Department of Environment and Natural Resources, tell me you aren't taking these Hyperion incompetents seriously any more. Please. Hyperion can't even report its own projected pollution correctly, let alone build and operate a safe and clean refinery. Throw their permit out.

Dakota Ethanol Pays $75K Penalty for Environmental Violations

Dr. Blanchard has been hammering on the inefficiency and immorality of our federally subsidized ethanol industry. Now the EPA adds some black marks to the local ethanol industry.

Joe O'Sullivan at ThePostSD.com reports that back in October, Dakota Ethanol in Wentworth paid a $75,000 penalty to the Environmental Protection Agency for violations of the Clean Air Act. According to the EPA, Lake County's big ethanol plant emitted more volatile organic compounds than allowed, didn't do the right testing, and "failed to maintain the internal floating roof on the liquid inside several storage vessels at the plant."

The same settlement extracted $150,000 from ethanol producers Poet, James Valley, and Northern Lights for similar Clean Air Act at the Groton and Big Stone ethanol plants. Think of it as a rebate on our federal subsidies for the industry.

Now I know Dakota Ethanol was disappointed with the EPA for delaying adoption of the E-15 standard. But really, fellas, do you think breaking other EPA rules is going to encourage them to vote your way? Maybe this is why Kristi Noem was so intent on demanding the EPA administrator's resignation.

The Department of Justice has the full details of the Dakota Ethanol violations and Poet-James Valley-Northern Lights violations online.

Quack If You Like Prairie Potholes: USFWS Wants to Preserve 1.94M Acres

If you think the 48,000 acres proposed for the Tony Dean Cheyenne River National Grassland Wilderness is a big deal, check this out: Mr. Kurtz reads about an ambitious conservation project proposed by our friends at the U.S. Fish and Wildlife Service. USFWS wants to create a Dakota Grassland Conservation Area that would preserve 240,000 acres of wetlands and 1.7 million acres of grassland in the Prairie Pothole region.

That isn't Florida! It's the Dakota Grassland Conservation Area
proposed by the U.S. Fish and Wildlife Service. It's bigger than Florida.

Don't worry: USFWS isn't kicking us all out of East River. They plan to pay landowners not to tear up native prairie. USFWS estimates that over half of this untilled ground will be developed for farming or housing or some other use over the next 34 years. Such development would seriously degrade what USFWS calls "the backbone of North America’s 'duck factory' and critical habitat for many wetland- and grassland-dependent migratory birds."

To protect this habitat, Fish & Wildlife would buy conservation easements. Landowners keep their property rights and control over public access. Farmers can still farm the wetlands during naturally dry years and graze and hay the grasslands. The land stays on the tax rolls, so local governments don't lose out on revenue. On the budget side, this federal spending appears deficit-neutral: the money comes primarily "from oil and gas leases on the outer continental shelf, excess motorboat fuel tax revenues, and sale of surplus Federal property."

USFWS is hosting three public meetings next week across the Prairie Pothole Region to talk about the plan and gets folks' input:

• December 14, 2010: Minot, ND, 7 p.m.–9 p.m. Sleep Inn–Inn and Suites, 2400 10th Street SW
• December 15, 2010: Jamestown, ND, 7 p.m.–9 p.m. Gladstone Inn and Suites, 111 2nd Street NE
• December 16, 2010: Huron, SD, 7 p.m.–9 p.m. Crossroads Hotel, 100 4th Street SW

This grassland proposal looks like a good deal for all parties concerned, from budget hawks to ducks and geese. But Uncle Sam welcomes your two-cents' worth. If you can't make the meetings, you can submit comments by e-mail to planning team leader Nick Kaczor.

Nebraska Farmers Union Opposes Keystone XL

Governor Heineman Washes Hands of Dirty Oil,
Disses Constituents with Double Standard

Nebraska is a welcome hotbed of activity on the Keystone XL pipeline. The Nebraska Farmers Union packed the house last Friday with a debate on the proposed tar sands pipeline. TransCanada spokesman Jeff Rauh squared off with Plains Justice advocate Paul Blackburn. Robert Pore's account in the Grand Island Independent is worth reading. Plains Justice apparently won the day: afterward, the Nebraska Farmers Union passed a resolution formally opposing the Keystone XL pipeline.

Also speaking on Keystone XL (among other topics) at the Nebraska Farmers Union annual meeting was Nebraska Governor Dave Heineman. During a Q&A, a member of Keystone XL opponent Bold Nebraska asked Governor Heineman to join Senator Mike Johanns in calling for a better study of the pipeline's potential impact on the Nebraska Sand Hills and Ogallala Aquifer.

Governor Heineman's response:

But Heineman accused Bold Nebraska of playing politics with the pipeline issue. Heienman then referred to the Democratic administration in answering the question.

"This is a federal regulatory issue," Heineman said. "There are two people who can stop it -- President Barack Obama and Secretary of State Hillary Clinton -- and that is where our focus ought to be."

Heineman said he appreciates Johanns' efforts and is supportive of it and has sent correspondence to Clinton expressing concerns Nebraskans have about the pipeline project and its proposed route through the Sandhills and across the Ogallala Aquifer.

"Maybe that route needs to change or maybe they don't even go forward with it," he said. "But that is where the decision is -- it is a federal regulatory issue and there's nothing we can do at the state level, at this time, to prevent that. Maybe in the future, but not on this particular one" [Robert Pore, "Merits of Proposed Oil Pipeline Debated at Farmers Union Convention," Grand Island Independent, 2010.12.03].

Fascinating: a Republican governor who doesn't think state-level activists should "play politics" with federal issues. This from a member of the Republican Party that is playing politics with unemployment benefits, the START treaty, and everything else on Congress's agenda in order to get huge tax breaks for rich people who don't need them and won't stimulate the economy. This from a governor who himself is playing politics with federal health care legislation and with the clearly federal issue of immigration.

Governor Heineman has acknowledged environmental concerns about TransCanada's Keystone XL. He now needs to get consistent and apply some of that Republican states-rights backbone to this issue and fight for a better route for the pipeline... or no pipeline at all.

TransCanada Keystone Leak #4: Hartington Pump Station Spews

Check that: it's apparently not the pipeline we have to worry about; it's those darn leaky pump stations.

Carrie La Seur of Plains Justice gets the scoop on the fourth documented leak along TransCanada's Keystone I tar sands pipeline. According to incident report #951480 filed by the U.S. Coast Guard's National Response Center, Keystone Pump Station 24 near Hartington, Nebraska, sprang a leak. The report says, "caller stated a check valve on a pressure transmitter located on the suction side of a line pump stuck open releasing 5-10 gallons of crude oil onto the ground.

The leaks must be working their way south. Check out TransCanada's Keystone system map:

Map of Documented Keystone I Pipeline Pump Station Leaks
May–August 2010 (click image to enlarge)

The previous three Keystone leaks happened at the Carpenter Pump Station in Beadle County in May, then the Roswell Pump Station in Miner County in June, then the Freeman Pump Station on August 10. Was the pipeline passing a stone or something?

Once again, let us review TransCanada's June 2006 pipeline risk assessment:

...the estimated occurrence intervals for a spill of 50 barrels or less occurring anywhere along the entire pipeline system is once every 65 years, a spill between 50 and 1,000 barrels might occur once in 12 years; a spill of 1,000 and 10,000 barrels might occur once in 39 years; and a spill containing more than 10,000 barrels might occur once in 50 years. Applying these statistics to a 1-mile section, the chances of a larger spill (greater than 10,000 barrels) would be less than once every 67,000 years [ENSR Corporation for TransCanada, "Pipeline Risk Assessment and Environmental Consequence Analysis," Document No. 10623-004, June 2006].

Given four incidents in three months, we are now in the clear on small leaks for 260 years. Thanks for getting those out of the way, TransCanada!

Hasselstrom: Keep Public Land Available for Healthy Grazing

My friend Larry Kurtz says some wild things on his blog Interested Party and in various comment sections around the South Dakota blogosphere. But he also directs us toward a lot of good reading, like this essay on the importance of protecting public grasslands for grazing. Among other points, South Dakota author and rancher Linda Hasselstrom notes the superiority of grass-fed beef to factory-feedlot beef:

E. coli contamination thrives in feedlots, but grass-fed livestock, including beef, pork, chicken, sheep, elk, deer, antelope and other wild meat animals, is free of this dangerous pathogen. Range cattle roam freely, rarely spending more than a day in one spot. They must be branded to prevent theft and vaccinated against disease, but they are herded only briefly into corrals. Since cows live outside in all weather, their wastes are scattered and broken down by elements and insects. Pastured cattle never stand knee-deep in manure, because cows don't like to eat near feces. That's why, in winter, ranchers scatter supplementary feed onto clean grass. Buyers who cram cattle into feedlots for fattening waste resources and in the process make the animals—and those who dine on them—less healthy [Linda Hasselstrom, "Private Stash," Missoula Independent, 2010.11.25].

Mr. Kurtz also directed my attention, via the Goat Blog, to this really cool interactive map that helps you find which states are producing the most unhealthy feedlot beef, dairy, and pork. In 2007, South Dakota ranked 16th nationwide for feedlot livestock units: 8th in cattle, 20th in dairy, 11th in hogs.

Make a Stand for Free Market Ranching: Support Tony Dean Grassland!

Mr. Kurtz brings to my attention commentary on another good bill Thune and the Republicans are holding hostage for the sake of more tax cuts for the wealthiest 1%. Well-traveled George Wuerthner at New West observes that S. 3310, the Tony Dean Cheyenne River Valley Conservation Act, would preserve our swiftly dwindling native prairie. Wuerthner also finds it ironic that a bill bearing Tony Dean's name would (contrary to Kristi Noem's willfull ignorance) protect existing grazing rights:

America has very little of its native prairie in any protected status. Most of the plains have been carved up by till farming, and the rest is grazed by livestock. Tony Dean Cheyenne River Valley Conservation Act would correct this by designating 48,000 acres as wilderness in the Indian Creek, Red Shirt and Chalk Hills areas of the Buffalo Gap National Grassland on the borders of Badlands NP. Walking these vast open breathing spaces reminds me of being on the vastness of tundra in Alaska. It’s a sense of freedom that is more difficult to experience in more forested terrain. As with any designated wilderness, livestock grazing will continue. This is particularly ironic since Tony Dean, who was an outdoor writer in South Dakota, railed against welfare ranchers and their impact on the state for decades. However language could be inserted into the legislation to permit buyouts of grazing privileges so that eventually bison, not cattle, will be grazing these lands [George Wuerthner, "Omnibus Wilderness Bill Likely," New West, 2010.11.29].

Welfare ranchers? Did Tony Dean say that?

Well, he let Sam Hurst say it on his website, and in reference to this very land:

Welfare Ranchers on Public Lands," Tony Dean Outdoors, 2006]

Dean himself called the no-bid grazing leases on public lands "welfare ranching" in this article. Neither Hurst nor Dean was advocating eco-socialism. They argue for ending subsidies and letting the free market rule.

The Tony Dean Cheyenne River Valley Conservation Act would create a unique national grasslands wilderness. It's a good idea. So is ending the market-skewing, deficit-widening subsidy to a handful of ranchers who plea for socialism. Why don't John Thune and Kristi Noem get that?

Enbridge Oil Spill: Safety Measures Only Work If You Pay Attention

I'm reading the latest Plains Justice report on the proposed Keystone XL oil pipeline and its threat to the land and water of the Northern Plains. The report includes this alarming timeline of the big Enbridge pipeline spill in the Kalamazoo River in Michigan this summer:

Sunday, July 25, 2010

• 5:58 PM: Pipeline pump automatically shuts down when Enbridge control center in Edmonton, Canada, receives low pressure alarm; the control center attributes the alarm to a “column separation,” meaning that they thought a vapor bubble formed in the pipeline.
• 9:25 PM: First 911 calls from residents near the rupture due to odor
  

Monday, July 26, 2010

• 4:04 AM: Enbridge restarts pipeline
• 4:12 AM: Volume balance alarm (less oil in pipeline downstream than upstream)
• 4:17 AM: Second volume balance alarm
• 4:22 AM: Third volume balance alarm
• 4:36-4:57 AM: Several more volume balance alarms
• 5:03 AM: Enbridge control center turns off Pipeline pumps
• 6:30-8:00 AM: Residents notice strong odor on way to work
• 7:00 AM: Local resident collects oil sample from Talmadge Creek
• 7:10 AM: Enbridge restarts pipeline pumps
• 7:12-7:42 AM: Five additional volume balance alarms
• 7:55 AM: Pipeline pumps shutdown and downstream valve closed
• 9:49 AM: Technician called to check a pump station about three-quarters of a mile from the rupture
• 11:18 AM: A gas utility calls Enbridge to report on oil in Talmadge Creek
• 11:20 AM: Enbridge begins closing valves upstream and downstream of the rupture
• 11:41 AM: Enbridge personnel confirm leak and begin to respond to the spill
• 1:29 PM: Enbridge reports spill to the federal government

The Enbridge bosses in Alberta (that's where the TransCanada offices are, too) got warnings from their system Sunday afternoon. Neighbors smelled oil from the leak. The Enbridge bosses then turned the pipeline back on—twice. Before they had verified the cause of their own alarms, they pumped oil through a broken pipe for another 104 minutes. They didn't close valves in the area of the break until over 17 hours after the initial alarms.

TransCanada assures us they have the plans and equipment in place to address a major spill on the pipeline. TransCanada says they can shut down the pipeline and isolate trouble spots within minutes. As TransCanada pumps 435,000 barrels a day under eastern South Dakota in Keystone I and schemes to build an even bigger Keystone XL to pump 900,000 barrels per day under western South Dakota, I hope they pay attention to their alarms and safety plans better than Enbridge did last July.

Learn more about the Enbridge spill and TransCanada's inadequate pipeline safety plans: read the Plains Justice report!

Nebraska Politicos Speaking up on TransCanada; SD Pols Asleep at Switch

Opposition is rising to the TransCanada Keystone XL pipeline in Nebraska, and it's prettyhard to dismiss these folks as "extreme environmentalists." U.S. Senator Mike Johanns has demanded more information and a different route for the pipeline to protect the sensitive Nebraska Sand Hills and Ogallala Aquifer. Nebraska farmer and State Senator Annette Dubas is leading an interim legislative study of Keystone XL's potential impacts on the state (see the documentation on LR435 here). That committee plans to look into liability, restoration of property, and regulatory oversight.

Nebraska State Senator Tony Fulton apparently shares concerns that Keystone XL could be bad for his state. Even Governor Dave Heineman is worried about Keystone XL's environmental impacts, although he thinks (erroneously) that Nebraska may lack the authority to impose its own environmental regulations over federal rules. (Where there's a will, there's a way, Gov. Heineman!)

This growing opposition comes on the heels of a new report from Plains Justice that finds TransCanada isn't putting enough resources into pipeline emergency response here on the Plains. According to Plains Justice, in all of Nebraska and the Dakotas, TransCanada has in place "one spill response trailer and one boom trailer that together contain 5,000 feet of boom, two skimmers, two portable tanks, and a variety of hand tools and equipment. It has also provided a 14 ft. and 18 ft. boat." Compare that to the Enbridge spill near Kalamazoo, Michigan, last summer. In response to a rupture in a 30-inch oil pipeline, same size as Keystone I and smaller than the 36-inch Keystone XL, Enbridge deployed "over 2,000 personnel, over 150,000 feet (28 miles) of boom, 175 heavy spill response trucks, 43 boats, and 48 oil skimmers." Given those numbers, TransCanada looks woefully underprepared to respond to a pipeline spill here on our prairie.

Nebraska lawmakers are at least willing to ask Big Foreign Oil some hard questions. It's too bad South Dakota lawmakers won't show similar moxie:

• Governor-Elect Dennis Daugaard has defended big tax rebates for the construction of TransCanada's pipelines, rebates that neither Nebraska nor North Dakota offer.
• State Senator and Majority Leader Russell Olson thinks those rebates and those pipelines are wonderful. He has consistently resisted efforts to impose pipeline taxes to establish environmental clean-up funds. Maybe Rep.-Elect Patricia Stricherz can straighten him out.
  
• Neither Senator John Thune (of course not) nor Senator Tim Johnson (Tim! You're our only hope!) signed on to a letter from eleven fellow senators criticizing Secretary of State Hillary Clinton for her apparent pro-pipeline bias.
• I can't find any public comment on Keystone XL from Rep. Stephanie Herseth Sandlin or Rep. Elect Kristi Noem.

Is South Dakota so desperate for economic development that we can't ask a foreign oil corporation to take sufficient precautions to prepare for the inevitable accidents on its pipeline? Nebraska evidently doesn't suffer this spinelessness; South Dakota should find its voice and join the calls to put our environmental and economic well-being above TransCanada's drive for maximum profit.

Tar Sands Bad for South Dakota: Three Neighbors' Stories

Hat tip to Great Plains Tar Sands Pipelines!

The Sierra Club documents how the push for toxic Canadian tar sands oil threatens the health and welfare of South Dakotans. The environmental organization profiles three South Dakotans who have fought Big Oil: Kent Moeckley of Britton and Carolyn Harkness and Ed Cable of Union County.

Moeckly was a notable opponent of TransCanada's Keystone I pipeline, which is now buried under his farmland in Marshall County. When TransCanada announced the pipeline route, Moeckly and his neighbors asked TransCanada to consider alternative routes. He says an oil leak in his neighborhood's sandy, permeable soil could threaten the aquifer that feeds the local rural water system, an objection much like that curently raised by Nebraskans worried that Keystone XL could damage the Sand Hills and the massive Ogallala aquifer. TransCanada paid no attention:

Moeckly says pipeline consultants didn't even survey his land before they reported it as "low consequence" status, which allowed TransCanada to build the Keystone I through the aquifer in 2009, using thinner pipe and higher pressure than any other pipeline before it. When farmers in the area requested thicker pipe to reduce the risk of water contamination, their concerns went unheeded.

"TransCanada absolutely ignored us. They plowed on through," Moeckly says ["Toxic Tar Sands: South Dakota," Sierra Club, Nov. 2010].

TransCanada finished the pipeline last year. They left debris and dirt piles on Moeckly's land that have trapped water and left 15 acres unusable. (Where are the conservative property rights hawks speaking up for Moeckly's rights under the takings clause?)

Harkness and Cable are trying to save Union County from even worse disruption at the hands of the still-pending Hyperion refinery. This tar sands refinery would tear up thousands of acres of prime farm land and threaten the aquifer, air quality, and even the simple view of the stars at night.

Carolyn Harkness would find her farm home 300 feet from the refinery. She doesn't want to give up land that is everything to her family, her home, business, and retirement. She also sees a higher obligation to keep the refinery from tearing up Union County:

"This land belongs to God and it is our responsibility to save it for future generations. It has treated us well," she says. "We need to return the favor" [Sierra Club, Nov 2010]

Ed Cable lives three miles from the proposed refinery site and share's his neighbors' concerns about pollution that owuld ruin one of the cleanest places in the country. Cable has led the legal fight to block construction of the refinery. His group, Save Union County, has played a key role in pushing South Dakota's regulators to do something like due diligence in, if not stopping the refinery, at least making sure the Texas dreamers behind it get their enviromental ducks in a row.

Oops—did I say ducks in a tar sands story?

Moeckly, Harkness, and Cable understand that increasing our dependence on dirty foreign oil is not good for our way of life. As we see from the Keystone I pipeline, the tar sands are already damaging our fair state. We should say no to any more development of this unsustainable resource.

Minnesota Seeks Denial of CAFO Permit for Habitual Polluter

The Minnesota Pollution Control Agency has 111 confined animal feeding operation (CAFO) permits pending. Over the next month, after the standard 30-day public comment period, MPCA intends to approve 110 of them. MPCA has announced its intent to deny reissuance of just one of those CAFO permits.

Who gets skunk eye from MPCA? The New Horizon Dairy LLP of Hoffman, Minnesota. MPCA has dealt with this dairy previously, fining New Horizon $17,400 in 2007 for over-application of manure and use of an unpermitted storage basin.

MPCA now looks at the record of New Horizon and the other dairies connected with its ownership and says they won't get fooled again. You see, New Horizon is another dairy managed by serial lawbreaker and polluter Richard Millner of Veblen, South Dakota.

Speculation: One might look at Millner's horrible, no-good, very bad month and conclude that the regulators, courts, and bankers are piling on. Perhaps they are. Millner has shown a willingness to hire lawyers and mount dogged if sometimes absurd

Say, the press loves a good bloodbath. It remains boggling to me that the South Dakota media have said nothing about the spectacular collapse of Millner's extensive dairy fiefdom. defenses to fend off legal challenges to his dirty business practices. Perhaps MPCA, DENR, AgStar, and everyone else to whom Millner has regularly flipped the litigious bird have been waiting for a moment when Millner's legal resources would be stretched to the limit. This year's bankruptcy proceedings appear to be doing that, and the regulators and others with skin in the game are moving in for a long-overdue kill.

Serial lawbreaker and polluter—that's not just blog hyperbole. That's the conclusion that MPCA supports with this summary of the persistent deception and CAFO permit violations committed at every major dairy Rick Millner has been involved with in the tri-state area. Let MPCA explain (with my occasional emphasis):

...In concurrence with its previous action in the Excel Dairy matter and in accordance with Minn. Stat. § 115.076, the MPCA has preliminarily determined that the applicant has a history of non-compliance with Minnesota rules, statues, and permit conditions. The applicant has a history of routinely modifying feedlot facilities without authorization from the MPCA, allowing discharges to waters of the state, violating the state ambient air quality standards, and noncompliance with permit and administrative order requirements. The MPCA is aware of the applicant’s involvement in seven dairy facilities, past and present, all of which have had various non-compliance issues....

New Horizon Dairy, Grant County, Minnesota:

...A subsequent July 28, 2005, site inspection revealed a discharge to a coulee was occurring during the land application of manure. The manure application rate was 20,000 gallons per acre and the same field had received 18,000 gallons per acre three weeks prior, resulting in over-application of manure nutrients.... Also during the inspection, it was observed that manure had been placed in an unpermitted manure storage structure at the facility as a means of storing excess manure....

Excel Dairy, Marshall County, Minnesota

...In January 2010, the Marshall County District Court issued an injunction against Excel Dairy because Excel Dairy had failed to remove the manure from its basin as its permit required. The injunction required Excel Dairy to remove the manure from the basin as soon as field conditions allowed in the spring of 2010. Excel Dairy has failed to comply with that injunction and has been held in contempt of court for that failure to comply with the injunction.

...When Excel Dairy applied for its 2007 permit, Excel Dairy submitted a narrative Air Emission Plan that stated that Excel Dairy would apply straw to the manure basins to establish and maintain a crust on the basins to control air emissions from the basins. When the MPCA called upon Excel Dairy to comply with the Air Emission Plan Excel Dairy had submitted, Excel Dairy indicated that it had submitted the plan “accidentally” and that it had never truly intended to crust its basins despite what the written plan stated.

...Excel Dairy represented to the MPCA that it would either house 1,104 mature dairy cattle over 1,000 pounds or house a hybrid cow that weighed less than 1,000 pounds so that the facility could stock a total of 1,545 cattle.... [Excel Dairy] instead chose to stock 1,545 cattle over 1,000 pounds at the facility. This would equate to 2,163 animal units, significantly more than allowed in any of the previous permits.

...Excel Dairy has violated Minnesota’s hydrogen sulfide standards hundreds of times since May 2008.... Excel Dairy’s violations have been so severe that the families that live near Excel Dairy have been rendered physically ill by the emissions and have been forced to flee their homes on numerous occasions because of the sickening emissions.

Unnamed Dairy, Roseau County, Minnesota

...Rick Millner operated this facility before abandoning it in 1997. In September 1997, the MPCA staff inspected the abandoned facility and observed manure stockpiles still remaining on site as well as two earthen manure storage structures that still contained manure and were not properly closed.

Lone Tree Dairy, Yellow Medicine County, Minnesota

...In August 2006, the MPCA staff inspected the facility and documented the basin manure level above the basin freeboard limit level and determined that unless immediate basin manure removal and land application occurred, the basin manure level was in danger of breaching the basin’s constructed berm. The MPCA staff also observed that loose soil had been dumped and spread on top of the southeast corner of the basin’s constructed berm in an apparent attempt to prevent basin manure from spilling out the basin’s southeast corner. The MPCA did not approve or issue a permit for this modification of the basin....

Five Star Dairy, Sargent County, North Dakota

In November 2006, the North Dakota Department of Health issued a notice of violation (NOV) to the facility and its managing partner Rick Millner. The NOV stated that Five Star Dairy failed to receive approval from the North Dakota Department of Health prior to constructing a new manure storage pond. Also, Five Star Dairy submitted records that indicated that the facility was stocked with more animals than its permitted capacity of 1,400 head prior to gaining the appropriate approvals....

...Five Star Dairy was once more inspected by the North Dakota Department of Health on October 27, 2009, and, during that inspection, it was observed that the manure storage basins did not have adequate freeboard remaining. Follow-up inspections on November 2 and November 10, 2009, found that the manure storage basins were still above the allowable operating level, and no manure had been removed. A November 19, 2009, site inspection did reveal that some manure had been removed, but the level of manure in the basins remained above the allowable operating level... [Minnesota Pollution Control Agency, Fact Sheet and Public Notice of Intent to Deny the Application for Reissuance of NPDES and SDS Permit for a CAFO Permit to New Horizon Dairy LLP, Hoffman, 2010.11.19]

MPCA also documents Millner's persistent violations of South Dakota environmental regulations and endangerment of the Whetstone Valley/Big Stone Lake watershed with his awful Veblen East and Veblen West dairies, as reported frequently here on the Madville Times.

Seven dairies. Seven dairies. Environmental violations at every one of them.

MPCA counts up the strikes and tells Rick Millner, "You're out!" It's about time. If a state issued a driver's license to a seven-time drunk driver, heads would roll. If a state issued a teaching certificate to a person convicted seven times of child neglect, heads would roll. That a serial offender like Millner has been able to stave off the law this long and pollute his communities for his own profit signals we need tougher enforcement of CAFO rules.

Takings Clause Argument on Smoking Ban? Fire That Lawyer...

Gosh darn it! Mr. Powers over at Dakota War College appears to have misplaced a fun little post he had yesterday claiming that the indefatigable opponents of South Dakota's new indoor smoking ban would try using South Dakota's takings clause to sue the state for compensation for any business losses:

It’s in the South Dakota Bill of Rights that “Private property shall not be taken for public use, or damaged, without just compensation.” Well, certainly one’s business would be considered private property. And it’s indisputable that because of the passage of this law limiting the use of private property that they will, in fact, incur damages of an economic sort [Pat Powers, "I Think They Ought to Send Their Bill to Jennifer Stalley," deleted from Dakota War College, 2010.11.15].

Why the backpedal and delete? Perhaps the lawyers in the War College peanut gallery (I know at least one such sensible solicitor) pointed out that a takings-clause or eminent-domain suit on indoor air quality will go nowhere. The takings clause applies when the government takes private property for public use. The smoking ban takes no private property. It stops private pollution of public property, the air we breathe in public places (thanks, Bill, for the idea!). Banning smoking indoors is more like forcing a property owner to remove a sign that hangs over the public right of way or chop down a tree that has grown to obstruct the sidewalk or the view at the intersection. The takings clause has no application in such situations where the public use is already established.

Or maybe Pat's hypocrisy alarm went off. He's never stood up for South Dakotans or Nebraskans or Texans facing eminent domain at the hands of a foreign corporation. But let the Legislature and the voters of South Dakota impose an environmental rule that annoys his business pals despite no clear evidence of economic impact, and Pat's up in arms. I guess Pat backed down from exposing his property rights flank.

DENR to Vista: No Veblen Dairy Permits with Millner in Charge

The South Dakota Department of Environment and Natural Resources may be about to put one man out of business... permanently.

Richard Millner has managed the giant Veblen West and Veblen East feedlots in northeastern South Dakota for the last couple years. He has also managed dairy operations in North Dakota and Minnesota. His operations have spent most of this year in bankruptcy. His permit to operate Excel Dairy, his confined animal feeding operation near Thief River Falls, Minnesota, was revoked by the Minnesota Pollution Control Agency due to air quality violations so serious that the state advised neighbors of the dairy to evacuate their homes. Last April, the MPCA denied Millner a permit to resume operations at Excel Dairy.

Millner has been battling mightily to cobble together some creative financial plan to reorganize his two Veblen dairies. But operating a dairy with thousands of cows discharging tons of waste each day requires more than capital. It requires a permit from the Department of Environment and Natural Resources. Millner violated the conditions of his permits for both Veblen West and Veblen East in 2009. I checked with DENR and learned that Veblen East met the October 15 deadline for complying with DENR's cleanup order, but that Veblen West did not.

DENR appears to have had enough. In a November 10, 2010, letter, DENR tells Jorden Hill, agent for the "new" company formed by Millner and his partners, that if Millner is involved in any way with management of the reorganized Veblen dairies, they will get no manure permit:

According to legal documentation received from the Minnesota Pollution Control Agency, an NPDES permit issued to Rick Millner for Excel Dairy was revoked by the State of Minnesota because of environmental violations. South Dakota Codified Law 1-40-27 states that an applicant or any officer, director, partner, or resident general manager of a facility for which application has been made is unsuited or unqualified to perform the obligations of a permit holder if the applicant has had any permit revoked under the environmental law of any state or the United States. Therefore, Rick Millner at no point in form or substance can be an applicant, an officer, a director, or resident general manager of Vista Family Dairies and Veblen East Dairy. Rick Millner cannot be the decision maker responsible for compliance with the general permit. The organization chart and the duties and responsibilities of all officers, directors, and managers must reflect this [Jeanne Goodman, Administrator, Surface Water Quality Program, South Dakota Department of Environment and Natural Resources, letter to Jorden Hill, agent, Vista Family Dairies, 2010.11.10; as reproduced in Case 10-10071, Document 474, In re: Veblen West Dairy LLP, U.S. Bankruptcy Court, District of South Dakota, filed 2010.11.12].

The emphasis is in the original. When bureaucrats put things in bold, they mean it.

Millner had a permit revoked in Minnesota. SDCL 1-40-27, a nice little "bad actor" statute, makes the revocation grounds for DENR to deny Millner any environmental permit. As long as DENR believes Millner is the driving force behind the investors trying to retake control of the bankrupt Veblen dairies (and since he signed the disclosure/reorganization plan, that seems logical), DENR can withhold that permit.

Wow. Between DENR and the Department of Revenue, Millner may finally have met his match in South Dakota.
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Read an amended version of the court motion containing the DENR letter cited above.

Today's Farm Report: Messy, Messy, Messy...

Turning to today's agriculture report, here's the news the ag-industrial complex doesn't like to talk about:

• Remember the salmonella outbreak earlier this year caused by Jack DeCoster and his dirty Wright County Egg operation in Iowa? USDA had found all sorts of violations at the Galt, Iowa, facility prior to the outbreak but failed to report them, because "the conditions at the egg plant packing facilities were routine." Filthy, disease-ridden eggs—perfectly normal. Move along.
• Purple water came pouring from the A. J. Bos mega-dairy near Nora, Illinois, in October. Brown I can explain. But purple? An attorney for Bos says EPA has no authority to intervene.
  
• Bos is also opposing further testing of a site for a proposed dairy site near Galena, Illinois.
  
• Meanwhile, the Illinois Livestock Development Group thinks it shouldn't have to follow any regulations: "If I'm operating the way I'm supposed to, what do I need a permit for and why do you need to know who I am?" says ILDG spokesman Nic Anderson. Gee, I don't know, maybe because a single confined animal feeding operation can generate as much sewage as a small city?

The ag-industrial complex seems to think that producing food entitles them to exemption from the rules of civil society. Sorry, fellas: ag is just another business. Every other citizen has to dispose of waste properly: so do you.

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Related: The Independent Local reports that Senators Tester and Hagan are advancing an amendment to the Food Safety Modernization Act to protect small farms and folks who market directly to consumers in farmers markets from legislation that would check the abuses of the ag-industrial complex. Groups who back local food, like the Western Organization of Resource Councils and Dakota Rural Action, as well as the South Dakota Stockgrowers Association, are backing the Tester-Hagan amendment.

Lake Herman Dirtiest in October, Still Safe

We volunteers in the Dakota Water Watch bacteria monitoring project took our last samples for 2010 on October 12. The biology lab at Dakota State University just sent back the draft results for the season.

Charlie Stoneback and I sampled five different sites on our Lake Herman through summer and fall. The highest E. coli ratings for the year came this month, in that warm October weather. Charlie got the highest bacteria reading, 210 colony-forming units per 100 mL, at the sample site right next to his house, at the mouth of the golf course creek. That was over twice as high as the reading he got at the same site in July.

The next highest October readings were at my two sites: 144 cfu/mL at the mouth of the stream on the south tip of the lake, 100 cfu/mL at the mouth of the stream that runs into the lake from the southwest, next to Camp Lakoida. I never got a reading over 100 in any of my other 2010 samples.

What do these numbers mean? Well, there's some E. coli in Lake Herman, and the little buggers apparently enjoyed the warm October weather that didn't really break until this weekend. But even Charlie's high number doesn't exceed the Environmental Protection Agency's single-sample maximum for immersion recreation of 235 cfu/mL (environmental scientists, check that number for me!).

In other words, swimming in Lake Herman is still relatively safe. And we're still filtering nutrients and keeping the water a little cleaner and the property values a little higher at Lake Madison.

Center for Rural Affairs: Keystone XL Wrong Solution for U.S. Energy, Prairie Economy

Hat tip to Great Plains Tar Sands Pipelines!

Remember that corporate claptrap our state senator Russell Olson (R-8/Madison) was spewing about why he voted to give TransCanada millions of dollars in tax refunds for the Keystone I pipeline so South Dakota could enjoy all sorts of economic and energy security benefits, even though North Dakota and Nebraska got the same benefits without giving away any such refunds?

Well, the Center for Rural Affairs weighs in on the pending Keystone XL pipeline to say those benefits don't outweigh the risks to our environment and our economic future. Last week, the Center for Rural Affairs declared its opposition to Keystone XL:

"America must focus on better approaches to securing the energy it needs by developing renewable energy, especially renewable approaches to fueling cars," said John Crabtree, Media Director at the Center for Rural Affairs. "We support developing clean energy resources that we have right here in Nebraska, like wind energy, not increasing our reliance on dirty, foreign energy that we have to pipe in from afar."

The Environmental Protection Agency estimates that securing oil from tar sands and delivering it to U.S. refineries results in nearly double the greenhouse gas emissions as other oil delivered to U.S. refineries.

According to Crabtree, in the long-run, hybrid electric cars powered by renewable sources such as wind and low carbon biofuels will create more jobs and far greater economic opportunity in rural America while confronting the very real threat of climate change [Center for Rural Affairs, press release, 2010.10.12].

Crabtree cites TransCanada's willingness to cut corners with thinner steel and its strong-arm tactics against Nebraska landowners as further reason that Big Oil boosters like Senator Olson are putting the interests of foreign oil corporations ahead of the interests of rural America.

Marshall County Considers Permit for Veblen East Dairy

The Veblen East Dairy in northeastern South Dakota faces another challenge today to its continued operation and pollution of the Whetstone Valley watershed. Included on the Marshall County Commission's agenda this morning is an 11 a.m. hearing to consider a conditional use permit for the "new" owners of the bankrupt Veblen East Dairy.

"New" deserves those "not really" quote marks: Vista "Family" Dairies, which bought Veblen East at less than half its value at bankruptcy auction last month, is made up mostly of the same equity owners who banked on the messy operations of Veblen East and sister dairy Veblen West over the last couple years. Meet the new boss, same as the old boss.

So really, the Marshall County Commission is considering issuing a conditional use permit—i.e., a special favor, an excuse to conduct operations that fall outside the normal zoning rules—to the same bunch who couldn't keep the Veblen East Dairy running properly in the first place.

A county commission acting in the interest of its constituents would use today's hearing to ask some hard questions and allow neighbors from all along the watershed to put their concerns on the public record. Let's see if that's what happens....

Update 2010.10.20 12:51 CDT: From today's Marshall County Journal:

In other business, about 20 people were present when the board approved a conditional use permit to either Vista Family Dairies, LLC or Whetstone Valley Dairy, LLC for the Veblen East Dairy Limited Partnership. The permit was requested by Lee Ann Pierce, Chapter 11 bankruptcy trustee ["Board Hires Deputy Auditor," Marshall County Journal, 2010.10.20].

Iowa Gov. Candidates Debate Hyperion and Jobs

I just found this really good article from Matt Vasilogambros in the Iowa Independent about the proposed Hyperion refinery in Elk Point. Apparently the thus-far pipe-dream-only project is sparking more disagreement between Iowa's gubernatorial candidates than between South Dakota's.

On our side of the Big Sioux River, both Republican Dennis Daugaard and Democrat Scott Heidepriem have said they support the refinery (Scott! Come on!) but have doubts about whether it will come to fruition. But in Iowa, Governor Chet Culver and challenger (and former governor) Terry Branstad appear to stake out opposing ground on the refinery. Branstad says environmental concerns expressed by the Sierra Club and Iowa's former Department of Natural Resources chief Richard Leopold are just bunk that stand in the way of economic development. Governor Culver's team responds that jobs are priority #1 but that the state still needs to protect the environment. Culver likens Branstad's position on Hyperion to the same pro-corporate thinking that led Branstad to open his state to huge polluting hog operations and the unhealthy DeCoster egg operations. (Worth noting:Branstad himself calls Jack DeCoster a rogue businessman.)

Vasilogambros also notes that Hyperion assures Iowans that they will get lots of the Hyperion jobs. (Does Hyperion provide a lesson for South Dakotans complaining about the Larchwood casino?) But Jim Redmond of the Northwest Iowa Sierra Club says that both Iowa and South Dakota will probably get the same bum deal from Hyperion that South Dakota got from TransCanada: Hyperion will import a lot of the labor it needs from other states.