WHITEFISH, MT / ACCESSWIRE / May 26, 2015 / Pennsylvania Senate Bill 724 - designed to help the state comply with federal pollution run-off mandates - was well received at a public hearing that took place last week in the Senate Majority Policy Committee. During the hearing, the bipartisan Pennsylvania Legislative Budget and Finance Committee's Executive Director reviewed its 2013 report titled, "A Cost Effective Alternative Approach to Meeting Pennsylvania's Chesapeake Bay Nutrient Reduction Target" that outlined the issue and recommended a competitive bidding program that would substantially reduce costs by engaging private-sector solutions. The Director also addressed the severe potential penalties for failure to meet the state's EPA-mandated 2017 targets.

Bion Environmental Technologies Inc. (OTCQB: BNET), a pioneering provider of advanced livestock waste management technology, is well positioned to capitalize on the legislation. Through its proven and patented technology platform, the company provides low-cost verifiable nutrient (nitrogen and phosphorus) reductions through direct treatment of livestock waste - an untapped reservoir of reductions that are substantially cheaper to produce than the state's alternatives as set forth in the legislative study. Further, very large-scale reductions can be achieved quickly and can help the state meet both its 2017 and 2025 targets.

Bion's technology platform has been 25 years and nearly $100 million in development. It removes nutrients from the waste stream, generating verified reductions that can be "traded" or sold to meet compliance mandates. The nutrients are then recovered to produce industry-standard byproducts that can be sold into the organic feed and fertilizer markets.

Over the past month, the company's stock has risen more than 40% as the market begins to realize the potential applications of its technology and the increasingly likely passage of SB724 as a key catalyst - but its market cap still remains under $30 million. SB 724 seeks to establish a transparent and accountable competitive bidding program into a status quo that represents over $115 billion in annual taxpayer spending that is clearly failing in its clean-up efforts yet proceeds largely without either accountability or transparency. The previously mentioned PA legislative study found that its taxpayers would save as much as 80 percent ($1.5 billion annually) if such a program were implemented.

The company?s technology represents part of that 80 percent savings ? it is discussed in detail in the legislative study. It is the only proven and accepted solution in the market for "wet" livestock waste - dairy, beef, and swine. Management's work with policymakers and stakeholders to develop this strategy to lower costs has further positioned Bion as a leader in the space - a space that could rapidly expand to include not only other Chesapeake Bay states, but any other states looking to reduce agricultural/livestock run-off, such as in the Mississippi River Basin and the Great Lakes.

Wide Support from Industry

The SB724 hearing demonstrated widespread support from the agriculture industry, which is notable. The industry has strongly opposed increased regulation of agriculture but stands ready to participate in a voluntary program based on incentives. For instance, the National Milk Producers Federation's Mike McCloskey (representing some 80% of U.S. dairy production and processing) testified in support of the proposal, saying, "This bill is extremely important to us, as a dairy industry. We have supported it as an entire U.S. dairy industry from the beginning?I assure you that your leadership will be followed by many, many states quickly, after you pass this bill. This is really the solution for farmers around the country to be innovative and become part of a solution we are not part of [now]."

The General Manager of the JBS-Souderton packing plant - the largest animal protein company in the world and second largest meat packager in the world - further emphasized that SB724 would spur rural economic activity by allowing local farmers to increase their herd size, while still meeting the ever-increasing environmental mandates from the federal government. By getting ahead of the issues, these companies could avoid potentially much more costly and restrictive regulations in the future that could be imposed by a federal government that's increasingly desperate for solutions.

For almost 45 years, the livestock and agricultural industries have successfully avoided regulation under the Clean Water Act. Recently, the mostly taxpayer-funded, voluntary agricultural "best management practices" that have been implemented have proven to be substantially less effective than predicted. With EPA mandates putting increasing pressure on the states to act, the industry is starting to realize that a successful strategy will have to include them in a much more meaningful way, since they represent the greatest source of the problem. SB724's competitive bidding program for verified nutrient reductions represents significantly lower costs, for both the agriculture industry and the taxpayer, and faster implementation than regulatory options. These dynamics make the bill unique in that it is supported from several "sides" of the table.

Predictable Resistance

Resistance to SB724 comes from entrenched interests that are now benefiting from the existing and ineffective spending policies surrounding the Chesapeake Bay mandates. For instance, the potential for a reallocation of spending, away from higher cost solutions, which are supported by organizations like the Chesapeake Bay Foundation, toward measurable solutions like those provided by Bion Environmental, has led to vocal criticism of the new proposal from the Pennsylvania Environmental Digest, which is published by CBF's Pennsylvania lobby firm.

The broad criticisms circulated by these organizations include statements like "Senate Bill 724 would promote unproductive practices at significant potential costs," which comes in stark contrast to the reality of the situation - that a competitive bidding program would sharply reduce costs to taxpayers who would only pay for results that are verified vs. the projects they have funded for decades that have made little headway against the problem. The biggest losers may be the entrenched status quo that has spent billions in taxpayer money but hasn't been successful in solving the issue.

Bion Environmental responded to these criticisms in a lengthy report that highlights many of SB724's benefits and rebuts the misleading and, in some cases, false assertions by the Digest. In effect, these industry groups have selectively quoted Bion's public filings in an attempt to derail SB724 and divert attention from the real issues in play. They acknowledge that existing efforts haven't worked, but seem opposed to trying new approaches rooted in verified processes.

The passage of SB724, as it is written or in some new form, is not certain; nothing in politics is. What IS certain, however, is that recently released EPA data shows that Pennsylvania and its taxpayers are facing a default on their Chesapeake Bay mandates of nearly 24 million pounds by 2017, not the "up to 10 million" previously reported. Potential EPA sanctions that can include further municipal upgrades and stormwater projects would likely result in billions more in additional and unnecessary costs.

Verifiable reductions from the treatment of livestock waste represent large scale, very low-cost solutions that can be implemented quickly; and without them, it is unlikely the state can achieve its targets. Pennsylvania's Legislative Budget and Finance Committee, their Auditor General, the Senate Majority Policy Committee and other Pennsylvania legislators have recognized it; the agriculture and livestock industry has recognized its need to play a much larger role; and it is inevitable that something must and will be done to address this largest source of pollution in the watershed.

Bion's Unique Approach

Bion Environmental is uniquely positioned in the space, given that its economic interests are aligned perfectly with those of taxpayers. By providing a solution that addresses the problem at the source, the company's technology cost-effectively reduces nutrient pollution and shifts the burden from high-cost public projects (like water utilities and stormwater) to the lowest-hanging fruit in the watershed ? in most cases, livestock. The solution also provides economic benefits to the farmers through reclamation of nutrients and other resources, reduced land requirements and sustainably-produced branding opportunities.

The company's significant long-term potential comes from the fact that there are nine million dairy cows, 92 million beef cattle, 62 million swine, and several billion poultry in the U.S. that produce about a billion tons of manure each year. In just the Mississippi River Basin, Great Lakes, and Chesapeake Bay watersheds, more than 1.25 billion pounds of nitrogen must be removed each year in order to restore water quality ? creating an enormous potential market for its technology. The strategies and policies being developed in the Chesapeake Bay are anticipated to provide a blueprint for the more than 30 states that struggle with the same issues.

On a global level, water quality is expected to significantly decline over the coming years, according to a Veolia (OTC: VEOEY) and IFPRI paper. Nutrient discharges into water bodies around the world are "alarmingly" high, particularly in Asia, posing a big risk to aquatic environments and human health. Governments in these developing countries may not have the resources to address these issues downstream, which creates an added opportunity for companies like Bion to address it at the source.

Currently the company trades with a market capitalization of just over $25 million, which represents a fraction of its potential value. Investors in the clean water industry, such as American Water Works Company Inc. (NYSE: AWK), Aqua America Inc. (NYSE: WTR), and York Water Co. (NASDAQ: YORW), may want to take a closer look at the stock given its unique value proposition, near-term regulatory catalysts, and the fact that the market may be starting to realize its potential.

For more information, visit the company's website at www.biontech.com.

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