EPC won’t refer Walz Energy to state attorney general

By Audrey Posten, North Iowa Times

Denying a request from the Iowa Department of Natural Resources (DNR), the state’s Environmental Protection Commission (EPC) has chosen not to refer Walz Energy LLC to the state attorney general’s office for ongoing violations at the 10,000-head cattle feedlot and biogas operation under construction outside Monona. 

The DNR declared its intent to seek judicial enforcement in late May, citing three separate infractions at the Walz Energy site, including multiple illegal discharges to a water of the state (Bloody Run Creek) and violations of Walz’s National Pollutant Discharge Elimination System (NPDES) and wastewater construction permits. 

One of those illegal discharges occurred on May 4, nearly two months after the DNR issued a consent order telling Walz Energy to pay not only a $10,000 penalty, but to cease all illegal discharges and comply with all conditions of its NPDES permit. 

Violations have been ongoing at the site since October 2017, when the first discharge occurred, stated DNR attorney Carrie Schoenebaum at the EPC’s July 17 meeting in Des Moines. That was prior to Walz Energy receiving its NPDES permit in January. 

“These ongoing violations contributed to the second discharge,” she said. “In fact, today, Walz Energy is still not compliant with its permit. It’s never been compliant.” 

“These violations have been ongoing despite numerous notices of violation being sent to the facility, despite inspection reports being sent, despite phone calls and in-person meetings,” Schoenebaum continued. 

Schoenebaum said the main problem is that few—or inadequate—stabilization or erosion control measures have been taken at the Walz Energy site, leaving soil exposed. If discharged to Bloody Run Creek, an Outstanding Iowa Water, sediment could hinder trout reproduction and reduce habitat and food sources in the stream, she added. 

The impact on the Bloody Run watershed was also a chief concern of Larry Stone, Clayton County resident and member of the Clayton County Conservation Awareness Network, who spoke at the meeting. The site’s location in an area with karst topography that’s prone to sinkholes is concerning, he noted, because of potential ground water contamination. 

“It is not the place for this kind of facility,” he said. 

Pam Mackey-Taylor, acting director of the Iowa Sierra Club, said the DNR has already given Walz Energy enough opportunities to remedy its storm water issues. 

“It is very easy to have your contractor install storm water controls. Other businesses and industries get storm water permits and install appropriate controls,” she told the EPC. “Already Walz has shown they are willing to thread the needle in any way they can to avoid as many environmental laws as they can. There’s a saying that past behavior is an indication of future behavior, unless there is an intervention to stop it. It is time for you to show them that they need to comply.” 

Walz Energy attorney Eldon McAfee, chief operating officer Jon Haman and another Walz representative, Heath Kellogg, also spoke at the meeting, asking the EPC to consider all the facts before making its decision. 

“We are not here to say that no violations have occurred. We regret those violations,” McAfee stated. “I think my clients work well with this [DNR] field office. I think our frustration can be evidenced by the presentation given, which we feel only tells one side of the story.” 

Walz Energy’s plans involve construction of six open front cattle barns, to go with an additional barn already in existence, as well as a feed storage area, concrete transfer pits and a liquid manure storage lagoon with a capacity of nearly 39 million gallons. 

Also included on the site will be tanks for anaerobic digestion and methane production. Manure from the 10,000 cattle at the site will be captured, and with the help of the anaerobic digester, combined with waste feed products to produce natural gas. 

“We’re taking organic waste that was diverted from landfills, and cow manure, to create natural gas. To me, it’s a wonderful model that can protect water supply,” Kellogg explained. “When we see this transportation fuel, as everyone turns to Amazon and having everything delivered on a truck, this is going to be a great, sustainable way for Iowa to continue to grow and continue to develop its renewable energy industry.” 

Walz, Kellogg said, doesn’t see itself as merely a cattle operation, but instead a renewable energy company. 

McAfee also disputed the DNR’s characterization of the second discharge, noting that it came from a tile line. 

“I’m not convinced that qualifies as a surface discharge,” he said. 

Haman said surrounding properties could have impacted water turbidity, as well. 

Contrary to Schoenebaum’s statements, Haman said “a fair amount” of the site has been seeded. A containment berm has been developed, and the entire site is designed to drain into a lagoon, he added. 

“Nothing is leaving the site,” he said. 

Mother Nature just hasn’t been on their side, the Walz representatives explained. 

“We seeded. Some of it grew, and some of it didn’t,” Haman said. “And during the course of construction, things move. When this happened, we bolstered it up.” 

Because of the rough winter and spring weather, additional stabilization or erosion control measures would have actually done more harm than good, he conceded. 

“I would cause more environmental harm going on that site than if we left it alone.” Haman said. “Until I’m done with that project, it makes no sense to put top soil back where excavation is still going to occur. We’ll seed it all once we get final grades done. We will put it back where it was so we can raise grass, trees and butterfly gardens.” 

When issues have occurred, Haman said he hasn’t tried to hide anything. He’s been at the site right away, seeking solutions. 

“It’s not malicious,” Kellogg assured. “We’re doing our best.” 

Construction at the site has been halted since December, but Haman said it should begin again in two weeks. He expects the project to be finished by the end of this year. 

“Once the lagoon and digester are complete, then we’ll have the DNR field office out to take a look to make sure they’re happy with what we’ve got there,” he said. 

“It’s challenging,” admitted EPC commissioner Nancy Couser of the situation. “They did try to do the right thing, but it seems inadequate. So the question becomes was it inadequate because there wasn’t enough effort, or was it inadequate because conditions didn’t allow it to stay that way?” 

Commissioner Rebecca Guinn said Walz Energy should have known, going into the project, what measures it needed to take to prevent these violations from occurring. 

“There were clearly indications up front that they weren’t following the right procedures,” she said. “That, in general, gives me concern.”

“It’s a very sensitive site. That’s a very sensitive part of the state. They’re proud of their water,” stated EPC chair Ralph Lents. 

“You need to do as much as you can to protect it,” he told the Walz officials. “I feel like you could have done a better job of trying to control some of these discharges.” 

“I think the long-term goals of this project are important to our state and to our country,” but that shouldn’t hinder compliance with state laws, said commissioner Mary Boote. “We are here to protect Iowa’s environment. What I’m seeing, what I’m hearing, is that you’re [Walz] trying to do that as well. Where I want to see this go is putting it in place where that compliance is not stepped back and they continue to move forward and accomplish their goals.” 

Commissioner Harold Hommes said other cases referred to the state attorney general’s office have oftentimes been more serious and drug on for years without a solution. He wondered why the DNR has not utilized more of its own enforcement capabilities, and why it’s seeking judicial enforcement after such a short timeframe. 

“Hundreds and thousands of these sites are permitted throughout the state. It’s not that difficult to comply with a storm water permit. We told them exactly what they needed to do,” Schoenebaum said. “We’ve been working with the facility since last October. It’s July and the site’s not been stabilized. The consent order did not work. This shows an administrative remedy is not enough to bring this site into compliance.” 

“In total, one provision of the Iowa code has been violated, approximately three provisions of the administrative code, and approximately eight permit conditions,” Schoenebaum added. “This is a case where there’s been actual environmental harm. Obviously, the environmental harm could get worse.” 

McAfee balked at Schoenebaum’s assessment, disagreeing that Walz Energy has been unresponsive toward the DNR. He said Walz made a counter offer to the March consent order, but the department “pulled it.” 

“We didn’t reject it,” he said. “We were still negotiating.” 

“We realize it’s a tough issue,” he continued, “but I don’t believe those violations rise to the level of referral to the attorney general. We believe those violations can be handled with the department. If the case is not referred, I can assure the commission we will work with the field office.” 

The EPC is a panel of nine citizens who provide policy oversight over Iowa’s environmental protection efforts. EPC members are appointed by the governor and confirmed by vote of the senate for four-year terms. Five votes are needed for a referral to the attorney general’s office. With only five commissioners present at last week’s meeting, the vote needed to be unanimous. 

“I would remind you that it’s not the commission’s job to say who’s guilty and who’s not guilty,” Lents explained. “We’re here to decide whether there’s enough evidence to refer on to the attorney general.” 

Guinn made a motion to refer the matter on, but that motion died for lack of a second. 

Following the meeting, Schoenebaum said the DNR still has the legal authority to pursue an administrative enforcement action against Walz Energy.