Transcript of Bion Small Cap Nation Interview
SCN’s Julia Sun Interviews Craig Scott of Bion Environmental Technology
Julia Sun: Welcome back to Small Cap Nation, I’m Julia Sun in New York City. Joining me this afternoon, Mr. Craig Scott, Director of Communications at Bion Environmental Technologies and our old friend, Michael Kramer, Analyst at Mott Capital, how are you guys?
Michael Kramer: Good, how are you?
Craig Scott: Good.
Sun: Craig, let me start with you. You are in an industry that is not sexy; but it is very important to the environment and public health. Tell us about it.
Scott: I think that’s a fair statement. Bion has spent many years developing a technology that provides a very high level of treatment for livestock waste. Think big dairies, cattle feedlots, swine operations. We essentially provide the same level of treatment for these large-scale facilities that is provided at a municipal wastewater treatment plant for human waste. The livestock industry is one of the biggest sources of nutrient runoff. That’s the runoff of nitrogen and phosphorus that comes from the livestock waste being spread on the ground, untreated, for its fertilizer value. And once it’s on the ground, it’s subject to run off and it’s now in our water supply. And we’re getting things like dead zones, which are areas downstream where you really support no life. We’re getting toxic algae blooms like in Lake Erie, where two years ago, the city of Toledo could not deliver water to its residents. A lot of environmental problems here and we just really need to get it cleaned up.
Sun: We know that various chemical elements and solutions, for example, as you mentioned, phosphorus, ammonia and other nitrogen compounds, they harm the environment in a very profound way. How are you tackling this issue?
Scott: Well, we’re providing treatment on site, while the livestock waste is still concentrated and before it has a chance to contaminate the environment. And essentially what we’re doing is, we’re not only treating it, we’re actually recovering the assets that are in the waste stream because those nutrients have value and by spreading it on the ground untreated it’s really underutilizing that value. So we’re going to separate those components out; we’re going to capture them separately – independently – of each other. We’re going to produce renewable energy from the waste stream and, really, we’re going to provide a clean tech solution for the livestock industry.
Sun: Can you describe a little about the technology you’re using?
Scott: The technology is essentially a process train system, much like the municipal wastewater treatment industry uses, where we’re going to have different processes going on at different stages of that treatment. Essentially, we’re going to recover the nutrients: the nitrogen and we’re going to recover the phosphorus into useable byproducts that can then be precision-applied versus broadcast through the environment. The renewable energy will be captured; we can – at scale – clean that to pipeline quality gas. It can be injected into a pipeline and taken out anywhere in the country. But one of the things we really are focusing on these days is the ability to provide a sustainable brand for the producer. The industry is under attack in a lot of different directions…not just on the nutrient issue…on the greenhouse gases…on the pathogens…but it’s really produced economic issues for the industry itself, in the fact that they have no ability to expand or to rationalize that supply chain, or relocate the supply chain, into better locations, more efficient locations. A lot of waste in that industry and we can come in a provide that clean tech solution that can resolve a lot of these issues, while at the same time, resolve a lot of our environmental and public health issues.
Sun: Like you said, a lot of these elements, phosphorus, ammonia and nitrogen, they are harmful in this context but if you put them to good use, they can also help the environment so it really depends on where you put them.
Scott: Absolutely. It’s a function of concentration. Anybody that’s fertilized their yard understands what happens when you apply too much fertilizer. You’ll kill the lawn. You can look at most of our major watersheds, the Gulf of Mexico, the Chesapeake Bay, the Great Lakes; we’re seeing the impacts of this ‘excess nutrients’ in the form of these very large algae blooms. These algae blooms block sunlight to the bottom; when they die, they decompose and they essentially suck the oxygen out of the water and create these dead zones. It’s just…it’s a problem that has developed over the years; it’s kind of an ‘unintended consequence’ of this large-scale concentration and now we have a technology that can solve the problem. And the livestock industry is ready to be engaged; they’re willing to be engaged and be part of the solution instead of being the problem.
Sun: How big do you think this market is?
Scott: We really feel like there needs to be a reallocation of somewhere between eight and ten billion dollars in spending [to these lower-cost solutions]. What we’re doing is, we are treating waste downstream and we’re pouring this very clean water into rivers and watersheds that have a lot of contamination from upstream – and it just no longer works. We’re spending eighty to ninety percent of our resources and we’re really treating twenty to thirty percent of the problem. Seventy percent of the problem is coming from upstream.
Kramer: People have been working with livestock now for hundreds of years. Why now is this is such a big opportunity for you and your company?
Scott: So what we’ve got here is the opportunity to clean up an industry that’s just really never had a major cleanup; and that’s the problem. You know, I grew up in Montana, like I said, and we learned a long time ago: you don’t drink downstream from the herd. And that’s what we’re doing and we’re spending billions of dollars to try and make up for it downstream and there’s no way to catch up. It just can’t be done until you directly treat that source.
Sun: Michael where do you see this industry is going?
Kramer: You have more people living and living longer, populations are growing, you have more consumption of protein so that probably means more livestock, more animals, more need for treatment, certainly. And it sounds like, you know, the regulatory landscape may be shifting slightly as well.
Scott: The industry has recognized that there’s a problem. Everybody has recognized that there’s a problem and now we are implementing a policy framework to address that. And really the ‘ground zero’ for this is the Chesapeake Bay. Six years ago they had regulations instituted for the entire watershed and that’s really the first watershed-wide regulation that we’ve had. And as a result of this regulation, we’re now looking at cross-border regulation, where it was generally just within the state. So now we’re establishing these frameworks of how to deal with these multi-state watersheds. Policies are being developed in the Chesapeake Bay that we’re going to apply to the rest of these major watersheds, like the Mississippi River Basin and the Great Lakes, and those policies have to address livestock.
Sun: If I’m one of the farm owners, say on a ranch in Midwest, how do you convince me to use your technology?
Scott: Well, there’s really no ‘convincing’. Once the policy framework is in place to reward that voluntary action of reducing nitrogen, then you’re going to come to us, because we’re going to bring a lot of benefits to your farm. We’re not only going to clean the environmental problem up, we’re going to reduce your costs; we’re going to get that regulatory ‘bulls eye off your back’, if you will; plus, we’re going to bring some new benefits to your farm. We’re going to recover those assets, the nitrogen and phosphorus; we’re going to produce products that are going to be sold. We’re going to produce renewable energy. We’re going to give you those branding opportunities. So we bring a lot of benefits to the livestock industry and that’s why you’ve seen the livestock industry in the last year become a supporter of a policy framework that engages them on a voluntary basis. Because they see that this is inevitable and they understand that they can be part of the solution – and they want to be part of the solution. They don’t want to be the problem. They don’t want to be the problem – from an economic standpoint nor from a marketing standpoint – and we give them the opportunity to bridge that gap. So they’re going to come to us. We believe that the timing is now and it really is just a timing issue at this point. This cleanup is inevitable.
Sun: Okay, thank you so much Craig Scott of Bion Environmental Technologies and thank you Michael Kramer of Mott Capital. I’m Julia Sun in New York City, for more interesting stories on businesses please, visit us as www.smallcapnation.com.