FERNDALE, Wash. — Whatcom County dairyman Rich Appel credits his three manure lagoons with keeping the area’s water clean.

“They are absolute lifesavers to the environment,” said Appel, who farms near the Canadian border in northwestern Washington. “They’re just winners. Lagoons are great.”

Dairy farmers around the state say much the same thing about lagoons. And they aren’t the only ones. Lagoons are the government-sanctioned way to store manure and keep livestock waste from fouling streams and aquifers.

That’s why dairy farmers have reacted with shock and disbelief at the idea voiced by critics and regulators that lagoons are under-regulated environmental time bombs, seeping pollutants into groundwater.

The critics’ case was bolstered in January, when a federal judge, after sifting through stacks of studies and conflicting expert opinions, concluded in a landmark Yakima County lawsuit that the Cow Palace Dairy’s 9 acres of lagoons may be the source of excess nitrates found in the groundwater.

Oregon-based environmental lawyer Charlie Tebbutt, the lead attorney for the suing groups, said the ruling foreshadows higher environmental standards for dairies. “The question is, ‘When is the industry going to comply? Not if,’” he said.

Seven months after the Cow Palace ruling, the Washington Department of Ecology proposed regulating dairies under the assumption that all manure lagoons discharge pollutants into groundwater.

The implication was that nearly all dairies would have to obtain a confined animal feeding operation permit. Under current Washington law, a CAFO permit is mandatory only if a livestock operation has discharged pollutants into surface water.

Having a permit, theoretically, can be a defense against lawsuits. But it would mean additional expenses, record-keeping and restrictions on spreading manure on farmland.

Farmers statewide responded to DOE’s proposal with plaintive comments. “I have read and re-read the verbiage,” wrote a dairywoman in Eastern Washington. “I have to say, the first time, I just started crying.”

Some farmers say they can’t afford litigation or more regulation. The uncertainty and expense would drive them out of business, or they would have to move from Washington.

The stakes are high. Washington has 425 dairies with 277,000 cows that in 2014 produced $1.6 billion worth of milk, according to the U.S. Department of Agriculture. After apples, milk is the state’s most valuable farm commodity.

“It’s not that we want to cry ‘wolf.’ But you can’t continue to erode the economic viability of an industry and expect it will stick around. It will eventually die,” Appel said.

DOE’s proposal wasn’t a direct response to the Cow Palace case, but it all tied together, and dairy farmers say it felt like a noose.

Many dairy farmers observed that lagoons were pushed on the industry by regulators in the 1990s. Now lagoons were being called leaky sources of pollutants.

“Is it too hard to understand then that we are not fans of ideas that come out of these government agencies?” a Whatcom County dairyman wrote DOE.

DOE stressed that its proposal was a “tentative draft.” It plans to issue a formal proposal sometime next year.

The DOE’s tentative proposal was simple: If you have a lagoon, you will need a permit. Dairy farmers saw the proposal as overkill because of insufficient proof that all lagoons leak.

Since then, matters have become more complicated.

DOE still holds to the position that all lagoons discharge pollutants. But it now concedes that in “rare” cases, the pollutants don’t reach groundwater.

Where pollutants are likely to reach groundwater, however, dairy farmers probably will be required to obtain a CAFO permit, according to the department’s latest thinking.

It may not matter whether the water is actually being polluted.

The discharge of pollutants into groundwater — no matter its impact on water quality — would be enough to trigger the need for a permit.

The manure produces nitrates that naturally occur in surface water and groundwater, though at high levels nitrates can be hazardous to human health, especially for infants and pregnant women, according to the federal Centers for Disease Control and Prevention. Under certain circumstances, nitrates are converted to nitrogen gas through a process known as denitrification.

The dairy industry contends that because of these natural processes the manure seeping from clay-lined lagoons largely do not pose a threat to water quality.

That position is supported by the King County Department of Natural Resources.

“To date, King County’s regular water quality testing has not identified significant water quality problems associated with dairies,” the department wrote to DOE.

King County officials disagreed with the assumption that lagoons pollute groundwater. “Such unproven assumptions could lead to expensive fixes or retrofits for dairies that may be neither necessary nor effective.”

Environmental groups are pushing in the opposite direction, calling for clay-lined lagoons to be replaced by lagoons lined with two synthetic layers with a leak detector between the layers.

The linings are used by municipal landfills, but are unknown to the agricultural industry.

In the wake of the Cow Palace ruling, Washington State University professor Joe Harrison, of the school’s livestock nutrient management program, was asked to make a presentation on synthetic liners at a regional conference hosted by the EPA.

He sent an email to colleagues nationwide asking about double-lined lagoons and didn’t get a single response.

Based on talking with geotextile companies and a few dairies with single-lined lagoons, Harrison estimated double-lining lagoons would cost $339 a cow for materials and installation. Getting the lagoon ready — engineering, manure removal, dirt work — could add another $300 per cow, based on the experience of one dairy.

Dairy farmers recoil at the expense, especially since they won’t be able to show lenders how the liners will increase revenue.

“It’s just coming right off the bottom line,” said Mitch Moorlag, general manager of Edaleen Dairy in Whatcom County.

The Natural Resources Conservation Service, which sets lagoon standards, favors clay-lined lagoons.

The Cow Palace has agreed to install synthetic liners, but, in comments sent to DOE, NRCS said the court ruling didn’t change its advice to farmers. NRCS warned that synthetic liners can be worn or torn, leading to manure releases worse than any seepage through clay liners.

It’s unclear how far-reaching the Cow Palace case will be, which puts dairy farmers on edge.

U.S. District Judge Thomas O. Rice based his ruling on the conditions at an 11,000-cow dairy, which produces 100 million gallons of manure a year. Rice found the dairy had become “untethered” from its state-approved dairy nutrient management plan. In one instance, the dairy spread 7.6 million gallons of manure on an already sufficiently fertilized alfalfa field, according to Rice’s written decision.

Rice reasoned that once excess manure nutrients sank below plant roots, they are no longer a useful product, fertilizer. At that point, the nutrients become a discarded solid waste and subject to the Resource Conservation and Recovery Act. For the first time, the nation’s fundamental law against dumping hazardous garbage was applied to uncontained cow manure.

The ruling was not a sweeping condemnation of spreading manure on fields or storing it in lagoons. But it was a warning that dairies may have to account for where every bit of manure ends up.

The Cow Palace case makes dairy farmers nervous, particularly in Whatcom County, which has about a quarter of the state’s dairies and has drawn Tebbut’s attention.

The Washington State Department of Agriculture levied a total of eight fines against dairies for discharging pollution in 2013 and 2014. Seven violations were in Whatcom County.

“The farmers in Whatcom County area have had a lot of problems for a lot of years,” Tebbutt said. “We don’t want to litigate. But the only way action happens is when we have a seat at the table.”

In Yakima County, Tebbutt represented a local group, the Community Association for the Restoration of the Environment, and the Washington, D.C.-based Center for Food Safety. The suit originally named five diaries. One closed and two consolidated ownership, leaving Cow Palace, Bosma-Liberty Dairy, and George DeRuyter and Son Dairy.

Rice issued his ruling to address several pre-trial motions. The ruling tilted the case in favor of the suing groups, and the dairies agreed to operational changes in an out-of-court settlement.

At the very least, the Cow Palace case has created uncertainty, Washington State Dairy Federation policy director Jay Gordon said. “There’s a whole new federal statute that’s been applied to dairies. Everybody is going, ‘What if this gets applied to my farm? What are the rules?’”

Gerald Baron’s background in public relations includes representing businesses faced with “organization-threatening events.” He’s written a book about emergency communications in the age of instant news and social media.

He’s now the executive director of Whatcom Family Farms, an offshoot of the county’s dairy federation formed this year with irrigation districts and other farmers. The group’s message is that farmers are responsible land stewards in perilous times.

“I would say ‘crisis mode’ is an accurate description,” Baron said.

In Yakima, groundwater pollution was a problem. In Whatcom County, the Nooksack River flushes fecal coliform bacteria onto Lummi Nation shellfish beds in Portage Bay. Fecal coliform lives in the digestive tracts of warm-blooded creatures, including humans, and is excreted in feces.

A report by a county-level advisory group last year said the water flowing past upstream farms is cleaner than in the 1990s. There are fewer dairies, and the state’s 1998 Dairy Nutrient Management Act improved how farmers handle manure, according to the report.

However, pollution from many sources continues to contaminate shellfish beds. Baron said the county’s dairy farmers are braced for a lawsuit.

In a recent newspaper commentary, the chairman of the Lummi Indian Business Council, Tim Ballew II, said agricultural producers should not seek to defeat or weaken DOE’s proposal. Efforts to obtain further comment from the tribe were not successful.

In an interview, Tebbutt was noncommittal about whether farmers can expect a lawsuit. But he said the dairy industry has been “all talk and no action.”

“Is it fair they pollute in order to profit?” he asked. “Are you allowed to pollute at the expense of your neighbor? The answer is ‘no.’”

Whatcom Family Farmers contend that water running past their farms is already tainted by a fast-growing area across the border in Canada.

The water passes dairies and picks up more pollution in urban areas, according to the group. Whatcom Family Farmers warn that targeting dairies will lead to farms being converted into subdivisions. That will lead to more septic tanks and hobby farms and to greater use of lawn fertilizers.

“The point is, it’s a complex picture,” Baron said. “All the fingers have been pointing at them (farmers). … What we’re saying is, ‘We’re not the primary contributor.’”

DOE has not identified the pollution’s main source, agency spokeswoman Krista Kenner said. “We are looking at all of them.”

Dairies in Yakima County also argued they shouldn’t be singled out for the region’s groundwater troubles. Judge Rice ruled that wasn’t the issue. Dairies were a “meaningful” contributor to pollution, but plaintiffs didn’t have to prove they were the primary polluters. The plaintiffs could pick their target.

Rice also ruled that while experts may disagree about how much manure seeps from lagoons, the important point is that fluids move through permeable substances. The judge reasoned that the pollution will reach groundwater.

The dairy argued that it might take decades, if ever, for that to happen. Rice said he wasn’t going to wait for people to get sick.

The dairy industry calls the Dairy Nutrient Management Act a “game-changer” that improved how dairies control manure.

The nutrient management act requires every dairy to file with WSDA a plan to keep manure from contaminating surface water and groundwater. The Legislature adopted the regulatory scheme to uphold the federal Clean Water Act and provide a “stable and predictable business climate upon which dairy farms may base future investment decisions,” according to the act.

Under the act, WSDA regularly inspects dairies. Previously, DOE investigated complaints that a dairy was polluting water.

The eight fines WSDA levied in 2013 and 2014 for discharging pollution ranged between $1,000 and $24,000. After further talks with the dairies, the department settled by collecting between $1,000 and $7,000.

WSDA also levied three $250 fines for record-keeping violations and sent 123 warning letters.

Appel said his goal is to have a dairy that’s “100 percent” watertight and that additional oversight by DOE won’t help the environment.

“This permit, we don’t see it as improving water quality. We just see it as burdensome regulation,” he said. “The notion that dairymen are loose cannons doing what they want is so far from the truth.”

Tebbutt characterizes dairies as operating in the “dark ages.” In June, he filed a federal lawsuit in Hawaii on behalf of a group on Kauai Island to stop a 576-acre dairy planned by a company backed by eBay founder Pierre Omidyar. The suit, which is pending, alleges violations of the federal Clean Water Act.

Tebbutt said he reached out to the state dairy federation to negotiate, rather than litigate, and was rebuffed.

Gordon, the federation’s policy director, confirmed Tebbutt reached out — within seconds of taking a lengthy deposition from Gordon for the Cow Palace case. After hours of intense questioning about dairy practices, Gordon said his guard was up.

“It just felt like a trap, not necessarily a devious trap. It didn’t feel like a place to have a discussion or negotiation,” he said. “The relationship with Charlie is complicated.”

Gordon said the dairy industry is open to talks about how it can improve. It successfully pushed for state funding this year for workshops to show farmers how to judiciously fertilize with manure.

“The producers in Whatcom County very much understand the Lummi Tribe is (upset),” Gordon said. “Sitting down and having dialogue is incredibly important. Charlie is right on that. … I really hope it doesn’t come to litigation.”

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