‘The cleanup crew’: Leaders behind controversial NY biochar business have ties to troubled Nebraska ethanol plant

Source: By HAYLEIGH COLOMBO, Lincoln Journal Star • Posted: Thursday, December 15, 2022

Three business partners from Saratoga Biochar Solutions in New York say they’ve found an environmentally friendly way to turn sewage sludge into a “revolutionary new bio-fertilizer.”

The company includes an official who previously worked at the AltEn LLC ethanol facility shut down by the state of Nebraska over environmental concerns. He now plans to take hundreds of thousands of tons of treated sewage sludge annually from wastewater treatment plants and transform it into a substance called biochar at their proposed multimillion-dollar facility in upstate New York.

“We’re the cleanup crew,” said Bryce Meeker, president of Saratoga Biochar Solutions, who previously worked with the AltEn facility in Mead. “We found a way to bring it all together because we see the bigger picture. Environmentalists hate it when I say this, but we kill so many birds with one stone it’s ridiculous. We’re taking care of numerous problems with one little 50,000-square-foot facility.”

But the three corporate officers’ past business experience shows that two of them have been involved with companies in other states that have generated environmental concerns from state regulators, former neighbors or both. And the company’s CEO has no experience in the waste or biosolids industries.

Along with the company president’s ties to AltEn, a review of the three corporate officers’ past business experience by The Post-Star in Glen Falls and Lee Enterprises’ Public Service Journalism Team found the following:

* The chief operating officer’s former Iowa business, which he sold to pursue the biochar idea, was accused by former neighbors of making them sick when the business stored sewage sludge on nearby farmland. Environmental regulators in Iowa ordered the sludge be moved off the land after investigating a complaint about improper storage. A lawsuit filed by the family and contested by the Iowa business eventually ended after the parties came to a settlement.

* Saratoga Biochar Solutions’ CEO doesn’t have any professional experience in biosolids, having spent most of his career in information technology. He said he got the idea to turn sludge to biochar from his accountant’s uncle as an investment opportunity after retiring from the IT company he led.

* The leadership team’s past attempts at getting approval to build their “carbon fertilizer” plant in other New York communities failed, with one town supervisor saying he’d let them build the plant there “over my dead body” because he didn’t want to be a “guinea pig” for the technology.

The leaders at Saratoga Biochar Solutions have defended their past experience, saying their challenges at other companies were learning experiences that led them to find a better way.

Ray Apy, the company’s CEO, said chief operating officer Lee Wulfekuhle “wasn’t aware of what’s in biosolids” when he started his business in Iowa.

“That’s why he sold the business and wants to find a better way,” Apy said. “That’s what we’re doing here.”

Apy also played down company president Meeker’s involvement in the Nebraska environmental problems at ethanol plant AltEn LLC, saying “he didn’t own the company” and “didn’t make the decisions” there.

“I know enough about the past with AltEn,” Apy said. “I didn’t work there, but I can say this, the primary difference(s) you have are the people leading the effort. You’ve got Lee and Ray and Bryce here, who really care about doing the right thing.”

Meeker said he learned “you’ve got to be very careful how you engineer things” as a result of being involved in the AltEn facility.

Still, neighbors in Moreau, a town of about 15,000 in upstate New York, have expressed concerns about the plant and sued the town to stop it from opening after town officials approved it in August. They say the prior business dealings of the company’s leadership are concerning.

“There’s nothing about this company that gives them confidence,” said Tracy Frisch of the Clean Air Action Network of Glens Falls, an environmental group that tries to reduce air pollution.

The company hasn’t broken ground on the project yet despite getting approval earlier this year from the town of Moreau. They’re still awaiting approval from state environmental officials and the results of a lawsuit filed by local activists. They will also soon present the proposal to the public at a meeting on Dec. 19.

The New York State Department of Environmental Conservation said in a statement that the regulator “can consider an applicant’s compliance history, including out-of-state non-compliance with environmental laws, in evaluating permit applications.”

“As with all permit applications, DEC will subject the Saratoga Biochar applications to full review for compliance with regulatory standards that are protective of public health and the environment,” according to DEC. “DEC’s review of the materials submitted by the applicant is ongoing.”

Meanwhile, the company says the community should give them a chance to prove themselves.

“We’re eager to prove that we’re right,” Apy said. “I cannot wait when that happens so that we can go and show the world, ‘See, this is how it works. This is exactly how we designed it, and it’s successful.’ And then you’re going to see these things popping up all over the place because it is the answer to a very serious problem.”

On its website, Saratoga Biochar Solutions describes itself as a “Main Street business that was established to build, own, and operate a carbon fertilizer manufacturing facility in Moreau.”

But before the group decided to pitch their idea to Moreau, they unsuccessfully pursued the sludge-to-biochar idea in other communities.

Wulfekuhle and Meeker formed Element Carbon Hudson Ventures after meeting through “a shared personal connection in the biochar world,” Meeker said. They registered the company to an RV resort in Sunrise Beach, Missouri, near Lake of the Ozarks, where Wulfekuhle moved after leaving Iowa.

Despite living in the Midwest, they wanted to pursue a biochar plant in New York because they believed it would be more lucrative there to get rid of sewage sludge compared to the Midwest, Meeker said.

“I looked in Kansas City, we looked in Iowa … but just the economics weren’t quite there,” Meeker said. “You have to go where the tip fees (are) and where it pays to be, quite frankly, where the problems are.”

The Empire state faces some of the steepest challenges in dealing with the massive amount of sewage sludge its residents generate: New York City alone produces 1.3 billion gallons of wastewater on average every day. The state has made headlines in the past for the “poop trains” full of sewage from NYC that have traveled down to Alabama for disposal after treatment plants in New York ran out of capacity.

Cities have looked for new solutions to deal with the sludge as landfilling it or giving it to farmers to apply to land have become less feasible now that regulators are more concerned about contaminants in sludge.

In late 2019, Meeker and Wulfekuhle approached the town of New Windsor in Orange County, New York, with the idea to convert human waste into bio-fertilizer. They even signed a lease for a property that would be the future home of their business.

When they pitched to the New Windsor town planning board, Meeker showed a photograph of a “dead zone in the Gulf of Mexico,” afflicted by the same blue green algae that also impacts lakes, rivers and streams in New York, and explained that their project would help solve the state’s problem of overflowing landfills and pollution.

They passed around a sample of the fertilizer, encouraging planning board chairman Genario Argenio to “put it in your garden.”

“I’m not being a wise guy, I’m being serious,” Meeker said, according to a transcript of the meeting.

Argenio seemed skeptical about the idea, saying “I’m going to put it in the garden, if you poison my family, I’m going to come looking for you.”

But what ultimately killed the deal was the displeasure of New Windsor’s town supervisor, George Meyers.

“I said to the guy, ‘Listen, you can go to the planning board, but this will probably happen over my dead body,’” Meyers said. “It had never been done before anywhere else. Why should I be the guinea pig?

Meeker chalked up the failure in New Windsor to local politics gone awry.

In another Orange County town, Wallkill, they brought their idea to town officials but quickly ran into concerns about odors impacting a nearby condo complex and a prohibition on solid waste facilities.

It wasn’t until the executives joined up with Apy and found Moreau that they encountered town officials willing to take a chance on them, despite opposition from neighbors over odors and potential pollutants emanating from the facility. Moreau’s officials have hoped to get more tenants in Moreau Industrial Park, which has only had one other occupant since its creation more than two decades ago.

Apy, who lives in Saratoga County, said after scouting sites in New York, Moreau was “a clean hit” because of its proximity to necessary truck routes, and availability of water, gas and sewer utilities, and open industrial space.

The company also has local investors. Apy says that some of the investors in Saratoga Biochar Solutions’ parent company, Northeastern Biochar Solutions, are “active Saratoga County people.”

Northeastern Biochar Solutions had 18 investors as of mid-2021, according to federal SEC paperwork the company filed last year, but Apy wouldn’t reveal the identity of the investors besides himself, Meeker and Wulfekuhle. Apy said none of the investors are Saratoga County or Town of Moreau elected officials.

“Three or four of them are well beyond retirement age successful business people that have operated businesses in upstate New York and elsewhere,” Apy said. “A couple are active Saratoga County area people that are more like my age, friends, and then we’ve got some just family members that invested in our business plan.”

After months of debate between company officials and Moreau residents who have showed up to several public meetings to protest the project, the Moreau Planning Board voted 4-2 to approve the project in August.

The team acknowledged they’ve had lots of “roadblocks” to getting their plant approved.

“I hate to say this, but if every environmental entrepreneur has this kind of negative reaction from societies, particularly blue states that are interested in climate change, we’re all screwed,” Meeker said.

Meeker didn’t start out as an entrepreneur. He previously worked overseas for a Russian investment bank and a renewable energy investment company in Ukraine.

After his time overseas, he spent 2013 to 2019 as director of corporate development for E3, LLC, a Kansas-based company affiliated with running an ethanol plant in Mead, Nebraska known as AltEn LLC, turning corn into renewable energy.

E3 owner and energy entrepreneur Dennis Langley made big promises about the creation of the plant when it first launched. Instead of fossil fuels to power the plant, it would use methane gas from cow manure.

“The future is now, the future is here,” Langley said of the idea back in 2006, according to a video testimonial published now on YouTube.

But after the plant got up and running, the AltEn facility eventually transformed into a nightmare for state environmental regulators.

After years of environmental complaints and violations, it was shut down by the state of Nebraska in 2021 for pollution, groundwater contamination and failure to comply with operation and maintenance requirements.

The plant’s issues stemmed from AltEn’s use of discarded, pesticide-treated seed corn as the primary feedstock for the plant, unlike most other ethanol plants which use field corn, according to a lawsuit filed in 2021 by the state of Nebraska.

The state said it learned in 2018 that byproducts from AltEn’s ethanol production “could contain measurable residues of pesticides.” The byproducts not only had a foul smell, but neighbors also complained that their dogs got ill when they were ingested.

Along with ethanol, the AltEn plant produced biochar, but that substance was also found by the state to contain pesticides and was eventually prohibited from use for agricultural purposes, according to the complaint.

Meeker’s LinkedIn profile says that he was charged with “expanding bio-refining capacity,” “business development, sales and marketing,” “business strategy and financial planning” and “deal origination” for E3. A U.S. Department of Agriculture website listing “damaged grain buyers” lists Meeker as the point of contact for the AltEn facility.

Meeker has described his role at AltEn differently at various times over the last year.

Earlier this year, in touting his experience to local residents, Meeker said he “built a plant up in Nebraska for a refinery up there to process waste, biomass,” describing the situation in Mead as “actually a very sad story.”

“They couldn’t come up with the money to put in additional gasification capacity, which is a real loss because the plant had a lot of very advanced features,” Meeker said.

But in an interview with the Post-Star and the Public Service Journalism Team, he said “I was just the guy that brought the deals to the table” and that he served in an advisory role.

“I was not responsible for building that facility, I was just an employee at that facility, and I did leave to pursue this for good reasons,” Meeker said.

Meeker said the difference between what they’ll build and operate in Moreau and the environmental disaster at AltEn LLC in Mead will “all come down to design and in making the right decisions.”

“They had constraints … we’re starting with a blank slate,” Meeker said. “The last thing we want to do is do anything that would create an odor complaint, or health complaint. Oh my God, that would be the worst thing. We don’t want this to affect people around us. … People think industrialists don’t care. We’re different. Our ambition is to prove you wrong.”

Frisch, the local activist, said Meeker’s description of what he did in Mead didn’t inspire confidence.

“On the one hand he’s claiming he’s built the facility. On the other hand, he’s washing his hands of any responsibility,” Frisch said.

Another of Saratoga Biochar Solutions’ leaders, chief operating officer Lee Wulfekuhle, has touted his experience “spreading bio-waste in the Midwest” through his former Iowa-based company, Wulfekuhle Injection and Pumping.

That experience, however, includes being accused by neighbors of making them sick with “toxic chemicals” after the company stored sewage sludge on farmland that it hauled from a wastewater treatment plant in Cedar Rapids, Iowa.

Jim and Karen Ellerbach, who farmed for 35 years in New Vienna, Iowa, said their problems started in 2009 after Wulfekuhle’s firm signed a contract with the city of Cedar Rapids to haul and stockpile sludge that was left over after a flood damaged the city’s wastewater treatment plant.

“With the incinerator out of commission, the city has had to do something else with the sludge,” according to an April 2009 report in The Cedar Rapids Gazette. “In fact, in recent months, the city has had to stockpile the sludge in certain places in the country until farmers could get back into fields to apply the material.”

The Ellerbachs said they were the unlucky people who lived near where the sludge was stockpiled. They said the odors and emissions from the sludge made them sick, causing frequent vomiting and diarrhea.

“My husband was out getting field work done ready to plant beans,” Karen Ellerbach said. “He comes in the house and said, ‘Oh my god, there’s this rotten smell coming across from Wulfekuhles.’ It got to him so much, here he is hanging out under the tractor window, throwing up, trying to plant his beans.”

They say the issue ultimately drove them away from their farm and they want residents in Moreau to know what happened.

“I think they should know Lee Wulfekuhle’s past with this here,” Jim Ellerbach said.

Wulfekuhle said the complaint with the Ellerbachs boiled down to “a jealousy complaint.”

However, the state of Iowa also took issue with the sludge being stockpiled near the Ellerbach home. In September 2009, the Iowa Department of Natural Resources issued a notice of violation to the city of Cedar Rapids after investigating a complaint regarding improper field storage of the sludge.

The DNR ordered that all stockpiled sludge that originated from Cedar Rapids be removed from the site, relocated to the wastewater treatment plant, taken to an approved landfill or be immediately land-applied.

Wulfekuhle said that while “I’m the one that brought it there,” the “notice of violation” was technically issued to the city of Cedar Rapids. A staff member at the Iowa Department of Natural Resources confirmed that the notice of violation was against the city, not Wulfekuhle’s business.

“But more or less I did everything by the law,” Wulfekuhle said. “The only thing (is) the city of Cedar Rapids didn’t have a stockpile permit. But everything else was done correctly.”

Wulfekuhle also said it was “disinformation” that the Ellerbachs became sick.

“I’ve been doing this for 24 years and I have never become sick from anything,” Wulfekuhle said.

However, the Ellerbachs shared a September 2009 letter to Jim Ellerbach from an Iowa family doctor, which notes that the doctor diagnosed him with pneumonia, reactive airway disease and chemical irritation due to “fecal human waste product being spread out on his neighbor’s property.”

The doctor, Chadwick Nachtman, noted that Ellerbach should wear a mask or even leave his farmland but noted that “unfortunately (that) is a little harder because that is where he lives and makes a living farming.” Nachtman said he could not comment on the matter due to patient confidentiality.

Independent research studies have also found that land application of biosolids have made neighbors sick, including one study authored by a University of North Carolina professor that analyzed the experiences of dozens of people nearby sludge land application sites across three states.

“Some residents living near land application sites associate physical symptoms such as mucous membrane irritation, respiratory and gastrointestinal distress, headaches, and skin rashes with land application of sewage sludge,” according to the report.

The couple says the aftermath of being exposed to the sludge still affects their health, with bouts of nausea and diarrhea that can’t otherwise be explained.

“To this day, we still get flare ups,” she said.

The Ellerbachs ended up selling their land and moving off the property and moving to a nearby town.

“It was so damn depressing,” Karen Ellerbach said.

A lawsuit filed by the Ellerbachs, accusing the company of causing “chronic offensive odors and other disturbances,” and contested by Wulfekuhle Injection and Pumping, eventually ended in 2012 after the parties came to a confidential settlement.

At the time, Wulfekuhle Injection and Pumping responded to the suit stating that the “defendant’s application of the organic fertilizer on the agricultural property was consistent with accepted agricultural practices.”

Wulfekuhle said he used to think that using sewage sludge on land was a “win-win.”

“I thought back in the day when we were doing it … that we were keeping it out of the landfill and spreading it on farmland and farmers were reusing it for fertilizer,” he said. “Over time I became aware that incineration and land application is not the best thing.”

Saratoga Biochar Solutions’ CEO, Apy, acknowledges his lack of recent experience in the environmental sector. But he said he has all the relevant business experience to run the plant.

“I’ve never built a biochar plant before,” Apy said. “But I’ve successfully run a technology business and I’ve been in business in upstate New York for 34 years. … I have quite a depth of experience in developing businesses and staffing businesses and running them successfully and growing them.”

In fact, Apy found the biochar idea when he was looking for his next career move after leaving behind a career in the IT world. That was around the same time that Wulfekuhle and Meeker were pursuing previous iterations of the biochar idea, the partners said.

“I pulled my parachute,” said Apy, who previously was president and CEO at Annese and Associates, which was eventually acquired by a larger firm. “I was 51 years old looking for something else to do.”

Apy said his accountant’s uncle was the person who introduced him to the idea that there was an investment opportunity in processing biosolids. He met Meeker and Wulfekuhle when they were “both interviewing the same manufacturer of thermal processing technology,” Apy said. They declined to disclose the name of the manufacturer.

The trio “found a lot of common ground” after meeting, Apy said. They merged Meeker and Wulfekuhle’s company, Element Carbon Hudson Ventures, into the company now known as Northeastern Biochar Solutions, Saratoga Biochar Solutions’ parent company, in 2021.

“We decided to proceed together as a company and bring our businesses and our ideas together,” Apy said.

Apy said he was attracted to the biochar business because it would allow him to put to use his college degrees in environmental science. Apy graduated from New England College in 1989 with a bachelor of Arts in Environmental Studies and has a master of science in environmental science from the State University of New York.

After graduate school, he said he spent about two years working for an aquatic toxicology research firm and an environmental consulting firm before going into IT.

“That absolutely rekindled my flame, my ideology around environmental science and trying to do something that’s successful in business, but also good for society and the planet,” Apy said.

Meanwhile, residents in Moreau are worried the project will negatively impact their neighborhood. They said their town officials should have asked more questions before approving it.

“You want to do your due diligence and vet companies before you welcome them into your community,” said Frisch, the environmental group leader.