Officials in Maryland and Virginia are taking a hard look at turning poultry litter into fuel, both to enhance water quality and to help make the region energy-independent.

Fibrowatt, a Pennsylvania-based company, is in discussions to build plants on Maryland's Eastern Shore and in Virginia's Shenandoah Valley - both areas with a high concentration of poultry farms. The company already has a plant in Minnesota, the first litter-to-energy plant in the nation.

Perdue AgriRecycle, which has a plant in Sussex County, DE, that pelletizes poultry litter and sells it at as an additive to fertilizer, is also mulling the idea of getting into the energy business. The company collects about 10 percent of all the manure produced on the Shore, but it has the capacity for more, according to officials there.

The interest in manure-to-energy and manure-to-fertilizer plants marks a change in the two states. In the 1990s, Fibrowatt talked to the Maryland legislature about establishing a presence in the Shore but was rebuffed. The company then turned its attention to tiny Benson, MN, population 3,000, which is home to a large concentration of turkey litter.

Perdue, which operates throughout the Delmarva Peninsula, meanwhile found conditions to be most favorable in Delaware; the state gave the company a $1 million loan to get started.

Since then, officials in Maryland and Virginia have changed their tune. The Chesapeake Bay Program produced an analysis on the benefits of turning poultry litter into fuel in January 2008. That year, Maryland Attorney General Douglas Gansler began talking up the idea of litter-to-energy. Raquel Guillory, the spokeswoman for Gov. Martin O'Malley, said the governor now "supports all technology to address poultry litter" in the state. Virginia has undertaken an intense study of the idea, said Gary Waugh, spokesman for the state's Department of Conservation and Recreation.

The Chesapeake Bay Commission, which represents the legislatures of Pennsylvania, Maryland and Virginia on the Chesapeake Bay Executive Council and works with the legislatures on Bay policy, is presenting a manure-to-energy summit in September. The summit will look at the technology and policies needed to move various projects forward, whether they are large-scale projects like the one in Benson or individual farm projects. Ann Swanson, the commission's executive director, said interest is high both because times have changed and technology has evolved.

"We're much more aware, first of all, of manure and phosphorus issues than we were even 10 years ago," Swanson said. "Another thing that has really changed is our drive for energy independence. It opens a new political door, and a new avenue for change. And the third thing is the economic conditions. Every penny matters now."

But, Swanson added, part of what is fueling manure-to-energy development is the EPA's total maximum daily load for the Bay, which calls for major reductions in nitrogen and phosphorus runoff from farming operations in the next two decades. Those reductions are estimated to cost several billion dollars, according to individual states' watershed implementation plans, or WIPs.

Maryland's WIP alone is estimated to cost $10 billion to implement. The pollution reductions required from agriculture are a major part of that cost. Moreover, many farmers are at a loss for what to do next, having already implemented best management practices such as planting cover crops and increasing buffers.

"The reason why people are supportive is because they realize the state could never come up with $10 billion that their own WIP suggests is necessary to reach nutrient reduction goals," said Jim Potter, Fibrowatt's president. "You're talking about $10 billion unfunded, vs. $300 million in private investments."

Fibrowatt began turning poultry into fuel in England, and finished building its Benson plant in 2007. There, it takes in 700,000 tons of poultry waste a year. That produces 55 megawatts of power, enough to power a city of 40,000. The byproduct from the combustion of manure-into-energy is an ash, devoid of nitrogen and rich in potash and phosphate that a fertilizer outfit, North American Fertilizer, provides to farmers for their fields. The advantage of this ash, said officials familiar with the plant, is that it can be calibrated specifically to the land like a commercial fertilizer can, as opposed to the turkey litter itself, which is broadcast on the crops and tends to run off.

Minnesota requires that 25 percent of the state's power come from renewable energy sources by 2025, which gave the local utility incentive to work with Fibrowatt. The power is a benefit, Potter said, but the biggest environmental service is in controlling pollution from nitrogen and phosphorus.

While many in the town supported the creation of the plant, a few worried that it wasn't the best use of the turkey litter, which is a valuable fertilizer. But there is more than enough manure to go around, Potter said.

"It isn't hard to get the manure in Minnesota, and we don't expect it to be on the Shore, either," Potter said. "What we provide is a long-term solution to the challenge of disposing of poultry litter. If you ask a farmer on the Shore, 'what do you think you'll be doing with your poultry litter in 10 years?' they have no idea."

Shortly after its opening, the Minnesota Pollution Control Agency fined Fibrowatt $65,000 for air quality violations. The agency also chastised the company for filing some reports late. But Benson Mayor Paul Kittelson called Fibrowatt "wonderful citizens" and said there have been few issues with smells. Fibrowatt has also brought in almost 70 jobs - about 30 connected to plant employees, and the rest truck drivers.

City Manager Rob Wolfington added: "I have not had a single complaint generated from a single person walking in, calling me, or stopping me on the street. The only time I do get a call is when it's not running and people want to know why."

Perdue encountered a similar reaction in Delaware. People worried about emissions before construction began, but the company said it now hears few complaints. On a recent visit, odors were only obvious when inside the plant.

Perdue accepts manure from 160 of the 1,600 growers on the peninsula, taking in 80,000 tons of poultry litter each year and turning it into an additive for organic fertilizer used on golf courses and elsewhere. Unlike Fibrowatt, it doesn't pay directly for the manure, but it does come and clean out a grower's chicken house to get the product.

Steve Schwalb, vice president for environmental sustainability at Perdue, said the plant could probably double its capacity. For its first decade in business, it operated mostly at a loss; it has just begun to break even.

But Schwalb said Perdue is careful about how it markets to famers, ever mindful of the three-legged stool that is Delmarva's agriculture. Chickens eat corn and soybeans. Farmers use manure to fertilize those crops, which then go to the aggregators to become chicken feed. Many chicken farmers sell their manure to grain farmers who raise feed; without that income, they might not be able to stay in farming, and the last thing Perdue wants to do is push them out.

"Those things need to stay in balance," Schwalb said. "We are always trying to source manure. But each grower has to determine what is best. If they want to sell it to another farmer, that is their business."

Perdue has also looked into manure-to-energy efforts, and its executives have talked to Fibrowatt executives.

Potter hasn't provided specifics on where in the Shenandoah Valley or the Shore his plant might fit best. Last year, the company made a presentation to Page County, VA, supervisors about locating a plant there, but the county's supervisors rejected the plans after a public outcry.

Suzy Friedman, deputy director of the center for conservation incentives with the Environmental Defense Fund, said that, in principle, she supports alternative energy sources as well as finding solutions for the Chesapeake's manure. But, she said, "Where I have concerns is making sure that the right technologies are put in the right places." In the Shenandoah, she said, small amounts of manure are spread over a wider area than on the Eastern Shore, where poultry farming is more concentrated, calling into question the cost-effectiveness of a Shenandoah operation.

Some officials have worried that Fibrowatt will ask for huge incentives before they build. But Kittelson, the Benson mayor, said that didn't happen in his town.

"They pay a good share of taxes," he said. "I thought they'd ask for a tax abatement, but they never did."