The development of what would be Oregon's second-largest dairy received approval from state agencies Friday, despite an unprecedented amount of controversy and public concern about effects on business and the environment.

The Oregon Department of Agriculture issued a permit with more stringent groundwater monitoring requirements than ever before, but environmental and small-farm advocacy groups say that the requirements don't go far enough to protect the environment.

Lost Valley Ranch will eventually house 30,000 cows, grow crops to feed them and process a huge amount of manure on 7,288 acres where an iconic poplar tree farm currently sits near Boardman. The ranch's owner bought the land in January 2016 from GreenWood Resources for $65 million. Lost Valley Ranch is planned to be second in size to Threemile Canyon Farms, which has 70,000 animals on land about 30 minutes away.

More than 4,000 comments poured into the Agriculture Department and the Oregon Department of Environmental Quality. People are concerned the dairy would hurt the already nitrate-laden groundwater area, affect the Columbia River, spew methane into the atmosphere and signal a change in Oregon's agriculture landscape from small and mid-size family farms to large-scale factory farms.

In response, the permit forbids activities the state has allowed for other dairies -- such as spreading manure over snow-covered or frozen ground -- and requires the most groundwater monitoring wells ever,

--

seven more than the proposed four, for a total of 11.

"We have worked to incorporate many of those comments into the permit where they were applicable to the agencies," said Lisa Hanson, deputy director of the Agriculture Department.

Oregon's groundwater quality standards have been a focus during the application, boosted by The Oregonian/OregonLive's investigation on how the state's water resources are systemically over-allocated and violators often avoid penalties.

Officials emphasized they listened seriously to concerns about the impact of the dairy on groundwater and the river.

"These are rather extraordinary protections," said Don Butcher, the Department of Environmental Quality's eastern region water quality section manager.

Lost Valley Ranch owner Greg te Velde, who is already running a version of the dairy on land leased from Threemile Canyon Farms, said he wants to continue working with local governments and groups as the dairy opens for business.

"We believe that a well-run dairy should proactively implement environmental protections and earn its place in the community," te Velde said in a statement. "We have agreed to all requirements of the confined animal feeding operation permit issued today, and remain committed to protecting the quality and quantity of water in the critical groundwater area."

However, one of the largest complaints went unaddressed: the amount of ammonia and methane dairy and cattle operations release into the air. Oregon has no rules about air pollution for confined animal feeding operations, Lost Valley Ranch's regulatory category.

Methane is a leading cause of global climate change, and beef and dairy operations are large contributors to the greenhouse gas' release. Ammonia and nitrogen already create a haze over the Columbia River Gorge and are causing acidification of gorge ecosystems, which prompted the U.S. Forest Service to ask for the dairy to disclose emission rates for harmful gases.

In 2008, a state-appointed task force produced several recommendations to reduce air pollution from dairies. It was designed to help the Department of Environmental Quality comply with the federal Clean Air Act. A task force published a report that laid out a seven-year plan that would ease dairies into reducing emissions.

The report went nowhere until the current legislative session, when many of the recommendations are now in a bill before the Oregon Senate's Committee on Environment and Natural Resources. It has received one hearing, but has not passed out of committee.

"Oregon has a gaping loophole that really came to light in the agency's decisions today in that we have no laws on our books in monitoring air pollution," said attorney Lauren Goldberg, with the environmental group Columbia Riverkeeper. "The Oregon Legislature has the opportunity to fix that loophole. Today's decision underscores the importance of action and standing up to the 'Big Ag' lobby that's working hard to maintain the status quo as our agricultural industry changes in Oregon."

Those changes also have some farmers concerned. Some worry that Oregon will become more attractive to farmers the size of Lost Valley and Threemile Canyon because of loose environmental regulations.

Oregon is dominated by small to midsize family farms, and larger operations can imperil that local economy, said Ivan Maluski, head of advocacy group Friends of Family Farmers.

In an Oregon Employment Department report, the state lost an average of nine dairies a month between 2002 and 2007. During that period, the remaining dairies nearly doubled in size -- outpacing the national average. Lost Valley Ranch's owner started leasing land from Threemile Canyon Farms in 2002, which Maluski points to as evidence of the shift being spurred by larger dairy operations.

"What happens is these extremely large dairies are able to flip the market with lower prices," Maluski said. "Family farms can't stay in business with these large dairies."

However, te Velde and state officials say Lost Valley will have a positive impact on employment in the region. They estimate the dairy will provide up to 150 jobs through the United Farm Workers union. Some of the milk from the dairy will be sold to local companies, such as Tillamook County Creamery Association.

Te Velde also contends that Lost Valley Ranch will be less water intensive than the tree farm it is displacing.

The dairy's permit says it will recycle 75 percent of the water it uses. Te Velde also requested a transfer of water rights with a neighboring farmer, which a spokeswoman for the ranch said would result in less water being used than the current water rights allow.

Lost Valley Ranch bought 5,000 acres of irrigation water rights from the tree farm. The water was pulled from the Columbia River and then used seasonally. Lost Valley Ranch will use some of those water rights to grow irrigated crops that will feed the cows.

The rest would be traded with a neighbor who holds groundwater rights, and Lost Valley Ranch would use those groundwater rights year-round for dairy operations. Then the neighbor would stop using his own groundwater rights and only use the ones he received in the trade.

If the transfer is approved, Lost Valley Ranch would be allowed to pull 1,037 acre feet of water per year from three basalt wells. As a backup plan, the Port of Morrow agreed to sell the dairy that same amount of water, as it does other farm and dairy operations in the area. The water would then be trucked and piped to Lost Valley Ranch.

That trade is already being challenged by some of the groups who submitted comments to the Agriculture and Environmental Quality departments. The dairy would pull from a groundwater area with restrictions on its use because of a high amount of nitrate in the water.

"People are working hard to restore streamflows for salmon and protect groundwater aquifers," said Brian Posewitz, staff attorney for environmental group WaterWatch of Oregon. "Adding 30,000 cows to an overtaxed system undermines hard work to protect limited water resources."

The Oregon Water Resources Department approved the transfer in a preliminary evaluation. The challenge will likely go before an administrative law judge who will decide after hearing arguments from both sides.

Right now, the ranch is allowed to pump 450 gallons per minute of water for construction. That temporary permit expires April 10.

-- Molly Harbarger

mharbarger@oregonian.com

503-294-5923

@MollyHarbarger