Missouri Water Seminar, September 10-11, 2015, Columbia, MO

1. Nutrient Trading in Missouri
David Carani
REGFORM Missouri Water Seminar
Columbia, MO September 2015
Friend, Foe, or Phantom?

2. Nutrient Reduction is a
National and State Issue
 Chesapeake Bay TMDL
 MS River Gulf of Mexico
Nutrient Reduction Task
Force
 Legal Challenges
 State Criteria
Development Efforts

3. Nutrient Removal
Technologies are Expensive
TN: No Removal
TP: No Removal
TN: 8 mg/L
TP: 1 mg/L
TN: 6 mg/L
TP: 0.2 mg/L
TN: 3 mg/L
TP: <0.1 mg/L
TN: 1 mg/L
TP: < 0.02 mg/L
$0
$10,000,000
$20,000,000
$30,000,000
Secondary BNR ENR LOT RO
Present Worth per MGD Capacity
Adapted From WERF 2011, "Striking the Balance Between Nutriet Removal in Wastewater Treatment and Sustainability"

4. What is Water Quality Trading?
Market-Based Compliance System Where One
Discharger Buys or Sells Pollution Credits from
Another
Point-to-Point
Point-to-Nonpoint
$$$
Buyer (Wastewater
Treatment Plant)
Water Quality Credits
Point-to-Nonpoint
Source Trade
Seller (Farm)
Ancillary Benefits
$$$
Buyer (Wastewater
Treatment Plant)
Water Quality Credits
Point-to-Point
Source Trade
Seller (Wastewater
Treatment Plant)
Not limited to nutrients
Cross-state trading

5. Gulf of Mexico Nutrient Loss
Reduction Strategies
All 12 states with
completed strategies
are looking into
nutrient trading as a
potential approach
for reductions

6. Missouri Nutrient Loss
Reduction Strategy
 Missouri Nutrient Loss Reduction
Strategy (Dec. 2014)
 Agriculture
 Municipal and Industrial
Wastewater
 Urban Stormwater
 Decentralized Wastewater
 Build off of previous efforts to
investigated potential for trading over
the next 1 - 5 years

7. Progress in Missouri
 2011 – MDNR develops
nutrient tracking tool
 2013 – Missouri Innovative
Nutrient Trading (MINT)
project finalized
 2015 – Nutrient Trading
Workgroup

8. Nutrient Trading Workgroup
 Goal – Develop a framework for a trading program
that will meet water quality standards and achieve
watershed goals
 Monthly meetings to discuss individual framework
issues
 Point and non-point source subcommittees

9. Examples are Limited

10. Characteristics of a
Successful Public Policy
Goal: Cost-Effective Point Source Offset Program
Efficient Effective
Equitable
Are participation
costs minimized?
Does it achieve
specified goal?
Is one group
favored/penalized more
than another?

11. Cost Reduction is Key
“Reducing the cost of compliance is the most
compelling reason for pursuing trades.”
(WEF 2015)
 Nitrogen TMDL driven
 79 WWTFs
 Credit prices set annually ($1.65 - $4.50)
 $45.9 million (2002-2009)
total value of credits bought & sold
 CTDEP estimates POTWs have saved
between $300 and $400 million
Long Island Sound

12. MO Nutrient Trading Workgroup
Program Factors

13. MINT Simulation Approach
 Evaluate PS-NPS and
PS-PS trading feasibility
in 2 Missouri basins
 How do program factors
interact to affect
 Potential supply
 Potential demand
 Overall costs
 Identify important
principles for a MO
WQT program

14. MINT Simulation Results
$24
$56
$73
$76
24
20
7
4
0
2
4
6
8
10
12
14
16
18
20
22
24
26
$20
$30
$40
$50
$60
$70
$80
NUMBEROFFACILITIESTRADING
TOTALANNUALWATERSHEDABATEMENTCOST,
INMILLIONS
-------> TRADING RESTRICTIONS INCREASE ------->
PHOSPHORUS TRADING IN THE SPRING RIVER BASIN

15. Program Must be Flexible
 Program flexibility will be key to developing a successful
trading program
 Project report includes proposed framework for Missouri
based on this principle
“A key consideration must be avoiding overly
restrictive requirements that limit the ability
of the trading framework to generate and/or
purchase credits.”
(WEF 2015)

16. Point to Point Source Trading
Opportunities are Important
 Approximately 85% of PS
loading from 20% of
POTWs
 May be more efficient in
some circumstances
 Simplifies program
development and
implementation
 Greater potential for trading
additional parameters

17. Neuse River Compliance
Association
 Nitrogen TMDL driven
 19 members in bubble permit
 Voluntary participation
 Individual NPDES limit is waived
 Informal trading between partners
 Offset payments ($11/lb) ecological
enhancement program
 No violations to date/never used
 Internal enforcement policy
 Fines (80% escrow)
 Funds monitoring and capital improvement
grants
 Flexibility – free to choose control
strategies

18. Big River Trading
 Big River Trading Drivers May be Different than Small
Streams
 Gulf of Mexico May be the Driver
 Flexibilities to Address Downstream Impacts

19. Trading is One Tool
in the Toolbox
 Adaptive Management
 Longer Implementation
Periods
 Flexible Permit Limit or
Criteria Expression
 Watershed-Based
Permitting
 Integrated Planning

20. Thank You
David Carani
Geosyntec Consultants
108 E. Green Meadows Rd., Suite 9
Columbia, Missouri 65203
Phone: 573.443.4100
dcarani@geosyntec.com