1. Nutrient Offsets in Virginia:
Update and Alternatives Analysis
Kurt Stephenson
Dept Ag & Applied Economics, Virginia Tech
Virginia Rural Water Association Conference
March 18, 2008
2. Virginia Nutrient Trading Design
and Sequencing
In general, the Virginia nutrient trading
program establishes a sequencing logic
that prioritizes compliance options to
achieve stringent mass load caps.
This applies to both existing and
new/expanding point sources.
3. Existing Point Source Compliance
1.Devise plan to meet wasteload
allocation (WLA)
2.If discharge > WLA, purchase credits
from another point source
3.If no PS credits available, secure
equivalent NPS credit by paying into
Virginia Water Quality Program.
4. New/Expanding Point Source
Compliance
1A) Meet limit of technology concentration
standard for N and P, and
1B) Acquire WLA to offset new discharge:
• Buy WLA from point source
• Acquire NPS credit from “best
management practices” at 2:1 rate
• If none above, “other means”
• If none above, payments into WQIF
5. Nonpoint Source Credit, Offsets
Nonpoint source credits are reductions in
nutrient load beyond a baseline.
Defined in statute as: “achieve reductions
beyond those already required by or
funded under federal and state law”
§62.1-44.19:15.B.1b
6. Nonpoint Source Offsets
New/expanding sources must
permanently offset new load
Any nonpoint source offsets must be
included within the point source’s
individual VPDES permit.
8. Alternatives Analysis
Ask the Question:
What are the activities and costs
of offset alternatives needed to
offset total nitrogen load from a 1
mgd WWTP expansion (or about
10,000 lbs/yr)?
(1 mgd operating at 3 to 3.5 mg/l TN)
9. Alternatives Analysis
Virginia trading program requires 2
pounds of reductions per 1 pound of
nonpoint source offset.
Thus, 20,000 pounds of TN reduction
needed for 10,000 pound offset
Assume no long term point source
WLA (offset) available
12. Agricultural BMP Baselines
Before any offset is granted, agricultural
sources must meet baseline (reductions
not available as offsets)
13. Agricultural BMP Baselines
1. Soil Conservation – implement soil
conservation plan to achieve specific soil loss
tolerance value
2. Nutrient Management – certify &
implement nutrient management plan
3.Cover Crops - Cover crops to meet the
required standard planting date
4. Riparian Buffer –maintain minimum 35 ft
vegetative buffer
5.Livestock Exclusion – fence out, alternative
watering, and minimum 35ft buffer
14. Ag BMPs available for Credit
1. Early Cover Crops – vegetative cover crops
by early planting dates.
2. 15% N Reduction on Corn – Nitrogen
application rates at 85% of recommended
rates in nutrient management plan
3.Continuous No-Till – implement and
maintain continuous no till for minimum 5 yrs
4. Land Conversion – converting agricultural
and to less nutrient intensive use
15. Example:
Ag offsets in Shenandoah
15% N Reduction +
Continuous No-Till
Total Nitrogen Reduced: 4.01 lbs/ac
Total Number of Acres: 4,988 acres
(20,000 lbs / 4.01 lbs/ac)
16. Example:
Ag offsets in Shenandoah
15% N Reduction + Continuous No-Till
Cost to Implement ???
Technical Feasibility:
• # producers at baseline thought to be small
• Only 77,000 acres of corn grown in the
entire S. Valley in 2006 (many counties less
than 5,000 acres).
17. Example:
Ag offsets in Shenandoah
Land Conversion: Crop to Forest
Total Nitrogen Reduced: 10.91 lbs/ac
Total Number of Acres: 1,833 acres
(20,000 lbs / 10.91 lbs/ac)
18. Example:
Ag offsets in Shenandoah
Land Conversion: Crop to Forest
Cost to Implement: $86/lbs TN annually
(land costs $10,000/ac, conversion costs
$867/ac, annualized 20 years @ 7%)
Technical Feasibility: Yes, if land available
19. N Offset Alternatives Summary
Offset Option Action Approved Cost/lb Feasible
15% less N + No-till 5,000 ac ? ?
Crop to forest conversion 1,833 ac $86/lb ?
23. 2. Septic Retirement
EPA has allowed nutrient offsets in other
areas of country for septic retirement
At 18/lb household, 1,111 existing
individual septic systems would need to
be connected to central sewer
Low ball cost: $30/lb*
* Assume connecting 300 home existing development, piping costs
only annualized over 20 years at 7%.
24. N Offset Alternatives Summary
Offset Option Action Approved Cost/lb Feasible
15% less N + No-till 5,000 ac ? ?
Crop to forest conversion 1,833 ac $86/lb ?
Wet ponds 400 ponds TBD $600/lb
Septic retirement 1,111 homes TBD Min $30/lb ?
25. 3. Nutrient Assimilation Credits
Enhancing the nutrient assimilative
capacity of the ecosystem to remove
nutrients from Bay system is another
way to remove nutrients beyond source
reduction.
27. Illustration: Nutrient Assimilation
Offsets from Oyster Aquaculture
“It is the oyster's eating habits that make it so
important to its environment: it is a voracious
filter feeder that performs several vital
functions in the Bay's ecosystem”
28. Example: Nutrient Assimilation
Offsets from Oyster Aquaculture
While wild restoration has been difficult,
oyster aquaculture can successfully grow
native Chesapeake Bay oysters. Expansion,
however, is limited by finances.
N and P removal from:
• Oyster harvest (biomass
harvest)
• Nutrient conversion of oyster
biodeposits (nitrification &
denitrifcation)
29. Example: Nutrient Assimilation
Offsets from Oyster Aquaculture
2006 Chesapeake Bay Targeted Watershed Grant
Project: “Nutrient Assimilation Credits:
Opportunities for Enhanced Oyster Production”
http://oyster.agecon.vt.edu/
Nutrient removal credits from
mussel aquaculture in Sweden
Nutrient removal projects
from oyster aquaculture in
Buzzards Bay MA, and
ribbed mussels in NY, NY
30. Example: Nutrient Assimilation
Offsets from Oyster Aquaculture
Previous research estimates between 700
and 5,500 lbs of TN removed annually per
1,000,000 oysters (3” oyster)
3.6 to 28.5 million oysters needed as an
offset
At current stocking densities, less than 100
acres leased private bottoms needed.
Cost/lb: ?
31. Example: Nutrient Assimilation
Offsets from Algal Harvest
Algal harvest facilities
rapidly grow algae in
order to remove nutrients
from ambient water or
from treated effluent
discharge.
Nutrients removed when
algae is harvested
32. Example: Nutrient Assimilation
Offsets from Algal Harvest
Algal Turf Scrubber (left)
N and P removal rates can be
directly quantified with high
levels of certainty
Projects underway in FL & NY
http://www.algalturfscrubber.com/
33. Example: Nutrient Assimilation
Offsets from Algal Harvest
Algal Turf Scrubber
Assume: 12 g dry weight m2/day & 3% TN (but
these are based on systems managed for P)
16 acre facility needed to produce 20,000 lbs of
TN of reduction
Cost/lb of TN? ($15-$25 per pound of P in FL)
34. Illustration: Nutrient Assimilation
Offsets from Wetland Restoration
“Forested riparian (or streamside) wetlands
remove about 80 percent of the phosphorus
and 90 percent of the nitrogen from water,
which act as water contaminants and may
result in unhealthy algae blooms.”
35. Example: Nutrient Assimilation
Offsets from Wetland Restoration
Invested in 1,300 acre wetland
restoration project to demonstrate
nutrient removal in IL.
WI claims restored wetlands can
remove 275 pounds of TN/ac/yr
73 acres wetland restoration needed
http://www.wetlands-initiative.org/NutrientFarming.html
36. N Offset Alternatives Summary
Offset Option Action Approved Cost/lb Feasible
15% less N + No-till 5,000 ac ? ?
Crop to forest conversion 1,833 ac $86/lb ?
Wet ponds 400 ponds TBD $600/lb
Septic retirement 1,111 homes TBD Min $30/lb ?
Oysters 3.5-28.5m oysters TBD ? ?
(< 100 acres)
Algal Harvest < 16 acres TBD ? ?
Wetland Restoration 73 acres ? TBD ? ?
37. Comments or
Questions?
Kurt Stephenson
Department of Ag & Applied Economics
Virginia Tech
Kurts@vt.edu
(540) 231-5381
