Senate EPW Hearing on Nutrient Trading and Water Quality

On May 22nd, the Senate Environment and Public Works Subcommittee on Water and Wildlife held a hearing entitled, “Nutrient Trading and Water Quality.” Members and witnesses who provided statements during the hearing included Senator Boozman (R-AR), Mike Shapiro (EPA’s Deputy Assistant Administrator for Water), Beth McGee (Chesapeake Bay Foundation), George Hawkins (General Manager for DC Water), Marty Matlock (Professor at the University of Arkansas), and Susan Bodine (Partner at Barnes & Thornburg LLP).

The statements and discussion mostly supported the development of nutrient trading markets as a means to achieve nutrient pollution reduction targets and improve water quality.  However, the main concern of agricultural producers and other potential “traders” is uncertainty surrounding the value and cost of the credit for farmers implementing best management practices (BMPs) and also for permit writers to accurately apply wastewater treatment plant credits in NPDES permits.  Mike Shapiro of EPA noted that the Agency’s role is to provide support for states that have the authority to implement clean water programs, but that developing an interstate program would be a challenge, especially to work between states.  EPA would also want to work with them to ensure that the trading program meets applicable TMDLs and is effective in meeting nutrient reduction goals.  Of note, Beth McGee of the Chesapeake Bay Foundation highlighted the need for more specific guidance from EPA (beyond its existing toolkit) regarding nonpoint source credits in nutrient trading programs.

Questions were raised about the amount of Federal involvement and oversight needed to:  ensure effective trading programs; create market rules with consistent baseline requirements to ensure consistency across multiple states when working together in one watershed (i.e., the Chesapeake Bay); fund ongoing programs to support trading (i.e., land grant colleges and the Conservation Effects Assessment Project (CEAP)); and provide flexibility for state verification programs.  Programmatic verification is needed for both spot checks on agricultural BMPs and to show water quality improvement at the watershed level.  CEAP is a multi-agency effort to quantify the environmental effects of conservation practices and programs and develop the science base for managing the agricultural landscape for environmental quality.