United States
Environmental Protection
Agency
Office Of Water
(WH-553)
EPA841-F-93-010
September 1993
Number 10
oEPA TMDL CASE STUDY
Tar-Pamlico Basin, North
Carolina
Key Feature:
Project Name:
Location:
Scope/Size:
Land Type:
Type of Activity:
Pollutant:
TMDL Development:
Data Sources:
Data Mechanisms:
Monitoring Plan:
Control Measures:
A trading program between
municipal dischargers and agriculture
as an innovative, cost-effective tool
to meet nutrient reduction goals
Tar-Pamlico Nutrient Trading
Program
USEPA Region IV/North Carolina
Watershed area 11,650 km2
Piedmont and Coastal Plain
Agriculture, urban
Nitrogen, phosphorus
No
State
Hydrodynamic estuarine model,
Generalized Watershed Loading
Functions (GWLF)
Yes
WWTP operational improvements,
agricultural BMPs
Tcr-Pamlico Basin
FIGURE 1. The Tar-Pamlico basin in North Carolina
Summary: In recent years, low dissolved oxygen levels, sporadic fish kills, loss of submerged vegetation and other
water quality problems have plagued North Carolina's Tar-Pamlico basin. Studies have linked many of these problems to
increased nitrogen and phosphorus loading to the system. In 1989, the North Carolina Environmental Management
Commission (EMC) designated the Tar-Pamlico basin as a Nutrient Sensitive Water. The classification, based on years of
detailed nutrient loading studies, required the development and implementation of a strategy to manage both point and
nonpomt nutrient sources to meet water quality goals.
The North Carolina Division of Environmental Management (NCDEM) responded by developing stricter nitrogen and
phosphorus effluent standards for dischargers in the basin. However, dischargers were concerned about the high capital
costs that might be required to achieve the nutrient reduction goals. Consequently, a coalition of dischargers working in
cooperation with the Environmental Defense Fund, the Pamlico-Tar River Foundation/and NCDEM, proposed a nutrient
trading framework through which dischargers can pay for the development and implementation of agricultural best
management practices (BMPs) to achieve all or part of the total nutrient reduction goals. The EMC approved the program
in December 1989, and the implementation phase (Phase 1) is currently under way. As a condition of EMC's approval
the d.scharger coalition agreed to fund the development of an estuarine model. The model will be used as a tool to '
evaluate specific nutrient reduction strategies for the basin. This information will then be used to revise effluent nutrient
standards for Phase 2 of the project. The nutrient trading program is proving to be a popular solution, largely because it
achieves the state's nutrient reduction goals and addresses nonpoint loadings while also Inducing the economic burden to
municipal dischargers.
Contact: David Harding, North Carolina Department of Environment, Health, and Natural Resources, Division of
Environmental Management, PO Box 29535, Raleigh, NC 27626-0535, phone (919) 733-5083
Recycled/Recyclable
Printed on paper that contains
at least 50% recycled fiber
-------
BACKGROUND
Tlie Resource
North Carolina's Tar-Pamlico basin encompasses 11,650
km3 and portions of 17 counties. Its waters are a highly
valued natural resource that supports commercial and
recreational fisheries, recreational boating, swimming,
and many other beneficial uses. The basin also serves as
the primary source of drinking water for eight cities and
towns in central and eastern North Carolina, including
Rocky Mount and Greenville (NCDEM, 1987).
The Tar River constitutes the upper portion of the basin,
flowing for roughly 140 miles through the North
Carolina piedmont and across the coastal plain (Figure
2). The Tar gradually widens to form the Pamlico River
just east of Washington, North Carolina. The Pamlico
River becomes the Pamlico Estuary and flows
approximately 35 miles before entering Pamlico Sound
on the North Carolina coast. The Sound is protected by
an extensive barrier island system with only a few small
inkts connecting to the Atlantic Ocean (NCDEM, 1989).
Agriculture and forest are the dominant land uses in the
Tar-Pamlico basin. While forest in the upper half of the
basin is largely undisturbed, a large portion in the lower
coastal plain is managed for logging. Thirty-seven
percent of the basin is devoted to agriculture, which is
predominantly row crop cultivation and intensive
livestock operations. Five of the state's 10 leading hog-
producing counties, as well as the leading chicken-
producing county, are in the basin (Harding, 1990). As
of 1989, there were approximately 875 hog, chicken,
dairy, and turkey operations. Many of these have
expanded beyond their original capacities or are using
outdated waste management facilities. Table 1
summarizes population data for hogs, cows, and
chickens in the Tar-Pamlico basin.
Increasing fertilizer use, expanding livestock operations,
and a growing human population have been affecting the
waters of the Tar-Pamlico basin for more than three
decades, In recent years, the effects have included
diseased fish, sporadic fish kills, increased sediment and
nutrient loads, phytoplankton blooms, and low dissolved
oxygen (DO) levels. High nutrient loads have been
associated with dinoflagellate blooms in the estuary.
These blooms produce large amounts of organic carbon,
which can lead to oxygen depletion in bottom waters; in
fact, DO concentrations as low as 0.5 mg/L have been
recorded and associated with fish kills. The state's DO
standard for most of the basin is 5 mg/L. In 1986, 10
percent of all chlorophyll-a samples taken in the Pamlico
Estuary exceeded the state standard of 40 /xg/L (Steel,
1991). Losses of submerged aquatic vegetation have
also impaired the economically valuable commercial
fisheries in the Pamlico River Estuary (NCDEM, 1987).
Programmatic Issues
Declining water quality has sparked substantial concern
and activity on the part of the state government and
environmental organizations such as the Environmental
Defense Fund and the Pamlico-Tar River Foundation.
Several large research projects, including the Albemarle-
Pamlico Estuarine Study, have studied the effects of
nutrients, sediment, and toxic loads on waters in the
basin. North Carolina's 1992 305(b) report states that
. 59 percent of the stream miles in the Tar-Pamlico basin
are supporting their designated uses, 25 percent are
partially supporting, and 7 percent are not supporting.
The report identifies agricultural runoff as the major
source of impairment.
Blounfi Cr. South Cr.
Durham Cr.
I ltl»nd [--i
FIGURE 2. Schematic of the Tar-Pamlico Basin
-------
TABLE 1. 1990 Livestock Data for the Tar-Pamlico
Basin (NCDA, 1990)
Animal
Chickens
Hogs
Beef cattle
Milk cows
Total Number
3,937,240
295,725
14,479
1,838
Number/km2
350.2
26.3
1.28
0.167
Six waterbodies in the Tar-Pamlico basin are on the
state's 1992 303(d) list (R. Swanek, North Carolina
Division of Environmental Management, personal
communication, August 9, 1993). The state is currently
conducting several allocation studies that would qualify
as TMDLs under section 303 (d). Under North
Carolina's new basinwide planning process, each major
basin in the state comes up for review on a 5-year cycle.
North Carolina plans to match the development of
formal TMDLs with the basinwide planning cycle. The
final basinwide plan for the Tar-Pamlico is due in
August 1994. The nutrient load reductions and
allocation strategy on which the Tar-Pamlico Nutrient
Trading Program is based will probably be submitted as
a formal TMDL after the basin plan is complete.
ASSESSING AND CHARACTERIZING
THE PROBLEM
Nitrogen and phosphorus loading to the Tar and Pamlico
Rivers are the primary cause of degraded water quality
in the Pamlico River Estuary. Nitrogen and phosphorus
are critical nutrients for algal growth and, in sufficient
quantities, support algal blooms that consume DO as
they decay (NCDEM, 1989).
A nutrient source budget (i.e., an accounting of the
magnitude of all nutrient sources in the watershed) was
prepared for the Tar-Pamlico basin in 1986. However,
two major events that have a significant impact on
present and future phosphorus budgets have occurred
since the budget calculations. First, the North Carolina
General Assembly enacted a ban on the sale of
phosphate detergents. Then, a new NPDES permit was
issued to Texasgulf Industries, Inc., a phosphate mining
operation whose total phosphorus loads accounted for 50
percent of the phosphorus budget for the entire basin.
After revising the budget for expected changes due to the
phosphate ban and the Texasgulf permit, the North
Carolina Division of Environmental Management
(NCDEM) estimated that approximately 66 percent of
the total phosphorus in the basin comes from nonpoint
sources. Approximately 25 percent comes from
WWTPs, and the remaining 9 percent comes from
Texasgulf Industries, Inc. Eighty-three percent of the
total nitrogen in the basin comes from nonpoint sources,
primarily agricultural runoff and, to a lesser extent,
urban runoff and atmospheric deposition (NCDEM,
1989). Most researchers agree that nitrogen is the
limiting factor for plant growth in the estuarine portion
of the Tar-Pamlico basin (NCDEM, 1987). The revised
1988 nutrient budgets for the basin (after the phosphorus
ban and the Texasgulf permit implementation) are
summarized in Figure 3.
MANAGING POLLUTANT LOADS
The Initial Nutrient Control Strategy
In April 1989 North Carolina's Environmental
Management Commission designated the Tar-Pamlico
basin as a Nutrient Sensitive Water (NSW). Under
provisions of state law, this designation requires the
development and implementation of a management
strategy for both point and nonpoint nutrient sources.
The development of a comprehensive strategy for the
Tar-Pamlico was complicated because the phosphate ban
and the new Texasgulf permit were enacted after the
nutrient budgets had been calculated. NCDEM was
uncertain about how much these changes would improve
water quality; however, because of continuing
development, they could not afford to wait until all the
necessary information had been obtained through
research. Consequently, the state proposed an interim
strategy that required mandatory limits on nitrogen and
phosphorus for new and expanding dischargers in the
basin. The aim of the strategy was to halt point source
increases until a scientifically defensible nutrient
reduction plan could be designed and implemented. The
NSW strategy specified effluent concentration limits of 2
mg/L for total phosphorus throughout the year, 4 mg/L
for total nitrogen in the summer, and 8 mg/L for total
nitrogen in the winter.
Dischargers in the basin responded to the state's initial
strategy with concerns regarding the high costs of new
facility construction to meet the nutrient control goals.
The dischargers soon formed a coalition, the Tar-
Pamlico Basin Association, and began negotiations with
the state, the Environmental Defense Fund (NCEDF),
and the Pamlico-Tar River Foundation. In 1989, the
Association proposed a new strategy that allows for
"nutrient trading" between point source dischargers and
agricultural operations while meeting the overall nutrient
reduction goal.
An Alternative Allocation Strategy—Nutrient
Trading
Under the nutrient trading proposal, the Association
contributes funding for agricultural best management
practices (BMPs) in order to achieve all or part of the
total nutrient reduction goals established for the member
-------
facilities. The underlying premise is that nutrient
reductions via BMPs can sometimes be more cost-
effective (on a per kilogram removal basis) than capital
outlays for new treatment facilities. The Association
estimates that controlling one unit of nonpoint source
loads with BMPs costs one-tenth as much as controlling
the same load from a wastewater treatment plant (M.
Green, Tar-Pamlico Basin Association, personal
communication, July 30, 1993).
The nutrient trading proposal was approved by the North
Carolina Environmental Management Commission in
December 1989. The program sets up an overall
reduction goal and then allows nutrient sources to
find the most cost-effective way to allocate
allowable loads. Polluters have the flexibility to
trade reduction credits among themselves or to
pay to control pollution at other sources, such as
pig or chicken farms, as long as the total nutrient
limit for the basin is not exceeded (NCEDF,
1993).
multiplying by a factor of 3 for cropland BMPs and by a
factor of 2 for animal BMPs (NCDEM, 1992).
IMPLEMENTING THE NUTRIENT
TRADING PROGRAM
Phase 1
Implementation of the Nutrient Trading Program is being
divided into phases. Phase 1 of the program will last 5
Determining Initial Load Reductions
NCDEM projected the 1994 flow for all the
municipal Association members at 30.55 million
gallons per day (mgd). Assuming no nutrient
reductions from pre-strategy conditions, NCDEM
estimated that total nutrient loading in 1994
would reach 625,000 kg/yr. Under the original
NSW proposal, which required mandatory
phosphorus and nitrogen limits for point sources,
projected loadings for 1994 would decrease to an
estimated 425,000 kg/yr, a reduction of 200,000
kg/yr. Subsequently, NCDEM, the Association,
NCEDF, and the Pamlico-Tar River Foundation
together established 200,000 kg/yr as the
reduction goal for Phase 1 of the Nutrient
Trading Program. Of this, 180,000 kg/yr is for
nitrogen and 20,000 kg/yr is for phosphorus
(NCDEM, 1992). The program was a popular
solution because it fulfilled the state's NSW
reduction goals, addressed nonpoint source
concerns, and reduced the economic burden to
municipal dischargers.
Determining Control Costs
The estimated cost of achieving the 200,000
kg/yr nutrient reduction goal using agricultural
BMPs alone was $11.8 million—$10 million on
the ground and $1.8 million in administration
(Harding, 1990). These values were determined
by multiplying the reductions by a factor of $56
per kg per year, the estimated cost for removing
1 kg of nutrient per year using BMPs. The rate
was drawn from BMP funding experience in the
adjoining Chowan River basin. The calculation
of the cost factor included a margin of safety by
1988 Revised Phosphorus Budget
Tar-Pamlico Basin
WWTPs (25.2%)
Urban (3.5%)
Texasgulf Ind.
(9.1%)
Livestock 115.1%)
Cropland (21.7%)
Atm. Deposition
(5.5%)
Forestry (19.9%)
1988 Nitrogen Budget
Tar-Pamlico Basin
Urban (3.6%)
Forestry (21.4%) _-=^^^^~~^x. Atm. Deposition
(18.6%)
Livestock (9.5%)
WWTPs (14.9%)
Texasgulf Ind.
(2.0%)
Cropland (30.0%)
FIGURE 3. The 1988 nitrogen and phosphorus source budgets for the Tar-|
Pamlico Basin (NCDEM, 1989)
-------
years, during which time the trading approach will be
refined and evaluated. As part of Phase 1, NCDEM
requires that the Association meet the following
conditions to maintain the nutrient trading option:
• Develop an estuarine model
The Association is funding the development of an
estuarine model to assess the relative importance of
different nitrogen and phosphorus sources (i.e.,
wastewater dischargers, nonpoint, sediment, and
atmosphere) to algal growth and oxygen stress.
This three-dimensional model combines both
hydrodynamic and water quality components to
simulate DO depletion, algal growth, concentrations
of soluble and particulate nutrients, and several
other parameters of concern. Recommendations for
Phase 2 nutrient goals will be based on the results of
this model.
• Evaluate existing wastewater treatment plants
The Association hired a consultant to
comprehensively analyze the 12 participating
municipal plants and to determine the changes
needed to ensure that they are operating at the
highest level of efficiency. The municipalities will
implement the operational and minor capital
improvements recommended by the consultant,
attempting to achieve the original NSW effluent
goals of 2 mg/L total phosphorus, 4 mg/L total
nitrogen in summer, and 8 mg/L total nitrogen in
winter.
• Fund the design and administration of the Nutrient
Trading Program
The Association will provide $150,000 over a
2- year period to fund additional personnel in the
North Carolina Division of Soil and Water
Conservation (NCDSWC). These funds will be
used to design and establish the nutrient trading
system, including targeting and documenting BMP
implementation.
Ten of the 21 major municipal dischargers (design flow
>0.1 mgd) in the Tar-Pamlico basin have joined the
Association. Two smaller municipal dischargers are also
members. One industrial discharger is a member of the
Association; however, its membership includes an
exemption from weekly monitoring provisions.
Membership in the Association is voluntary, but if
dischargers choose not to participate in the nutrient
trading program they will be subject to the NSW
nitrogen and phosphorus limits as previously discussed.
The Association has obtained an EPA grant to fund the
development of a nutrient management decision support
system. The system will use geographic information
system (GIS) technology to track monitoring
information, poinl: source loads, and BMP
implementation data. The system will also incorporate a
watershed nutrient and sediment loading model based on
the Generalized Watershed Loading Functions (GWLF)
(Haith et al., 1992). The model will function as a tool
to assist in targeting subbasins for BMP implementation.
GWLF includes routines for calculating point source
loads, as well as dissolved- and solid-phase nonpoint
source loads from rural, urban, and septic sources (RTI,
1992).
Under the Tar-Pamlico Nutrient Trading Program,
dischargers are free to trade reduction debits and credits
among themselves, as long as the loading standards for
the basin are met, This allows Association members to
maximize the cost-effectiveness of their operations.
However, the state will continue to use individualized
permitting and enforcement to control any localized
impacts that may occur. Nutrient trading avoids the
inefficiencies and costs associated with prescribing
controls for each discharger.
The opportunity to develop and implement the Nutrient
Trading Program was made possible by the state's use of
the Basinwide Planning Process. Under Basinwide
Planning, a basin is viewed as the basic unit for water
quality management, allowing the State to evaluate and
address the primary causes of pollution hi a basin, as
opposed to consbintly traveling throughout the state to
"put out fires."
Funding BMP Implementation and Maintenance
The Association payments go to the North Carolina
Division of Soil and Water Conservation, which then
distributes the monies to the local soil and water
conservation districts. The conservation districts
distribute the ftmds to BMP projects via the North
Carolina Agricultural BMP Cost Share Program. At the
District level, a ranking process is used to allocate cost-
share funds to agricultural'operations according to the
severity of nutrient control problems. NCDEM has set
up a schedule for determining allowable nutrient loads
and payments during Phase 1 (Table 2). If the total
loads for the participating dischargers exceed the
allowable load for that year, the Association will pay an
amount equal to $56 times the excess loading (kg).
The results of the WWTP engineering evaluations
indicate that a majority of the required nutrient
reductions can be achieved through operational changes
and minor capital improvements. Consequently, the
actual level of BMP funding is likely to be substantially
less than $11.8 million, which was estimated assuming
all nutrient reductions would be achieved via BMPs.
To ensure the operation of the Nutrient Trading Program
and the availability of funds, the Association has agreed
-------
TABLE 2. Schedule of Nutrient Loads and Payments (NCDEM, 1992; P. Blount, City of Rocky Mount, North Carolina,
personal communication, August 10, 1993)
Calendar
Year
1991
1992
1993
1994
Allowable
Nutrient
Load (kg)
525,000
500,000
475,000
425,000
Actual
Nutrient
Load (kg)
455,685
422,962
n/a
n/a
Payment for
Exceeding
Allowable
Load ($)
0.00
0.00
n/a
n/a
Minimum
Payment*
($)
150,000
250,000
100,000
n/a
Report Results
March 1, 1992
March 1, 1993
March 1, 1994
March 1, 1995
Payment Due
September 30, 1992
September 30, 1993
September 30, 1994
September 30, 1995
' to ensure the operation of the Nutrient Trading Program
to make yearly minimum payments to the trading fund
(Table 2). These funds are in addition to the $150,000
administrative payments and will be used to fund BMP
implementation. For 1991 and 1992, the Association's
total loading was less than the maximum allowable load.
Consequently, the Association has paid the minimum
each year. When calculating loading payments for a
given year, the Association will receive credit for
minimum payments made in prior years. All BMP
credits will have a useful life of 10 years unless
otherwise specified.
Currently, NCDEM is conducting a pilot BMP project
on Chicod Creek, a coastal plain tributary to the Tar
River. Chicod Creek has been identified by the state as
severely impacted due to runoff from animal operations.
The purpose of the project is to quantify the
effectiveness of various animal waste management
BMPs. The project is funded by EPA appropriations
obtained through the efforts of the Association. The
results of this study will provide important information
on how BMP monies can be effectively targeted hi other
portions of the Coastal Plain.
Monitoring
Since July 1991, Association facilities have been
performing weekly effluent monitoring for total
phosphorus, total nitrogen, and flow. The Association
reports monitoring data to NCDEM annually. NCDEM
has developed a set of guidelines for estimating flow and
concentration if this information is not provided.
Phase 2
Phase 2 of the Tar-Pamlico Nutrient Trading Program
will be initiated in January 1995. At that time, the
estuarine model will be complete and will be used to
determine nutrient reduction goals for the whole basin.
Essentially, Phase 2 will refine the simple loading
calculations that were conducted to set goals for the
initial phase of the project. Details of this phase will be
determined primarily by the success of Phase 1 and the
results of the estuarine model.
NCEDF has proposed wetlands restoration as a key
strategy in Phase 2 of the program; however, details
regarding implementation of this strategy have not yet
been defined. Over the past 30 years, an estimated 50
percent of the Pamlico's wetlands have been destroyed.
Wetlands control excessive nutrients by trapping
pollutant-laden sediment, blocking erosion, lowering
flood peaks, trapping nutrients in vegetation, and
burying nutrients in soil. On Chicod Creek, in addition
to NCDEM's efforts, NCEDF is developing high-
resolution maps to pinpoint degraded wetlands and areas
of major nonpoint source pollution. This information
will be used to set priorities for restoring former
wetlands based on their potential for reducing pollution
(NCEDF, 1993).
CONSIDERATIONS
The Tar-Pamlico Nutrient Trading Program has largely
been the subject of praise from the state, dischargers,
and environmental groups. By addressing nonpoint
sources, the state and environmental groups have gained
a reduction program that is more comprehensive than the
original NSW strategy. Dischargers are benefitting from
the increased flexibility and cost-effectiveness of the
trading approach. However, Phase 2 will be met with a
number of challenges, including tracking compliance,
determining accountability, and making sure that load
reductions are actually achieved. The trading program is
designed so that once a discharger makes a trading
payment to the state for BMPs, its responsibility for that
share of pollutant reduction ends for that year. The $56
per kilogram per year trading factor is also a subject of
continued debate. The technical basis for the value is
poorly documented and must be further validated. In
addition, the plan does not include provisions for
escalating the factor due to inflation or other factors
(Woods, 1991). The Association has applied for a
USDA grant to study BMP effectiveness to address these
-------
challenges in Phase 2 (M. Green, Tar-Pamlico Basin
Association, personal communication, July 30, 1993).
REFERENCES
NCDA. 1990. North Carolina 1990 agricultural
statistics. North Carolina Agricultural Statistics
Division, North Carolina Department of Agriculture.
NCDEM. 1987. Surface water quality concerns in the
Tar-Pamlico River basin. North Carolina Division of
Environmental Management. Report No. 87-04.
NCDEM. 1989. Tar-Pamlico River basin nutrient
sensitive waters designation and nutrient management
strategy. Water Quality Section, North Carolina
Division of Environmental Management.
NCDEM. 1992. Tar-Pamlico NSW implementation
strategy. North Carolina Division of Environmental
Management.
NCEDF. 1993. Wetland restoration, non-point
pollution are the focus as Tar-Pamlico Project enters
Phase II Planning. In NCEDF Alert, Summer 1993.
North Carolina Environmental Defense Fund.
Haith, D.A. R. Mandel, and R.S. Wu. 1992.
Generalized watershed loading Junctions—Version 2.0:
User's manual. Department of Agricultural and
Biological Engineering, Cornell University.
Harding, D. 1990. Tar-Pamlico nutrient sensitive
waters management strategy. NWQEP Notes. Number
44. National Water Quality Evaluation Project. North
Carolina Agricultural Extension Service.
RTL 1992. Tar-Pamlico River basin nutrient
management decision support system: Preliminary work
plan. Research Triangle Institute, Research Triangle
Park, NC.
Steel, J. 1990. Albemarle-Pamlico estuarine system—
technical analysis of status and trends. Report 90-01.
Albemarle-Pamlico Estuarine Study.
Woods, C. 1991. Analysis of the nutrient sensitive
waters management strategy in the Tar-Pamlico river
basin. Unpublished paper.
This case study was prepared by Research Triangle
Institute, Rese.«-ch Triangle Park, NC, in conjunction
with USEPA, Office of Office of Wetlands, Oceans, and
Watersheds, Watershed Management Section. To obtain
copies, contact: your EPA Regional 303(d)/TMDL
Coordinator.
-------
------- |