Minutes: Chesapeake Bay Watershed Water Quality Trading Forum Conference Call September 12, 2007 I. Welcome and Introductions Gleason ¦ Patricia Gleason, CBW Water Quality Trading Forum chair, welcomed everyone to the call and initiated introductions. ¦ Eileen McLellan, Environmental Defense, works with the Center for Conservation Incentives at the Environmental Defense. She is interested in all opportunities to support landowners in conservation practices and sees water quality trading as a good market to support the Environmental Defense's efforts. Eileen is talking to states about the water quality trading programs that they develop and is very interested in joining water quality trading markets with other ecosystem service markets, such as carbon sequestration. II. The Bay Bank and Ecosystem Marketplaces Madsen ¦ Becca Madsen is a Presidential Management Fellow with the US Forest Service. She works with James Remuzzi (Alliance for the Chesapeake Bay), Eric Sprague (Pinchot Institute), and Will Price (Pinchot Institute) to develop the concept of the Bay Bank. ¦ The Bay Bank is a concept under development to be a centralized marketplace for the Chesapeake Bay watershed. It will not be a competitor to other trading programs, but rather wants to centralize efforts in one place, reducing transaction costs. ¦ It was originally developed as an incentive for landowners who sign up for Forestry for the Bay, which is a collaborative program for promoting sustainable forestry to landowners to help restore water quality in the Bay. o The Bay Bank was developed to join landowners to the economic benefits of the ecosystem services their land provides. ¦ If a landowner wants to sell their ecosystem services, they... o Need to identify ecosystem services that their land provides, ex. species mitigation, o Need to determine which laws are in place to generate species mitigation credits, o A developer building in an area of endangered species habitat, the developer may buy the credits to mitigate his development, o The credits would have to verified and monitored to ensure they are viable. ¦ The aim of the Bay Bank is to develop a kind of eBay to trade ecosystem service credits while conserving land. ¦ The Bay Bank has applied for a Chesapeake Bay Trust Pioneer Grant to fund a year of framework development that will bring together group members to discuss the 5 different markets that appear to have the greatest potential (carbon sequestration, endangered species habitat mitigation, water quality trading, forest mitigation, wetland mitigation). o If funding is received, they will be looking for workgroup chairs and participants to focus on the individual trading markets. ¦ Pat Buckley encouraged that as the Bay Bank team engages state foresters in this effort, they also engage nutrient trading leads and others to ensure the Bay Bank is not solely developed in the context of forestry. ¦ Other activities include identifying state and federal regulation and program baselines to build credits off of. ¦ A Spatial Lands Registry is being developed to identify where there are sellers and buyers. Further into the future they hop to have a spatial ecosystem service calculations. ------- ¦ ACTION: Becca Madsen will send Eric Sprague's contact information as the Bay Bank contact person and a short Bay Bank backgrounder to the Forum. ¦ Pat Buckley expressed concern about how the Bay Bank will fit into Pennsylvania's and other states' nutrient trading programs. Becca offered to set up a conference call with PA and any other states who wish to participate to address this. III. Status of Blue Plains and Trading Gleason ¦ Blue Plains is operating efficiently, below its phosphorus limit. Ning Zhou calculated that they are 70-80,000 lbs under their permit limit. Pat called VA DEQ about the status of their compliance plans that were due August 1st under Virginia's watershed permits. She also spoke to a member of Virginia's Nutrient Credit Exchange and a Blue Plains representative. Alan Brockenbough, VADEQ, commented that at this time Blue Plains has not approached VA as a seller of the credits. ¦ Tanya Spano added that the compliance plans were submitted and it looks positive that the VA plans should collectively meet their cap allocations. DEQ is still sorting through the information and does not know they will be ready to share the information. It will likely be sorted by the end of September. o Conceptually there appears to be support for the notion of trading with Blue Plains. Tanya plans to discuss this trading possibility further based on the current limits and permits. ¦ Virginia confirmed that under VA law, Blue Plains could be a seller and would be happy to have the option to buy from Blue Plains if necessary. III. Updates from States on New Developments in Trading Programs Virginia ¦ Kyle Winter: VA DEQ received the first draft of the nonpoint source guidance from TetraTech and will be reviewing the guidance with DCR and provide comments to EPA next week. A stakeholder meeting will likely be scheduled to get input on the second draft and have a final product by the end of the year. o Urban stormwater guidance will be coming along in the future. Pennsylvania expressed interest in collaborating on that effort. ¦ Point source compliance plans have been reviewed. A public statement will be made in the future to address the plans. West Virginia ¦ Randy Sovic: WV through a grant with NRCS is working with the Water Research Institute to develop a framework for a trading program. They're moving down a path to develop a program for point and nonpoint source trading. ¦ Alyse: The Water Research Institute website (http://wvwri.nrcce.wvu.edu/) tracks their progress and meeting minutes. o The Water Research Institute and the Freshwater Institute received a grant to do a pilot project in the Rocky Run Marsh watershed. Maryland ------- ¦ Ed Stone: MD is working toward the point source trading draft. The EPA trading toolkit that came out in August was helpful in preparing the draft. MD hopes to have something available for a more detailed discussion soon. ¦ EPA's trading toolkit is available at http://www.epa.gov/waterqualitvtradingAV QTT oolkit.html. Pennsylvania ¦ Ann Smith: PENNVEST got a tentative approval from EPA to use clean water state revolving fund money to participate in the trading program. They're looking to see how they can work their financing structure into the trading program. o Contact Ann Smith at annsmith@state.pa.us for more information. States may wish to forward this information on to their state revolving fund coordinators. ¦ PA is developing a handbook for the different sectors on breaking down how to participate in the trading program, where to get information, what baselines must be met, etc. This handbook is expected to start this month. ICPRB ¦ Joe Hoffman: The commission met yesterday and trading is still on their plate. They're ready and able to work on it but are waiting on the individual member states to get their programs rolling to see where they may want ICPRB assistance. They're thinking about playing a monitoring or facilitating role, or some other role that provides value to the states. ¦ The Katoomba Group will have a meeting in 2008 in Washington, DC. Katoomba Group meetings focus on ecosystem markets and bring together industry, government, and other interested parties for a two-day conference. This year's meeting will be on water markets. A third day of the conference will focus on the Chesapeake Bay and market-based mechanisms to restore water quality. The agenda and keynote speakers are still in flux. o Ann Smith suggested that there may be points that could be taken away from last spring's EPA conference in Pittsburg and added into the agenda. IV. Wrap Up and Plans for a WQTF Meeting in the Fall ¦ There is a lot of relevant work going on by the Forest Service, NRCS, Environmental Defense, Chicago Climate Exchange, etc. that would be beneficial to continue learning about and discussing at a face-to-face meeting this fall. ¦ Joe Hoffman offered ICPRB's large conference room that we could utilize for a meeting. Tanya Spano offered the use of COG's conference room as a back-up. ¦ We will attempt to find a day that will work for everyone to meet. o ACTION: Forum members will send Sara Parr their availability for a meeting in October, November, or December. ¦ Pat Buckley suggested that Doug Parker would be a valuable part of this group so that we can collaborate with STAC's work on nutrient trading. ¦ Katharine Dowell suggested that if there will be a Forum meeting fairly soon, it might inform later development of the Katoomba effort. ------- Participants Patricia Gleason EPA Region III gleason.Datricia(a),eDa. gov Sara Parr CRC/CBPO sparr (a),chesapeakebav.net Ann Smith PA DEP annsmith@state.pa.us Tomlyne Malcolm COG tmalcolm@mwcog.org Joe Hoffman ICPRB j hoffman@icprb. org Randy Sovic WV DEP r sovi c@ wv. dep. org Steve Luckman MDE sluckman@mde. state, md. us Ed Stone MDE estone@mde. state, md. us Alan Brockenbough VADEQ abrockenbrough@deq.virginia.gov Kyle Winter VADEQ ki winter®,deq .Virginia, gov Marya Levelev MDE ml evel ev(a),mde. state. md. us Katharine Dowell EPA dowell. katharine(3),epa. gov Mindy Selman WRI mselman(a),wri. org Alyse Schrecongost WV WRI alvse schrecongostfo),hotmail.com Becca Madsen USFS romadsen@fs.fed.us Robert McAfee NRCS robert.mcafee@wdc.usda.gov John Kennedy VADEQ imkennedvfS),dea.virginia.gov Evan Branosky WRI ebranosky @wri. org Pat Buckley PA DEP DbucklevfS),state.oa.us Beth McGee CBF bmcgeefo),cbf.org Eileen McLellan Env Defense emclellanfo),environmentaldefense.org Tanya Spano COG tspanofa), mwcog.org ------- |