Nutrient Trading Begins in PA's Chesapeake Bay Watershed

January 16, 2007
Client Alert Newsletter Forecast 2007

Approximately half of Pennsylvania falls within the Chesapeake Bay Watershed and is subject to the Chesapeake Bay Watershed Strategy, which aims to reduce nutrient discharges to the bay. Many existing wastewater treatment plants discharging to the watershed will need to reduce their nutrient discharges, and new developments planning discharges affecting nutrient loading in the watershed will need to acquire nutrient credits. The Pennsylvania Department of Environmental Protection's ("PADEP's") nutrient trading program and Chesapeake Bay Watershed Strategy were the subject of controversy and legislative hearings in 2005 and 2006, but now, after a series of stakeholder meetings and public input, have taken shape in PADEP's final Trading of Nutrient and Sediment Reduction Credits - Policy and Guidelines noticed in the Pennsylvania Bulletin on December 30, 2006. In addition, in November 2006 the first nutrient credit trade under the program occurred between MGKF client Daniel Maisano of Dunn Lake, LLC, who is developing The Preserve at Dunn Lake in Susquehanna County, and Red Barn Trading Company, which aggregates nutrient credits from agricultural clients. In February 2007, Red Barn announced its second nutrient credit sale. With a final trading policy and trades beginning to occur, we expect much greater activity in this area in 2007.