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Exploring Trading to Reduce Impacts of Acid Mine Drainage: Cheat River, West Virginia

Exploring Trading to Reduce Impacts of Acid Mine Drainage: Cheat River, West Virginia. Evan Hansen: Downstream Strategies, LLC Paul Ziemkiewicz, Jerry Fletcher, Todd Petty: W. Va. University Gordon Hester: EPRI Martin Christ, Rick Herd. The Cheat TMDL. Acid mine drainage: acidity and metals

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Exploring Trading to Reduce Impacts of Acid Mine Drainage: Cheat River, West Virginia

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  1. Exploring Trading to Reduce Impacts of Acid Mine Drainage:Cheat River, West Virginia Evan Hansen: Downstream Strategies, LLC Paul Ziemkiewicz, Jerry Fletcher, Todd Petty: W. Va. University Gordon Hester: EPRI Martin Christ, Rick Herd

  2. The Cheat TMDL • Acid mine drainage: acidity and metals • Abandoned and active coal mines • 55 segments of Cheat and tributaries on 303(d) list • TMDL finalized in 2001 • Few steps taken toward implementation

  3. Difficulties in implementing the Cheat TMDL • Point sources • Lack of agency experience writing coal NPDES permits with WQBELs • Nonpoint sources • Reductions often huge, difficult, expensive • Funding is scarce • No implementation plan

  4. A Cheat trading framework • Help implement the Cheat TMDL • Reproducible for: • acid mine drainage • other pollution problems due to orphan sites • Useful as West Virginia develops a trading program

  5. Goals and Objectives • Make TMDL implementation an effective, self-sustaining, locally-driven process • Develop an approach with: • clear watershed remediation objectives • funds for management and remediation projects • minimized friction among parties • focused effort on prioritized watershed remediation needs

  6. Remediating on a watershed basis Requires: • organization, • planning, and • management

  7. The Crux • Poor fit between remediation and regulatory strategies • Most investment toward fraction of the problem • Millions for construction, pennies for management • Need higher lever level of organization and management to coordinate the many funding and program opportunities • Management takes professionals and they cost money

  8. Regulation vs. remediation • The cost of removing a ton of acid load from acid mine drainage increases as the discharge is cleaned up: • ~90% of AMD comes from orphan sites • The TMDL requires tightening of NPDES discharge limits (and reductions as orphan sites) • May cost a permittee thousands of dollars to remove 1 ton of acid load • The same money spent on an orphan site may remove 50 tons

  9. Managing Investments in Watershed Improvement • Investments can be fit into a single watershed plan • Investments can be compared: • Environmental benefits: Tons of pollutant removed • Ecological benefits: Stream miles with recovered aquatic life • Trading can play a role

  10. Proposed def’n of ecounits WV Stream Condition Index (benthic macroinvertebrates, 0-100) X Stream segment area (length x width)

  11. How to calculate the cost of an ecounit? • Calculate how impaired the watershed is now (how many ecounits are recoverable) • Calculate cost to fully remediate AMD • Divide to get average cost of recovering an ecounit AVERAGE COST IS IMPORTANT

  12. Watershed Management Authority • Develop and implement the plan • Coordinate public remediation investments • Solicit and evaluate trades • Recommend trades to state regulatory agency • Build, operate, and maintain remediation projects • Manage trust fund and credit bank

  13. Funding the Process • Trust fund will accept cash paid for credits • Portion of trust fund available to develop and update the plan, pay staff, and for other professional services • Most spent on additional remediation to generate more credits

  14. How trading might work for the Cheat • Authority develops plan for TMDL implementation: remove about 11,000 tpy acid load from lower Cheat • Current public AMD remediation projects generate credits: • Friends of the Cheat • Army Corps • Clean Water Act 319

  15. The Albright Power Plant • Thermal pollution variance may not be renewed • Thermal pollution affects about one mile of the Cheat during low flow periods in late summer • Without variance, the utility must close the plant, install cooling towers, or negotiate a trade • Cost of cooling towers in multiple $10m

  16. First cross-pollutant trade? • In return for variance, utility would make payment • Amount based on: • Ensuring net ecological benefit (ecounits) • Trading ratio • Authority would use funds to remediate AMD and generate more credits

  17. Summary: Key aspects of Cheat trading program • Integrated into Watershed Management Authority • Watershed management plan guides investments • Trades are one of many types of investments • Cross-pollutant trades, with net ecological benefits and appropriate ratios • Credit bank, capitalized by public investments

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