Equity in Agricultural Water Quality Monitoring (EAWQM)

Period of Performance: 01/01/2014 - 12/31/2014


Phase 1 SBIR

Recipient Firm

Bloomfield Hills, MI 48301
Principal Investigator, Firm POC


Problem. The farming industry is a significant contributor of nutrients to the nation & #39;s waterways yet, as a non-point source, remains unregulated by the USEPA. Excessive nitrogen has created hypoxic zones in water bodies such as the Gulf of Mexico, which receives drainage from 41 percent of the continental United States. Nutrient point sources such as POTWs will require costly expansions of concrete and steel facilities to meet lower effluent limits aimed at reducing nutrient loads. The State of Illinois Environmental Protection Agency (IEPA) will be implementing more stringent effluent limits for nutrients by the close of 2015.Opportunity. Nutrient trading has merit with the USEPA, scientists and regulators and is quickly gaining momentum as an innovative, viable and cost-effective solution to improving water quality. The USEPA promotes innovation and has developed a framework for agricultural water quality trading under the Clean Water Act. Mary Ann Rozum, National Program Leader for the SBIR Air, Water and Soils research topics, is one of many agricultural and water quality leaders who provided valuable input and assistance in developing the guide Getting Paid for Stewardship: An Agricultural Community Water Quality Trading Guide.Objectives. There are 8 objectives for viable water quality trading: 1) Assess the potential for water quality trading; 2) Determine what a producer can trade; 3) Determine how much a producer can trade; 4) Determine when a producer can trade; 5) Find a trading partner; 6) Develop trade agreements and address liability; 7) Verify and certify conservation practice and implementation; and 8) Track and report pollution reductions and trades. Our research addresses the 8 elements through our innovative use of technology, data management and our interactive financial pro forma. Our current research builds treatment cells, measures nitrogen reductions and reduces trading risks, thereby bringing farmers and POTWs to the trading table.Description of the Effort. Aqua Vitae is developing its proof of concept for EAWQM and has begun setting up the infrastructure to build treatment cells and successfully verify nitrogen load reductions. Our study site in Minooka, Illinois has been strategically chosen because of its proximity to seven large watersheds; making it a very viable location for nutrient trading with POTWs located within Chicagoland (the City of Chicago and its collar counties), the southeast corner of Wisconsin, and the northwest corner of Indiana - some of the largest populations and POTWs in the U.S. We have prepared a financial pro forma that calculates the trading value with many of the local POTWs by considering over 20 critical variables that allow traders to evaluate the feasibility of marketable exchange. Our research will field measure nitrogen load reductions to calibrate our pro forma as well as verify and ensure the integrity of the process, thereby reducing the risks for traders and meeting the requirements of regulators.Commercialization Potential. It is fully expected that, as soon as Illinois regulates its lower effluent limits in 2015, adjacent states will follow suit. Once the regulation is established, EAWQM will be well positioned with the infrastructure and a financial pro forma that will be calibrated using Phase 1 research to facilitate trading discussions that can lead to immediate contract negotiations and implementation of nutrient trading. EAWQM will be poised to expand into a regional and even statewide mechanism for water quality trading and quantitative nutrient reduction.