Regulation comment time scheduled

Proposal allows entities to trade pollution credits

A proposed regulation allowing entities to trade nutrient pollution “credits” among one another will go back out for public comment, the state’s environmental rule-making body decided Friday.

The Northwest Arkansas Nutrient Trading Research and Advisory Group has made substantial changes to its original proposal in response to the first round of public comments and will accept comments for 30 days on the revision.

Nutrient trading allows for the exchange of nutrient limits between dischargers in the same watershed so that one entity that is well below its limits can trade with another entity that is above or concerned about going above its limits. The proposal requires that the trade results in a net reduction in nutrients within the watershed, which is the area around a body of water that drains into it.

To trade with a facility or landowner that does not have a permit with numerically specified limits, the parties must calculate the outcome of the trade and document the calculations. A permitted facility might pay a farmer to do something different on his land that would result in a nutrient reduction the facility could purchase, said Allan Gates, an attorney for the advisory groups.

Too many nutrients, such as nitrogen and phosphorus, can cause algae to grow in bodies of water and harm fish.

The Arkansas Pollution Control and Ecology Commission, which serves as the appellate and rule-making body for the Arkansas Department of Environmental Quality, passed the initiation of the second public comment period without objection Friday during the commission’s monthly meeting.

Commissioners Joe Fox, Lawrence Bengal, Bekki White and Bruce Holland

were absent.

During the meeting’s public comment period, an Arkansas Farm Bureau representative asked that the Arkansas Natural Resources Commission be included among agencies allowed to inspect nutrient trading with nonpoint sources. Nonpoint sources are sources of nutrients that do not directly discharge into a water body.

Language allowing that was included in the advisory group’s original proposal, said John Bailey, director of environmental and regulatory affairs for the Farm Bureau. It was stricken in response to comments, Bailey said, but it should be re-added because of the Natural Resources Commission’s experience and expertise at working with farmers who are considered nonpoint sources of nutrients.

Other commissioners questioned whether it was practical to have two agencies — both the Arkansas Department of Environmental Quality and the Natural Resources Commission — be charged with investigating trades.

Commissioner Doug Melton, a former longtime oil and gas employee, said that in his experience working with multiple agencies on the same thing is “not good for efficiency.” “We need to provide an efficient, clear way” for people to navigate the regulation, he said.

The Pollution Control and Ecology Commission’s administrative law judge, Charles Moulton, said administrative hearings could be complicated if both the Natural Resources Commission and the department investigate the same trade and report different findings.

Bailey said he did not disagree with Melton’s opinion on efficiency but said he believed his proposal was appropriate, given the Natural Resources Commission’s “expertise and individuals who do this on a daily basis.”

The commission did not take up Bailey’s proposal.

The Northwest Arkansas Nutrient Trading Research and Advisory Group represents four Northwest Arkansas cities — Bentonville, Fayetteville, Rogers and Springdale — and has received input from the Farm Bureau, the Illinois River Watershed Partnership and Beaver Water District.

Some of the cities face crackdowns on nutrients in the Illinois River watershed and have had their expired permits remain active through an administrative hold by the Arkansas Department of Environmental Quality.

Critics of the first draft said it was insufficient in detail and premature without numeric water quality standards to reference. Several individuals and groups questioned whether the Arkansas Department of Environmental Quality, with a reduced staff and no dedicated funding source for the trading program, could effectively implement and oversee the program.

In its second draft, the advisory group included language that allows the department to start a fee schedule to help pay for implementation of the regulation.

Many critics said they believed the trading scheme had theoretical potential to benefit the environment but argued that could not be achieved with the regulation as written.

The proposal would create Regulation 37 but would be Arkansas’ 33rd environmental regulation.

The new comment period starts when public notice is published.

“We need to provide an efficient, clear way” for people to navigate the regulation. Commissioner Doug Melton