May 28, 2019

Can Nutrient Assimilation Trading Reduce Conowingo Dam Chaos in the Chesapeake Bay?

Patricia A. Britton

Algae is a key component in natural aquatic systems and a normally gentle member of the underwater community. However, excess nutrients that flow into major water bodies stimulate aggressive algal growth causing algae to morph into harmful algal blooms (HABs), which block natural light, reduce oxygen, and suffocate aquatic plants and animals. Severely oxygen-deprived waters transform into dead zones, devoid of living creatures. In the Chesapeake Bay, oxygen-deprived waters deplete wild oyster populations, game fish, Maryland’s famous blue crab, and other species. Chesapeake Bay Program, Learn the Issues––Nutrients,, (accessed Jan. 19, 2019). On average, the Chesapeake Bay dead zones measure 1.74 cubic miles (last 30 years). In the summer of 2018, 25 percent of the Bay volume was oxygen impaired. Chesapeake Bay Program, State of the Chesapeake––The Dead Zone (accessed Jan. 19, 2019).

The Chesapeake Bay

The Chesapeake Bay is the largest natural estuary in the United States with nine major watersheds that flow into it from six states––New York, Pennsylvania, Virginia, West Virginia, Delaware, Maryland (Bay States), and the District of Columbia. The Clean Water Act (CWA) established the objectives of “restoration and maintenance of the chemical, physical and biological integrity of the country’s water.” 33 U.S.C. § 12151(a). Nutrient water quality attainment standards for the Bay include dissolved oxygen, water clarity, and chlorophyll a. EPA, Ambient Water Quality Criteria for Dissolved Oxygen, Water Clarity and Chlorophyll a for the Chesapeake Bay and Its Tidal Tributaries, 2015 Technical Addendum, (accessed Jan. 20, 2019). Only 42 percent of the water in the combined Chesapeake watershed met water quality standards in the 2015 to 2017 time frame. Chesapeake Progress, Clean Water––Progress, (accessed Jan. 30, 2019).

In 2010, the U.S. Environmental Protection Agency (EPA) established nutrient and sediment reduction plans built on Total Maximum Daily Loads (TMDLs)––standards carefully constructed with advanced modeling tools to allocate pollution load to various point source and nonpoint sources. EPA, Chesapeake Bay Midpoint Assessment Progress Tracking, (accessed Jan. 30, 2019). The Bay States and the District of Columbia (Bay Partners) built Watershed Implementation Plans (WIPs) to reduce nutrient loads in each minor watershed in line with allocated TMDLs. In 2014, the EPA and the Bay Partners signed an agreement incorporating the WIPs and TMDLs into a blueprint for action (the Chesapeake Blueprint). The Chesapeake Blueprint set watershed limits for total reductions of 25 percent in nitrogen, 24 percent in phosphorus, and 20 percent in sediment as compared to 2009. All established WIP pollution control measures were to be in place by 2025 with 60 percent in place by 2017. EPA, Chesapeake Bay TMDL Fact Sheet, (accessed Jan. 18, 2019). Thanks to cooperation and aggressive enforcement of the Chesapeake Blueprint, health is returning to the Chesapeake Bay with endemic dead zones receding, underwater grasses expanding, and water quality improving. Jonathon S. Lefcheck et al.,  Long-Term Nutrient Reductions Lead to the Unprecedented Recovery of a Temperate Coastal Region, 115 PNAS 3658  (2018),; see also Chesapeake Progress, 2017 and 2025 Watershed Implementation Plans (WIPs), At the 2017 midpoint, the Bay Partners met interim goals for phosphorus and sediment reductions but failed to achieve the nitrogen reduction goal due significantly to water flowing over the Conowingo Dam. EPA, Chesapeake Bay TMDL Midpoint Assessment, (accessed Jan. 30, 2019).

The Conowingo Dam

In 2018, record breaking rainfalls swelled nitrogen-laden waters flowing over the Conowingo Dam from the Susquehanna River near the border between Maryland and Pennsylvania. As a result, the Chesapeake Bay’s health “report card” grade decreased to D+ due to increased nitrogen. Chesapeake Bay Foundation, State of the Bay 2018, (accessed Jan. 19, 2019).

The Conowingo Dam nutrient overflow highlights the need for greater flexibility to restore water quality. Built in 1928, the hydroelectric dam was once hailed as a brilliant engineering achievement producing electricity while trapping sediment and nutrients from the Susquehanna. However, bitter controversy erupted with the 2018 overflows. The storm surges created strong river flow scooping up sediment and sending it over the dam and into the Bay. Waterkeepers Chesapeake, Conowingo Dam: Issues Facing Conowingo Dam, (accessed Jan. 19, 2019).

In April of 2018, the State of Maryland refused to relicense the dam until its owner, Exelon Energy, agreed to reduce nutrient pollution and sediment, and enhance fish migration. Exelon challenged the refusal noting that it didn’t generate the pollution from upstream dischargers, nor did it cause the record rains. Exelon, Exelon Generation Statement on Conowingo Request for Reconsideration Filing (May 25, 2018), (accessed Jan. 19, 2019). Meanwhile, Maryland asserted that its certification demand represented a “comprehensive regional approach” to achieve a beneficial stakeholder solution. Press Release, Maryland Dept. of the Environ., Hogan Administration Issues Comprehensive Environmental Plan for Conowingo Dam, Susquehanna River, Chesapeake Bay  (Apr. 27, 2018),, (accessed Jan. 19, 2019).

Nutrient Assimilation

Notwithstanding aggressive efforts, the TMDL modeling approach failed to achieve midpoint nitrogen goals due to unforeseen and intervening circumstances. Researchers found that TMDL restrictions had significantly reduced the nutrient load coming into the Conowingo Reservoir immediately behind the dam. However, unprecedented rainfall filled the reservoir at accelerated rates not anticipated in the original TMDL. Carl F. Cerco, Conowingo Reservoir Sedimentation and Chesapeake Bay: State of the Science, 45 J. Environ. Qual. 882–86 (2016), This is a classic chaos theory problem involving a complex system “whose behavior is highly sensitive to slight changes in conditions, so that small alternations can give rise to strikingly great consequences.”  Chaos Theory, Oxford Living Dictionaries, theory/. Professor Yorke, developer of the theory, explained that “when you deal with very complicated situations, unexpected things are going to happen . . . You have to expect things to fail, and you’ve got to be ready to change.” Gwynne Watkins, What Does a Real Chaos Theorist Think of Jurassic Park?, (June 16, 2015),

TMDL focus on prevention, modeling, and predictions cannot anticipate and prevent every negative outcome. The author suggests that now is the time to remove pollutants that do flow into seriously impaired waterways while continuing to aggressively pursue the TMDL regime to restrict nutrient flows. Professors Kurt Stephenson and Leonard Shabman advocate market-based use of nutrient assimilation credits to incentivize removal of nutrient pollutants in open water  Kurt Stephenson & Leonard Shabman, The Use of Nutrient Assimilation Services in Performance-Based Water Quality Incentive Programs, Presented at the Southern Agricultural Economics Association Annual Meetings, Orlando, Fla. (2013), (accessed Jan. 19, 2019).

Assimilation credits consist of “technologies and processes that can increase the nutrient assimilative capacity of the ambient environment” by creating nutrient sinks. Stephenson and Shabman believe that water quality improvements can be achieved in addition to and beyond the improvements caused by source load reductions. To date, Chesapeake Bay Water Quality Implementation Teams have approved nutrient reduction effectiveness for the biological methods of oyster farming and for the Algal Turf Scrubber that removes algae with its ingested nutrients. Immediate use of these and other assimilation processes could directly remove nutrients from waters impacting the Conowingo Dam and the Chesapeake Bay.

The author further recommends prioritizing clean up to areas closest to (a) dead zones and (b) nutrient impaired areas with disparate impacts on economically vulnerable communities. Trading could occur across the Chesapeake Watershed, but credits would be weighted and optimized by proximity to predefined water zones. Purchasers of assimilation credits could be (a) facilities such as the Conowingo Dam owners and stakeholders, (b) point source dischargers who have otherwise qualified to trade nutrient credits in their jurisdiction, and (c) nongovernmental organizations and donors. The assimilation credit trading program would be a true market-based program and would be entirely separate from nutrient trading credit plans currently in existence. Leonard Shabman & Kurt Stephenson, Achieving Nutrient Water Quality Goals: Bringing Market-Like Principles to Water Quality Management, 45 J. Am.  Water Resources Ass’n 1–14 (Aug. 2007).

The EPA and the Chesapeake Blueprint specifically support market mechanisms.  Cy Jones et al., How Nutrient Trading Could Help Restore the Chesapeake Bay (World Resources Inst., Working Paper, Washington D.C., 2010). Conceptually, a well-designed trading system should accelerate nutrient load reductions. Id. Current nutrient trading programs rely on TMDL offsets with disappointing results, including far fewer trades than anticipated. Dennis M King & Peter Kuch, Will Nutrient Credit Trading Ever Work? An Assessment of Supply and Demand Problems and Institutional Obstacles, 33 ELR 10362 (2003); see also Victor B. Flatt, C(r)ap and Trade: The Brave New World of Non-Point Source Nutrient Trading and Using Lessons from Greenhouse Gas Markets to Make it Work, 52 Houston L. Rev. 301 (2014), Unlike current systems, the proposed nutrient assimilation credit trading would trade credits for nutrients directly removed from the watershed in a highly market driven trading system similar to the acid rain trading program. The credits would not offset TMDL obligations.


Time is running out. The adoption of a separate, watershed-wide trading program for trading reduction of nutrients in open water could bolster and accelerate achievement of the Chesapeake Bay TMDLs by year 2025, without impairing current efforts to prevent and limit discharges into the Chesapeake Bay Watershed. 

Patricia A. Britton

Published: May 28, 2019

Patricia “Trish” Britton is a principle in S34Y, a consulting company that advises technology innovators. She is a retired Vice President Law and Government Affairs, Kennecott Energy Company. Upon retirement, she earned an MBA and researched and taught at the Bill Greehey School of Business at St. Mary’s University focusing on sustainable development and community issues.