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An Evaluation of the Cost and Effectiveness of Commercial Oyster Aquaculture in the Chesapeake Bay as a Nutrient Control Strategy Alexander L. Miller Kurt Stephenson, Darrell Bosch, Daniel Kauffman, Bonnie Brown May 28, 2010. Nutrient Reduction Goals for the Bay.

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An Evaluation of the Cost and Effectiveness of Commercial Oyster Aquaculture in the Chesapeake Bay as a Nutrient Control StrategyAlexander L. MillerKurt Stephenson, Darrell Bosch, Daniel Kauffman, Bonnie BrownMay 28, 2010

nutrient reduction goals for the bay
Nutrient Reduction Goals for the Bay

Source: http://www.bayjournal.com/article.cfm?article=3691

achieving nutrient reduction goals
Achieving Nutrient Reduction Goals
  • Current Focus is on Source Reductions
    • Point Sources (PS) and Nonpoint Sources (NPS)
  • 3 Es - “This particular effort is going to involve everyone doing everything everywhere,”
          • -EPA’s Bay Program Office.
move beyond a source reduction strategy
Move Beyond a Source Reduction Strategy
  • Increase Ecosystem Nutrient Assimilative Capacity

Nutrient Assimilation is:

      • “The capacity of an ecosystem to reduce nutrients within the ambient water through biological processing, sequestration, and nutrient harvest”
oysters
Oysters
  • Natures Water Filters– Healthy oysters consume algae, each one filtering up to 5 liters of water per hour.
  • “It is the oyster\'s eating habits that make it so important to its environment: it is a voracious filter feeder that performs several vital functions in the Bay\'s ecosystem” – Chesapeake Bay Program
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Where does the N go?

(Nutrient Removal Function)

1

Air

N & P removed byharvesting bivalvebiomass

Water

Nitrogen (N)

Phosphorus (P)

Phytoplankton

Bivalves

2

Portion of total N converted to N2 gas thru denitrification

N in bivalve biodeposits

(feces & pseudofeces)

Nitrification &Denitrification Processes

Sediment

Source: Adapted from Newell

oyster aquaculture and nutrient assimilation
Oyster Aquaculture and Nutrient Assimilation
  • Native oyster restoration plagued by disease, habitat loss, and predation.
  • Existing aquaculture operations are providing nutrient removal services for free, but currently limited in scope.
  • Expansion of oyster aquaculture limited by finances. Prices in shucked market will not support expansion.

BottomLine: May not receive additional nutrient assimilative services from oyster aquaculture for free!

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Questions at Hand

-Is oyster aquaculture a cost effective means to remove nutrients?

-How does oyster aquaculture nutrient removal compare to source reduction technologies?

what is a nutrient assimilation credit and how will this help
What is a Nutrient Assimilation Credit and How will This Help?
  • Documented mass load (e.g. pounds) of nutrients removed from a water body.
  • Creation of demand for such credits creates incentives for additional revenue for oyster firms, past the sale of oyster ‘meat’
what is the cost of removing nutrients using oyster aquaculture
What is the cost of removing nutrients using oyster aquaculture?
  • Calculate what an oyster aquaculturists would need to charge for nutrient assimilation credits in order to meet a targeted rate of return on an investment.
  • Allows cost comparison with source reduction technologies.
oyster aquaculture firm

Oyster Seed

Growth RatesMortality (Disease)

Predation

Weather

Equipment

Labor

Oyster Meat

-Shucked

-Halfshell

Oyster Growing Site

Permitting

Insurance

Oyster Aquaculture Firm

Rate of Return(Revenues – Costs)

Costs

Revenues

Oyster ProductionSystem

Nutrient Assimilation Credits

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Oyster Aquaculture Production Function

-Number of Oysters Stocked or Transferred into Each Stage

-Mortality Rate

-Number of Months in Each Stage (Growth Rate)

-Number of Oysters to Market

slide16

Commercial Oyster Aquaculture Costs

Annual Administrative

and Permitting Costs

Capital Investment Costs

Annual Operational and Management Costs

slide17

1

lbs of N & P Removed byHarvesting Oysters

in t

3” Oyster

(gdw)

Percentage (%) of

N & P in Meat and Shell (g/gdw)

2

lbs of total N converted to N2 gas thru denitrification

in t

Biodeposition Rate

ºC and mg/l

(g/gdw/t)

Oyster

(gdw/t)

Biodeposit

Deposition

(g/t)

N in

Biodeposits

(g)

Denitrification

Removal

(%)

Nutrient Removal Function

oyster aquaculture firm1

Oyster Seed

Growth RatesMortality (Disease)

Predation

Weather

Equipment

Labor

Oyster Meat

-Shucked

-Halfshell

Oyster Growing Site

Permitting

Insurance

Oyster Aquaculture Firm

Rate of Return(Revenues – Costs)

Costs

Revenues

Oyster ProductionSystem

Nutrient Assimilation Credits

illustration two hypothetical but representative oyster aquaculture enterprises
Illustration: Two Hypothetical, But Representative Oyster Aquaculture Enterprises
  • IRR: 13.4%
  • IRR: 12%
similar analysis with different assumptions
Similar Analysis with Different Assumptions

Cage Assumptions: Denitrification: 20%

% to Halfshell Market: 90%

comparison of nutrient removal potentials
Comparison of Nutrient Removal Potentials
  • 1 M oysters sent to market: 377 to 1181 lbs of N removed (0% to 30% denitrification rates)
  • What would be needed to achieve equivalent reductions from nutrient sources:
    • Pounds removed from lowering 1 mgd of WWTP effluent from 8 mg/l to 4 mg/l of N
    • Treating ~200 Acres of Urban Stormwater Runoff
    • Adding BMPs to ~300 Acres of Pasture
    • Adding BMPs to ~70 Acres of Cropland
in summary
In Summary:
  • Oyster aquaculture is a potentially cost competitive water quality enhancement tool under some financial and environmental conditions.
  • Under a range of reasonable assumptions about oyster prices, mortality/growth, and input costs, new oyster aquaculture investments would be forthcoming for between $11.75 and $16.63 dollars per pound of N.
  • Ability to pay for water quality enhancement is currently limited given current policies, however, some options may exist.
slide27

Acknowledgements

  • National Fish and Wildlife Foundation
  • Oyster Growers
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