Delivering Mitigation Solutions for Natural Resource Extraction Projects: Insights from a Leading Practitioner

ARIES 2015Environmental Considerations in Energy Production

September 22, 2015

Demand Drivers

Pennsylvania Marcellus Wetlands

Marcellus Wetlands: 449,000 acres

Pennsylvania Marcellus Streams

Ohio and West Virginia Utica Wetlands and Streams

Project-Related Impacts: Pads, Plants, Pipes

Bats and White Nose Syndrome

A Regulatory-Enabled Business

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NEPA: National Environmental Policy Act

One Project, Many Federal Permits

Natural Gas Act Section 7 Resource Reports

Wetlands and Water Use Water Quality Vegetation Wildlife Fish Culture Land Use and

RecreationAir and Noise

Quality

Clean Water Act and

National Pollution Discharge Elimination System Program

Migratory Bird Treaty Act

Magnuson-Stevens Fishery

Conservation and Management Act

National Historic Preservation Act

National Parks and Recreation

ActClean Air Act

Coastal Zone Management Act Endangered Species ActArcheological and

Historic Preservation Act

   

Executive Order 11988 (Construction in Floodplains) National Wilderness Act   National

Wilderness Act  

Executive Order 11990 (Construction in Wetlands)            

Wild and Scenic Rivers Act   Wild and Scenic Rivers Act  

2010: 2.5 years permitting, $3.8MM for 4.667 acres of Habitat; $1.7MM Threatened Species

2013: Vacated judgment, post-project Enforcement

Permitting a FERC Regulated Project

A Regulatory-Enabled Business

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Ecological Restoration is an Industry

About RES

• RES is the premier provider of ecological offset solutions in the US

• Founded 2007 in Baton Rouge• Operations in 9 states across the

Appalachian, Mid-Atlantic, Southeast and Gulf Coast regions

• 110 mitigation sites permitted/in process

• Conservation easements protecting over 425 sites

• 32,000 restored wetland acres• 4,000 acres of custom mitigation

solutions• 155 miles of stream restoration• Reduced over 240 tons of nutrients• Rehabilitated and preserved over

3,700 acres of endangered species habitats

• 100 Energy industry clients

Mission

RES develops and supplies ecological offsets to help companies obtain required permits for unavoidable project-related impacts to wetlands, streams and habitats.

We help clients proactively manage risk from operations in environmentally sensitive areas by providing proactive project impact analyses, streamlining permitting processes, and limiting liability and regulatory exposure.

MissionOverview

Nurseries Enhance Mitigation Offerings• Significant cost savings over

purchasing vegetation from third parties

• Location in Somerset Township, Pennsylvania and Terrebonne Parish, Louisiana

• Allows RES to plant more mature trees and to achieve success criteria more consistently and quickly

• Over 2 million restoration stems grown, supplied and planted

• DNA-fingerprinted species grown and propagated to fulfill regulatory agency needs

• Leading supplier for successful coastal restoration projects including dune, marsh, estuarine, emergent marsh, and barrier island restoration

Upstream Midstream Downstream / Petchem Mining Utilities /

IndustrialGovernment /Infrastructure

Customers

Impact Requiring Mitigatio

n

Pads Roads Water pits Central

production facilities

Stream crossings

Wetlands impacts along corridor

Export facility Supply

pipelines Related surface

facilities Refining /

Petchem

Strip mining Longwall

mining

Manufacturing plants

Power lines Surface

impacts

Roads Rail lines Bridge

crossings In Lieu Fee

programs

Typical Mitigatio

n Solution

Bank credits Mitigation bank credits

Permittee-responsible mitigation

Mitigation bank credits

Permittee-responsible mitigation

Mitigation bank credits

Permittee-responsible mitigation

Bank credits Permittee-

responsible mitigation

Bank credits Permittee-

responsible mitigation

Permittees

Value-Added Delivery

Land Acquisition Ecological Offset SupplyImpact AnalysisExecution

Phases

Key Initiatives

Quantify Scope and Magnitude of Risk

from Project Impacts

Land sourcing by dedicated, In-house

resources

Improve timing, availability, and delivery of offset

BenefitsAnd

Outcomes

Early understanding of risk, liability and

costDerisked land-based

solutionsFixed future costs

and enabled liability transfer

Analysis process using client

operational planSolution

Approach

Proprietary GIS process prequalifies offset acreage and

enables land selection

Deliver a flexible, cost-effective credit

solution

Predictive Impact Analysis

Add Surface Impacts

Conduct multi-

layered GIS analysis

Base Map Area of Interest

Leases and Fields

Allocate Impacts to Watersheds

Calculate Required Mitigation

Credits

Add Project-based

Timetables

• Provides estimated scope and magnitude of impacts

• Provides early budgetary guidance

• Initiates the process of transferring liability from permittee to RES

• Helps RES to identify suitable restoration sites and habitats

Client map with multi-year drilling location plan

Proprietary land search system with multiple layers and extensive parcel data allowsRES to be efficient in regards to land sourcing

Proprietary Land Systems

1 Define HUCs of interest 2

Obtain and edit Parcel Data

by county for all watersheds

3

Generate “Prospect Layer” with available

GIS Data

4Intersect Prospect Layer and Parcels to generate maps of

individual prospects5

Use maps with landowner data to contact landowners

and secure RES land position

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Before

After

Prior to restoration this site consisted of cattle pasture with a degraded

stream running through it

The site has been restored to contain a fully functional and stable stream with

an adjacent bottomland hardwood riparian corridor

Upper Susquehanna River Mitigation Bank Phase I – Potter County, PA16.6 Acre Site Area / 1,942 linear feet – Stream Restoration / 1 acre – Wetland Restoration

Grave Creek – West Virginia2,069 linear feet – Stream Restoration / 9 acres – Adjacent Riparian Corridor

Post Construction One Year After

Stream constructed with erosion control mats in place. This site was a degraded cattle pasture in the central

valley of the watershed prior to restoration

The stream is now functional and stable and herbaceous vegetation has

begun to establish itself

Robinson Fork Mitigation Bank Phase 1, Washington County, PA533.29 acres Total Site on 40+ parcels / 150,168.27 linear feet – Stream Restoration / 53.65 acre – Wetland Restoration

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Upper Susquehanna River Mitigation Bank Phase 2 – Potter County, PA121.9 Acres Site Area / 7,508 linear feet – Stream Mitigation / 6 acres – Forested Wetland Restoration

Bank instability and undercutting along the stream bank due to channel

migration and a lack of riparian buffer.

Upper Susquehanna River Mitigation Bank Phase 2

Proposed Resource Development Map

Excessive instability causing erosional sloughing of the stream banks within

the central portion of the site.

Little Shenango River Restoration Site – Mercer County, PATotal site: 48.90 acres - 33.35 acres wetland mitigation

Little Shenango River Restoration Area

Resource Development Maps

Post construction photo of a re-establishment

wetland “cell” beginning to revegetate

South (Seeley) Creek Restoration Site – Bradford County, PA90 Total Site / 4,468 linear feet – Stream Enhancement / 15 acres – Forested Wetland Restoration

South Creek Restoration Site Resource Development Map

Pin oak tree planted at the South Creek Restoration Site

website wetlands photo here

Resource Environmental Solutions, LLChttp://www.res.us

Baltimore Baton Rouge Charleston Houston Lafayette Oak Hill Pittsburgh Raleigh Richmond

Russ Krauss, EVP Marketing & Research, russ@res.us