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

1. Delivering Mitigation Solutions for
Natural Resource Extraction Projects:
Insights from a Leading Practitioner
ARIES 2015
Environmental Considerations in Energy Production
September 22, 2015

2. Demand Drivers

3. Pennsylvania Marcellus Wetlands
Marcellus Wetlands: 449,000 acres

4. Pennsylvania Marcellus Streams

5. Ohio and West Virginia Utica
Wetlands and Streams

6. Project-Related Impacts: Pads, Plants, Pipes

7. Bats and White Nose Syndrome

8. A Regulatory-Enabled Business
8

9. 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
Recreation
Air 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
Act
Clean Air Act
Coastal Zone Management Act Endangered Species Act
Archeological 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

10. A Regulatory-Enabled Business
10
Ecological Restoration is an Industry

11. 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

12. 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

13. Upstream Midstream
Downstream /
Petchem
Mining
Utilities /
Industrial
Government /
Infrastructure
Customers
Impact
Requiring
Mitigation
 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
Mitigation
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

14. Value-Added Delivery
Land Acquisition
Ecological Offset
Supply
Impact 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
Benefits
And
Outcomes
Early understanding of
risk, liability and cost
Derisked land-based
solutions
Fixed future costs and
enabled liability transfer
Analysis process using
client operational plan
Solution
Approach
Proprietary GIS process
prequalifies offset
acreage and enables
land selection
Deliver a flexible, cost-
effective credit solution

15. 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

16. Proprietary land search system with multiple layers and extensive parcel data allows
RES 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
4
Intersect Prospect Layer and
Parcels to generate maps of
individual prospects
5
Use maps with landowner data to
contact landowners and secure
RES land position

17. 17

18. Legend
Upland Re-establishment: 11.43 Ac+/-
Wetland Re-establishment: 0.865 Ac+/-
Wetland Enhancement: 0.47 Ac+/-
Parcel Boundary
UPPER SUSQUEHANNA RIVER MITIGATION BANK PHASE I
RESOURCE DEVELOPMENT MAP
HARRISON VALLEY TOWNSHIP, POTTER COUNTY, PENNSYLVANIA
0 200 400100
Feet
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, PA
16.6 Acre Site Area / 1,942 linear feet – Stream Restoration / 1 acre – Wetland Restoration

19. Grave Creek – West Virginia
2,069 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

20. Robinson Fork Mitigation Bank Phase 1, Washington County, PA
533.29 acres Total Site on 40+ parcels / 150,168.27 linear feet – Stream Restoration / 53.65 acre – Wetland Restoration
20

21. Upper Susquehanna River Mitigation Bank Phase 2 – Potter County, PA
121.9 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
P O T T E R C O U N T YP O T T E R C O U N T Y
T I O G A C O U N T YT I O G A C O U N T Y
REACH 1
215 L.F.
REACH 4
1,260 L.F.
REACH 5
896 L.F.
REACH 6
121 L.F.
(POND)
REACH 7
772 L.F.
REACH 8
646 L.F.
REACH 9
129 L.F.
REACH 10
247 L.F.
REACH 11
94 L.F.
REACH 13
1,852 L.F.
REACH 15
310 L.F.
REACH 16
153 L.F.
REACH 2
455 L.F.
REACH 3
31 L.F.
REACH 12
330 L.F.
FIGURE 5
UPPER SUSQUEHANNA RIVER MITIGATION BANK PHASE 2
PRELIMINARY DEVELOPMENT MAP
POTTER & TIOGA COUNTIES, PENNSYLVANIA
Figure5_USRMB_Phase2_PreliminaryDevelopmentMap_RES, Date: 3/11/2014
Aerial imagery from ESRI Online-2012.
County boundary from PA DOT.
Map coordinate system is NAD 83 PA North.
0 500250
Feet
Legend
Project Limits - 121.9 Acres +/-
Stream Re-establishment- 2,855 L.F.
Stream Rehabilitation- 1,448 L.F.
Stream Preservation- 3,205 L.F.
Wetland Rehabilitation - 4.05 Acres+/-
Wetland Re-establishment - 1.70 Acres+/-
Wetland Preservation - 0.25 Acres +/-
County Boundary
Excessive instability causing erosional
sloughing of the stream banks within the
central portion of the site.

22. Little Shenango River Restoration Site – Mercer County, PA
Total 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

23. South (Seeley) Creek Restoration Site – Bradford County, PA
90 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

24. website wetlands photo here
Resource Environmental Solutions, LLC
http://www.res.us
Baltimore Baton Rouge Charleston Houston Lafayette
Oak Hill Pittsburgh Raleigh Richmond
Russ Krauss, EVP Marketing & Research, russ@res.us