October 5, Pillsbury Winthrop Shaw Pittman LLP

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Ecosystem Services Concepts at Work: Overlapping Regimes of Endangered Species Act, Migratory Bird Act, National Environmental Policy Act and Natural Resource Damages Protections Pillsbury Winthrop Shaw Pittman LLP October 5, 2016

Endangered Species Act Endangered Species Act (1973), amended. Purpose: Protect and recover imperiled species and the ecosystems upon which they depends Approx. 2,200 species listed as threatened or endangered Endangered means the species is in danger of extinction throughout all of a significant portion of its range Threatened means the species is likely to become endangered within the foreseeable future Most, but not all, protect species are domestic ESA implements U.S. participation in the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES) 1 ESA & NRD

Endangered Species Act Implementing Agencies National Oceanic & Atmospheric Administration (NOAA) and United States Fish & Wildlife Service (FWS) work together to manage ESAlisted species NOAA has jurisdiction over 147 species FWS Executive Branch Office of the President Department of Interior Department of Commerce FWS NOAA 2 ESA & NRD

Endangered Species Act Implementing Tools Section 4 Listing of Species; Critical Habitat Designation; Recovery Section 6 Cooperation with States Federal encouragement of states and funding; some states more protective Section 7 Interagency Consultation E.g., critical habitat designation Section 8 International Cooperation Section 9 Prohibited Acts No take without a permit Section 10 Permits for Endangered Species & Habitat Conservation Plans Scientific research or to enhance propagation and survival For otherwise lawful activities causing an incidental take Section 11 Penalties and Enforcement Civil and criminal 3 ESA & NRD

Natural Resource Damages & Endangered Species Adverse impact of the release can be to the species or the habitat No special provisions for endangered species under NRD statutes 4 ESA & NRD

Key Questions in an NRD case involving endangered species 1. Who is the trustee for that resource? 2. How do you assess? 3. How do you restore/replace/acquire equivalent? 4. On the flipside: If endangered species were not impacted by the release, could offsite restoration impact an endangered species? National Environmental Policy Act regulations require Trustees to consider the degree to which the project may adversely affect endangered or threatened species or their critical habitat. 5 ESA & NRD

Fish Creek, Indiana How to deal with endangered species injury in an NRDA Know about your ecological neighborhood Importance of the use of biological currency The use of restoration-based compensation Unique Resources HEA vs Contingent Valuation Methodology Applied vs Theoretical Science Zoos, Labs, etc. The natural alliance with The Nature Conservancy

American Burying Beetle (ABB) Suitable beetle habitat ABB presence Vegetation and soil conditions Contiguous to other ABB habitat Within USFWS ABB Conservation Priority Area Adjacency to similar habitat Amenable to habitat management Willing seller

Selection Process Results Four candidate properties were identified: McAlister Site; Pittsburg County Beetle Ridge; Atoka County Owl Creek; Coal County Muddy Boggy; Hughes, Pontotoc and Coal Counties Pittsburg Site emerged as the best option Other sites were further from areas with high ABB trap rates or soil conditions were not as good However, no candidate site has been discredited

Rationale for selecting McAlister Site Within USFWS ABB Conservation Priority Area 1600 acres of suitable, contiguous habitat Significant ABB presence Corridor between site and McAlister Army Ammunition Plant Willing seller

FERC, National Environmental Protection Act (NEPA) and Migratory Bird Act Under the framework, mitigation measures (conservation measures) may fall into at least one of 5 categories. Each category manages the level of impact to birds from a specific project or activity differently, and attempts should be made to avoid and minimize to the maximum extent practicable before advancing to restoration or compensation options.

Migratory Bird Conservation and Mitigation Plan ( MBCMP ) Avoid the production of a stressor/impact to birds altogether by not taking a certain action; Minimize the exposure of birds and their resources to project-related stressors by limiting the degree or magnitude of the action and its implementation; Rectify the effects of an impact by repairing, rehabilitating, or restoring the affected environment; Reduce or eliminate the stressor/impact over time; or Compensate for the impact by replacing or providing substitute resources or environments.

Example Approximate Mitigation Based on Habitat Equivalency Analysis Permanent Forest Impacts (acres) Temporary Forest Impacts (acres) 170.06 345.92 Habitat Type Recovery Years Permanent Loss Mitigation Ratio Temporary Loss Mitigation Ratio Mitigation Acreages Mitigation Cost ($6,139/acre) (Worst-case scenario) (Best-case scenario) Bat Maternity Roost habitat Bat Roosting Habitat Migratory Bird Mature Forest Migratory Bird Intermediate Forest Early Successional Forest (Birds & Bats) 120 5.4 4.9 1458.34 2082.10 $18,734,788.46 70 2.2 1.8 594.1390994 764.8541712 $8,342,859.69 100 2.3 1.8 621.1454221 764.8541712 $8,508,651.50 70 2 1.5 540.126454 637.378476 $7,228,702.77 25 1.6 0.6 321.1011632 277.9513904 $3,217,815.63 Grassland 5 N/A 0.13 Native Prairie 100 3.9 2.9 Non-native Prairie 40 1.6 0.6