Sustainability Programs How It’s Done New York Harbor Case Study April 2009

Who We Are AlterEcho Overview 25 years as experts in environmental and business consulting U.S. EPA’s senior oversight consultants for resource management and regulatory expertise Efficient and effective “green” consulting has been our business for decades

Sustainability Being “green” is a hot topic, but what does it mean for an organization? A successful sustainability program is a culture built on: [ - ] Environmental Performance [ - ] Economic Benefit/ROI [ - ] Regulatory Management [ - ] Social Responsibility

Sustainability Sustainability is about managing resources and operations for maximum efficiency and effectiveness with minimal environmental impact. [ - ] Strive to eliminate waste [ - ] Protect the environment and future business resources [ - ] Increase operational efficiency, while decreasing costs [ - ] Benefits spread beyond initial process improvements

New York Harbor Case Study Welcome to the oil business in New York Harbor in the early 1990’s . . . [ - ] Loss of money due to poor inventory/product control [ - ] Facing multiple city, state and Federal regulatory violations [ - ] Daily negative publicity impacting brand value [ - ] Facilities predominantly located in disadvantaged areas

New York Harbor Consortium of oil companies seeking to improve performance and receive regulatory relief Objectives - reduce costs, eliminate wastes, re-engineer processes, increase operational efficiency, improve regulatory effectiveness, manage their image, bolster community relations Restated project goal: STOP SPILLING OIL

First Steps This situation required an integrated sustainability solution before we knew what sustainability really meant Assembled the Team Learned the Business [ - ] Experts, Client representatives, stakeholders (regulators, politicians, community members) [ - ] Do the homework [ - ] Regulations as well as technical, operational, and financial

Customized facility evaluation protocol Assess Value Drivers Identified and evaluated what drives value in the oil terminal business Customized facility evaluation protocol [ - ] Origin of our proprietary sustainability tool Policies, practices, requirements and reality

Findings [ - ] Catalogued a wide range of best and worst practices, as well as regulatory violations at over 40 facilities [ - ] Most effective way to protect environment was to more efficiently manage the facilities for greater ROI - high costs of wasted resources and inefficient use of time [ - ] Culture change needed to move from reactive problem solving to creating value [ - ] “Value every drop” culture

Management Commitment Implementation Management Commitment Cost Benefit Analysis Focused on areas where biggest positive benefits could be achieved Communication and Reporting [ - ] Internal and with stakeholders [ - ] Brand/reputation building value [ - ] Regulatory relief [ - ] Equipment upgrades [ - ] Training [ - ] Supply management/ Inventory Control

Results When was the last time you heard about a major New York Harbor oil spill? Operating cost reductions [ - ] Product loss [ - ] Spill clean-up [ - ]Regulatory fines and inspections Reputation and public perception Led the way for improvements throughout the harbor [ - ] Relationships with regulators [ - ] Role in the community