el paso paul kayser

Slide 2:I am sure we have a group with a varied background when it comes to natural gas deepwater ports, so I want to provide a brief background on deepwater ports and changes to the DWPA that have brought us to where we are today. I will try to go quickly over Background, process, current status of applications and then touch on some areas of concern and have opportunity for questions. I here for the night and more than happy to answer questions well in the evening. I am sure we have a group with a varied background when it comes to natural gas deepwater ports, so I want to provide a brief background on deepwater ports and changes to the DWPA that have brought us to where we are today. I will try to go quickly over Background, process, current status of applications and then touch on some areas of concern and have opportunity for questions. I here for the night and more than happy to answer questions well in the evening.

Slide 3:The Deepwater Port Act of 1974 was actually signed in early 1975 to: Promote commerce and transportation efficiency and to protect the environment LOOP provides a location where tanks ships too large to enter a port can offload oil and also allows single hull tank ships that have been phased out under OPA 90 to continue to call on the US. It has enjoyed an outstanding record with regard to safety and environmental protection. Incidentally, Loop currently handles 10 to 12 percent of the oil imported into the US. As a result it received considerable attention from the Coast Guard for security purposes immediately following the 9/11 attacks. In my opinion demonstrates the value that can be provided by a deepwater port. The DWP modernization act, was almost certainly the result of LOOP�s experience and performance, and recognition that they were being required to meet more stringent requirements than similar offshore operations for both lightering and exploration.The Deepwater Port Act of 1974 was actually signed in early 1975 to: Promote commerce and transportation efficiency and to protect the environment LOOP provides a location where tanks ships too large to enter a port can offload oil and also allows single hull tank ships that have been phased out under OPA 90 to continue to call on the US. It has enjoyed an outstanding record with regard to safety and environmental protection. Incidentally, Loop currently handles 10 to 12 percent of the oil imported into the US. As a result it received considerable attention from the Coast Guard for security purposes immediately following the 9/11 attacks. In my opinion demonstrates the value that can be provided by a deepwater port. The DWP modernization act, was almost certainly the result of LOOP�s experience and performance, and recognition that they were being required to meet more stringent requirements than similar offshore operations for both lightering and exploration.

Slide 4:The DWPA states that Secretary of Transportation is the licensing authority Coast Guard and the Maritime administration are responsible for the processing and that has not changed as a result of the Coast Guard move to the department of homeland security. Our responsibilities are divided based on our core competencies, with CG leading the environmental, safety and engineering reviews and MARAD having financial issues and the actual Record of Decision Secdot delegated the authority to issue a license to the Maritime Administrator Requirements for processing applications are found in 46 CFR 148 and they are largely commodity neutral regarding what needs to be included in the application Interim Final rule published Jan 6, 2003 The DWPA states that Secretary of Transportation is the licensing authority Coast Guard and the Maritime administration are responsible for the processing and that has not changed as a result of the Coast Guard move to the department of homeland security. Our responsibilities are divided based on our core competencies, with CG leading the environmental, safety and engineering reviews and MARAD having financial issues and the actual Record of Decision Secdot delegated the authority to issue a license to the Maritime Administrator Requirements for processing applications are found in 46 CFR 148 and they are largely commodity neutral regarding what needs to be included in the application Interim Final rule published Jan 6, 2003

Slide 5:Following early requests from industry�our legal office determined that the DWPA specifically applied to oil only and didn�t see a clear jurisdictional for applying it to natural gas offshore terminal We had planned on pursuing a legislative change proposal that would provide some clarification and then the attacks of 9/11 occurred. With the anxiety concerning the possibility of a terrorist attack that might use a ship, allowing natural gas to be imported via an offshore terminal seemed one way to address these concerns. We probably would have seen similar legislation regardless but the Maritime Transportation Security Act provided a vehicle for such legislation.Following early requests from industry�our legal office determined that the DWPA specifically applied to oil only and didn�t see a clear jurisdictional for applying it to natural gas offshore terminal We had planned on pursuing a legislative change proposal that would provide some clarification and then the attacks of 9/11 occurred. With the anxiety concerning the possibility of a terrorist attack that might use a ship, allowing natural gas to be imported via an offshore terminal seemed one way to address these concerns. We probably would have seen similar legislation regardless but the Maritime Transportation Security Act provided a vehicle for such legislation.

Slide 6:The Maritime Transportation Security Act added natural gas to the definition of a deepwater port Allowed for managed access as opposed to open access as was required under Act for oil. The was necessary in for companies to be willing to make major investments required in the entire value change. Removed the restriction on geographic area, obviously there still needs to be some reasonable distance between facilities to allow for safe navigation of LNG carriers Told us to issue regulations as soon as practicable, and allowed us to go directly to an interim final rule. And while it changed the NEPA requirement from must do a EIS to allow some flexibility to consider an Environmental Assessment, I don�t see that ever happening again.The Maritime Transportation Security Act added natural gas to the definition of a deepwater port Allowed for managed access as opposed to open access as was required under Act for oil. The was necessary in for companies to be willing to make major investments required in the entire value change. Removed the restriction on geographic area, obviously there still needs to be some reasonable distance between facilities to allow for safe navigation of LNG carriers Told us to issue regulations as soon as practicable, and allowed us to go directly to an interim final rule. And while it changed the NEPA requirement from must do a EIS to allow some flexibility to consider an Environmental Assessment, I don�t see that ever happening again.

Slide 7:350K goes to the US Treasury Costs associated with processing the application are largely the man-hours of Coast Guard and MARAD personnel, the cost of any travel or public meeting and the cost of having an environmental consultant.350K goes to the US Treasury Costs associated with processing the application are largely the man-hours of Coast Guard and MARAD personnel, the cost of any travel or public meeting and the cost of having an environmental consultant.

Slide 8:Large amount of interaction with other agencies, EPA, MMS, FWS, NOAA, DOE, ACOE, we have been working with each of these agencies to ensure that their programs and concerns are taken in account. Big MOU signed by 13 agencies laying out general jurisdictions and promise to play nice and try to meet statutory timelinesLarge amount of interaction with other agencies, EPA, MMS, FWS, NOAA, DOE, ACOE, we have been working with each of these agencies to ensure that their programs and concerns are taken in account. Big MOU signed by 13 agencies laying out general jurisdictions and promise to play nice and try to meet statutory timelines

Slide 9:This shows the basic steps in the NEPA process from the Public Notice to the Record of Decision. Between public notice and the first scoping meeting we really need to get the consultant on board. Basic steps, we get an application Share it with other agencies to get their input on completeness bring in consultant and hold public scoping meeting Based on the feedback from those steps we will generally go back to the applicant for additional information which may require us to suspend the timeline Produce the Draft EIS (preliminary, interim and final/public) Hold public meeting Prepare the final EIS, which may or may not require that we get more information from the applicant, again (preliminary, interim and final) Then hold the final public hearing and the next slide shows the time we are allowed to complete the process. This shows the basic steps in the NEPA process from the Public Notice to the Record of Decision. Between public notice and the first scoping meeting we really need to get the consultant on board. Basic steps, we get an application Share it with other agencies to get their input on completeness bring in consultant and hold public scoping meeting Based on the feedback from those steps we will generally go back to the applicant for additional information which may require us to suspend the timeline Produce the Draft EIS (preliminary, interim and final/public) Hold public meeting Prepare the final EIS, which may or may not require that we get more information from the applicant, again (preliminary, interim and final) Then hold the final public hearing and the next slide shows the time we are allowed to complete the process.

Slide 14:The website has the MOUs, guidance on using a third party mechanism for hiring an environmental consultant, regs, statute, docket numbers for all the applications so far. What about safety and security? Who is responsible�the applicant�the Coast Guard�The website has the MOUs, guidance on using a third party mechanism for hiring an environmental consultant, regs, statute, docket numbers for all the applications so far. What about safety and security? Who is responsible�the applicant�the Coast Guard�

Slide 15:QUESTIONS?? QUESTIONS??