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Jeff C. Wright, Chief Energy Infrastructure Policy Group Office of Energy Projects

FERC PERSPECTIVE ON GAS INFRASTRUCTURE. Energy Bar Association Annual Meeting April 27, 2006. Jeff C. Wright, Chief Energy Infrastructure Policy Group Office of Energy Projects. Overview. EPAct Update Hurricanes and Lessons Learned Alaska Storage NOPR Gas Infrastructure Update.

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Jeff C. Wright, Chief Energy Infrastructure Policy Group Office of Energy Projects

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  1. FERC PERSPECTIVE ON GAS INFRASTRUCTURE Energy Bar AssociationAnnual MeetingApril 27, 2006 Jeff C. Wright, Chief Energy Infrastructure Policy Group Office of Energy Projects

  2. Overview • EPAct Update • Hurricanes and Lessons Learned • Alaska • Storage NOPR • Gas Infrastructure Update

  3. EPAct Update

  4. Energy Policy Actof 2005 • LNG (§311) • FERC is lead decisional agency • Pre-filing is mandatory • Regulations issued on October 7th • Hackberry Policy is now codified • Project sponsor can adopt open access, but cannot be required to be open access • Storage with MBR can be approved even if market power is present (§312)

  5. Energy Policy Actof 2005 • Process Coordination (§313) • FERC is lead agency for all Section 7 & 3 filings. • Establishes processing schedule • FERC record is the one record upon which all appeals of Federal actions are based • Judicial Streamlining • All appeals must be heard in Federal appeals court in the region where facility is to be located • Violation of schedule to be heard in US Court of Appeals for the District of Columbia

  6. Energy Policy Actof 2005Selected Activities • LNG Pre-filing Rulemaking • Issued October 7, 2005 • Effective November 17, 2005 • LNG Forums with DOE and Other Agencies • Boston and Astoria, Oregon....so far • MOU with Defense on LNG Facilities • Alaska Progress Report – Every 6 Months • Lead Agency • Policy Statement issued September 26, 2005 • NOPR under construction

  7. Hurricane Lessons

  8. Area Effected by Hurricanes Katrina and Rita • In the hurricane’s paths: • 76 percent of the Gulf’s oil and gas platforms • 47 percent of U.S. refining capacity • 30 percent of U.S. oil production • 20 percent of U.S. natural gas production

  9. Natural Gas Production Recovery Timeline Shut-in Production (MMcf per day) -- Gulf of Mexico and Onshore Louisiana

  10. Lessons Learned • Geographic diversity is desirable • Concentration of infrastructure may have an impact on the entire country. • Energy supply facilities near load centers reduces risk. • Redundant capacity • Good to have in adverse times or during unexpected conditions. • Not all infrastructure work all the time.

  11. Lessons Learned • Storage of energy supplies can mitigate adverse situations • Natural Gas • Oil • Electricity • Have regulations in place that reduce delays in reconstruction

  12. ALASKA UPDATE

  13. FERC Alaska Natural Gas Transportation System and Other Pipelines Office of Energy Projects 13

  14. FERC EventsPre-ANGPA 2001 In May, National Energy Policy recommends expedited construction of an Alaskan pipeline to deliver natural gas to the lower 48 states. 2001 Alaska Natural Gas Interagency Task Force formed - Members include: Energy, State, Interior (BLM, MMS), DOT (OPS), FERC (Energy Projects), Joint Pipeline Office 2004“Alaska Natural Gas Pipeline Act” approved and signed by President on October 13th.

  15. FERC EventsPost-ANGPA • Alaska Natural Gas Pipeline Act (ANGPA) approved and signed by President on October 13, 2004 • Issuance of Order 2005 (February 2005) • Establishes Open Season Provisions • Memoranda of Understanding • FERC and National Energy Board of Canada (5/10/04) • FERC and Regulatory Commission of Alaska (1/24/03) • MOU under development with DOE, DOI, and 10 other federal agencies to ensure cooperation and coordination of efforts

  16. FERC EventsPost-ANGPA • MOU under development with DOE, DOI, and 10 other federal agencies to ensure cooperation and coordination of efforts • Meetings with agencies and stakeholders in Alaska (through January 2006) • Submitted Alaska pipeline progress report to Congress as required by EPAct 2005 (2/1/06)

  17. Current andFuture Events • Agreement reached between Alaska and the three major producers to build pipeline (2/21/06) • Terms of Oil Tax • Terms of Gas Contract • Public comment period on draft contract • Alaska legislature convenes to vote on approval of gas contract

  18. Alaska Pipeline Construction Timeline Example Case(February 2006) Obtain permits, purchase pipe, compressors, etc. Full service Application development process begins Application filed FERC Order Stranded Gas Act award EIS Preparation Construction Jun ’06 Mar ‘07 Sep ‘07 Sep‘08 Mar ‘10 May ‘10 Nov ‘12 Nov ‘15 Nov ‘16 Staging of camps, bridges, roads, and delivery of pipe About 1 year to produce and treat gas and fill the pipeline Open Season and Pre-Filing Process Timeline assumesthe producer’s 52” pipe and Canada completes permitting within same timeframe.

  19. Storage NOPR A – Salt Caverns B – Aquifers C – Depleted Reservoirs Source: FERC adaptation from PB-KBB Inc.

  20. Storage NOPR Two Methods to Seek Market Based Rates • Demonstrate Lack of Significant Market Power • Expand definition of relevant product market • EPAct 2005/New NGA Section 4(f) • Submit measures to protect consumers from market power abuse • Commission seeks comment on approaches for such protection 20

  21. Storage NOPR • Applicants under either method must file appropriate supporting data • Commission determines: • If applicant lacks market power, or • That applicant will adopt adequate customer protections before charging market-base rates • Comments due mid-February • Final Rule.... 21

  22. Gas Infrastructure Update

  23. Major Pipeline Projects Certificated (MMcf/d)January 2005 to April 2006 1. TransColorado (300) 2. Rendezvous (300) 3. WIC (350) 4. Entrega (EnCana) (1,500) 5. Questar (102) ANR (168) Mill River (800) 4 2 Transcontinental (105) 5 3 Northern Border (Chicago III) (130) 1 Columbia (172) CIG (105) Midwestern (120) Jewell Ridge Pipeline (East Tennessee) (235) CenterPoint(113) El Paso (502) Golden Pass (2,000) Petal (600) Dominion South (200) Triple-T Extension (Tennessee) (200) San Patricio (1,000) 12.6 BCF/D Total 903 Miles 13.2 BCF/D Total 812 Miles Cheniere Corpus Christi (2,600) Vista Del Sol (1,100)

  24. Major Pipeline ProjectsPending (MMcf/d)April 2006 Market Access (Iroquois) (100) Millennium (525) Algonquin (325) NE ConneXion (Tennessee) (136) Algonquin (800) Empire Connector (Empire Pipeline) (250) Broadwater Pipeline (Broadwater) (1,000) 2007 Expansion (Vector Pipeline) (245) Logan Lateral (Texas Eastern) (900) TIME II (Texas Eastern) (150) Dominion (700) Leidy to Long Island (Transco) (100) Gulf LNG Pipeline (1,500) Cypress Pipeline (Southern Natural) (500) Carthage to Perryville (CenterPoint) (1,237) North Baja Expansion (North Baja Pipeline) (2,700) Florida Gas (160) Cameron (1,500) McMoRan (1,500) Compass Pass (1,000) Seafarer Pipeline (El Paso) (800) Point Comfort (1,000) 20.4 BCF/D Total 1,334 Miles Cheniere Creole Trail (3,300)

  25. Major Pipeline ProjectsPre-Filing (MMcf/d)April 2006 GII Project (Guardian Pipeline) (537) Northern Lights (Northern Natural) (500) Wamsutter Expansion (Questar Overthrust) (625) Kanda & Mainline (WIC) (225) Brookhaven Lateral (Iroquois) (80) Overthrust to Opal Southern Expansion (Questar Pipeline) (550, 170) Rockies Express (Rockies Express Pipeline) (1,500) Big Sandy Pipeline (Equitrans) (70) Potomac Expansion (Transcontinental) (150) Blanco to Meeker (TransColorado) (250) Phoenix Lateral (Transwestern) (500) Louisiana Pipeline (Kinder Morgan) (3,395) East TX/North LA Loop Mississippi Expansion (Gulf South) (1,000) (500) Sonora Pipeline (500) 10.6 BCF/D Total 2,023 Miles

  26. Alaska (4,000) Panhandle Eastern (750) Maritimes Phase IV (1,563) Northwinds Pipeline (NFG) (500) Dracut Interconnect (Tennessee) (250) Coronado (500) Painter Lateral (Overthrust) (200) EnCana Extension (Entrega) (1,000) Questar Expansion (160 & 100) Uinta Basin (WIC) (300) Natural (232) Trunkline (400) CenterPoint (1,000) Continental Connector (El Paso Corp.)(2,000) Carthage Pipeline(KM Interstate)(700) A/G Line Expansion (Natural)(139) Mid-Continent Express (Kinder Morgan) (1,500) Mid-Continent Crossing (CenterPoint) (1,250) Mississippi Expansion (Gulf South) (1,000) Transcontinental (Mobile Bay) (700) Gulfstream (Phase III) (200) Major Pipeline ProjectsOn The Horizon (MMcf/d)April 2006 18.4 BCF/D Total 5,102 Miles

  27. Storage Projects(Capacity in Bcf)April 2006 SemGas (5.5) Bluewater (27.0) Dominion (9.4) Columbia (16.4) Unocal Windy Hill (6.0) Texas Gas (8.2) Columbia (12.4) Texas Gas (6.8) Natural (10.0) Port Barre (10.5) County Line (6.0) CenterPoint (15.0) Freebird (6.1) Copper Eagle (3.2) Bobcat (12.0) Caledonia (11.7) Natural (10.0) EnCana (8.0) Falcon MoBay (20.0) Falcon Worsham-Steed (12.0) Falcon Hill-Lake (10.4) Certificated Since 1/1/05 Starks (19.2) Currently Pending Liberty (17.6) Petal (5.0) On The Horizon

  28. FERC CONSTRUCTED A. Everett, MA : 1.035 Bcfd (SUEZ/Tractebel - DOMAC) B. Cove Point, MD : 1.0 Bcfd (Dominion - Cove Point LNG) C. Elba Island, GA : 1.2 Bcfd (El Paso - Southern LNG) D. Lake Charles, LA : 1.5 Bcfd (Southern Union - Trunkline LNG) E. Gulf of Mexico: 0.5 Bcfd (Gulf Gateway Energy Bridge - Excelerate Energy) APPROVED BY FERC 1. Lake Charles, LA: 0.6 Bcfd (Southern Union - Trunkline LNG) 2. Hackberry, LA : 1.5 Bcfd (Cameron LNG - Sempra Energy) 3. Bahamas : 0.84 Bcfd (AES Ocean Express)* 4. Bahamas : 0.83 Bcfd (Calypso Tractebel)* 5. Freeport, TX : 1.5 Bcfd (Cheniere/Freeport LNG Dev.) 6. Sabine, LA : 2.6 Bcfd (Cheniere LNG) 7. Corpus Christi, TX: 2.6 Bcfd (Cheniere LNG) 8. Corpus Christi, TX : 1.0 Bcfd (Vista Del Sol - ExxonMobil) 9. Fall River, MA : 0.8 Bcfd (Weaver's Cove Energy/Hess LNG) 10. Sabine, TX : 1.0 Bcfd (Golden Pass - ExxonMobil) 11. Corpus Christi, TX: 1.0 Bcfd (Ingleside Energy - Occidental Energy Ventures) APPROVED BY MARAD/COAST GUARD 12. Port Pelican: 1.6 Bcfd (Chevron Texaco) 13. Louisiana Offshore : 1.0 Bcfd (Gulf Landing - Shell) CANADIAN APPROVED TERMINALS 14. St. John, NB : 1.0 Bcfd (Canaport - Irving Oil) 15. Point Tupper, NS 1.0 Bcf/d (Bear Head LNG - Anadarko) MEXICAN APPROVED TERMINALS 16. Altamira, Tamulipas : 0.7 Bcfd (Shell/Total/Mitsui) 17. Baja California, MX : 1.0 Bcfd (Energy Costa Azul - Sempra) 18. Baja California - Offshore : 1.4 Bcfd (Chevron Texaco) PROPOSED TO FERC 19. Long Beach, CA : 0.7 Bcfd, (Mitsubishi/ConocoPhillips - Sound Energy Solutions) 20. Logan Township, NJ : 1.2 Bcfd (Crown Landing LNG - BP) 21. Bahamas : 0.5 Bcfd, (Seafarer - El Paso/FPL ) 22. Port Arthur, TX: 1.5 Bcfd (Sempra) 23. Cove Point, MD : 0.8 Bcfd (Dominion) 24. LI Sound, NY: 1.0 Bcfd (Broadwater Energy - TransCanada/Shell) 25.Pascagoula, MS: 1.0 Bcfd (Gulf LNG Energy LLC) 26. Bradwood, OR: 1.0 Bcfd (Northern Star LNG - Northern Star Natural Gas LLC) 27.Pascagoula, MS: 1.3 Bcfd (Casotte Landing - ChevronTexaco) 28. Cameron, LA: 3.3 Bcfd (Creole Trail LNG - Cheniere LNG) 29. Port Lavaca, TX: 1.0 Bcfd (Calhoun LNG - Gulf Coast LNG Partners) 30. Freeport, TX: 2.5 Bcfd (Cheniere/Freeport LNG Dev. - Expansion) 31. Sabine, LA: 1.4 Bcfd (Cheniere LNG - Expansion) 32. Hackberry, LA : 1.15 Bcfd (Cameron LNG - Sempra Energy - Expansion) 33. Pleasant Point, ME : 0.5 Bcfd (Quoddy Bay, LLC) 34. Robbinston, ME: 0.5 Bcfd (Downeast LNG - Kestrel Energy) 35. Elba Island, GA: 0.9 Bcfd (El Paso - Southern LNG) 36. Baltimore, MD: 1.5 Bcfd (AES Sparrows Point – AES Corp.) PROPOSED TO MARAD/COAST GUARD 37. California Offshore: 1.5 Bcfd (Cabrillo Port - BHP Billiton) 38. So. California Offshore : 0.5 Bcfd, (Crystal Energy) 39. Louisiana Offshore : 1.0 Bcfd (Main Pass McMoRan Exp.) 40. Gulf of Mexico:1.0 Bcfd (Compass Port - ConocoPhillips) 41. Gulf of Mexico: 1.5 Bcfd (Beacon Port Clean Energy Terminal - ConocoPhillips) 42. Offshore Boston, MA: 0.4 Bcfd (Neptune LNG - Tractebel) 43. Offshore Boston, MA: 0.8 Bcfd (Northeast Gateway - Excelerate Energy) 44. Gulf of Mexico: 1.4 Bcfd (Bienville Offshore Energy Terminal - TORP Technology) Existing and Proposed North American LNG Terminals 15 14 33 34 42 26 A 43 9 24 20 36 B,23 37 19 38 C,35 18 17 21 2,32 25 6,31 28 D,1 5,30 27 3 4 44 22 10 7 40 39 8 11 E 41 29 13 12 US Jurisdiction FERC MARAD/USCG 16 As of April 23, 2006 * US pipeline approved; LNG terminal pending in Bahamas Office of Energy Projects 28

  29. FERC Potential North American LNG Terminals 60 59 POTENTIAL U.S. SITES IDENTIFIED BY PROJECT SPONSORS 45. Coos Bay, OR: 0.13 Bcfd, (Energy Projects Development) 46. OffshoreCalifornia: 0.75 Bcfd, (Chevron Texaco) 47. Offshore California: 0.75 Bcfd (OceanWay - Woodside Natural Gas) 48. St. Helens, OR: 0.7 Bcfd (Port Westward LNG LLC) 49. Galveston, TX: 1.2 Bcfd (Pelican Island - BP) 50. Philadelphia, PA: 0.6 Bcfd (Freedom Energy Center - PGW) 51. Astoria, OR: 1.0 Bcfd (Skipanon LNG - Calpine) 52. Boston, MA: 0.8 Bcfd (AES Battery Rock LLC - AES Corp.) 53. Calais, ME: ? Bcfd (BP Consulting LLC) 54. Offshore New York: 2.0 Bcfd (Safe Harbor Energy - ASIC, LLC) 55. Offshore Florida: ? Bcfd (Calypso SUEZ) 56. Offshore California: 0.6 Bcfd (Pacific Gateway - Excelerate Energy) POTENTIAL CANADIAN SITES IDENTIFIED BY PROJECT SPONSORS 57. Quebec City, QC : 0.5 Bcfd (Project Rabaska - Enbridge/Gaz Met/Gaz de France) 58. Rivière-du- Loup, QC: 0.5 Bcfd (Cacouna Energy - TransCanada/PetroCanada) 59. Kitimat, BC: 0.61 Bcfd (Galveston LNG) 60. Prince Rupert, BC: 0.30 Bcfd (WestPac Terminals) 61. Goldboro, NS 1.0 Bcfd (Keltic Petrochemicals) 62.Énergie Grande-Anse QC: 1.0 Bcfd POTENTIAL MEXICAN SITES IDENTIFIED BY PROJECT SPONSORS 63. Lázaro Cárdenas, MX : 0.5 Bcfd(Tractebel/Repsol) 64. Puerto Libertad, MX: 1.3 Bcfd(Sonora Pacific LNG) 65. Offshore Gulf, MX: 1.0 Bcfd(Dorado - Tidelands) 66. Manzanillo, MX: 0.5 Bcfd 67. Topolobampo, MX: 0.5 Bcfd 68. Baja California, MX : 1.5 Bcfd (Energy Costa Azul - Sempra - Expansion) 58 62 57 61 53 51 52 48 45 54 50 53 56 47 46 68 55 64 49 67 65 US Jurisdiction FERC MARAD/USCG 66 63 As of April 23, 2006 Office of Energy Projects 29

  30. U.S. Needs All Sourcesto Meet Gas Demand ALASKAN GAS 5% 24% LNG IMPORTS 1% NET PIPELINE IMPORTS 7% 14% 85% 64% LOWER 48 PRODUCTION Source: EIA, EEA, FERC

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