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Environmental Regulation and Liquefied Natural Gas

Environmental Regulation and Liquefied Natural Gas. Commissioner Suedeen G. Kelly, FERC Duke Environmental Law & Policy Forum November 19, 2004. Gas Facts. Natural gas is the economic/ environmental fuel of choice. 96% of natural gas reserves are outside North America.

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Environmental Regulation and Liquefied Natural Gas

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  1. Environmental Regulation and Liquefied Natural Gas Commissioner Suedeen G. Kelly, FERC Duke Environmental Law & Policy Forum November 19, 2004

  2. Gas Facts • Natural gas is the economic/ environmental fuel of choice. • 96% of natural gas reserves are outside North America. • 25% of World natural gas consumption occurs in the US.

  3. Some Production Areas Are Not Accessible * Approximately 29 TCF Of The Rockies Gas Resources Are Closed To Development and 108 Tcf Are Available With Restrictions. Source: NPC

  4. Gas Supply • Projected domestic production will not keep pace with projected demand • Pipeline imports from Canada are declining • LNG is the supply source that will fill the demand-supply gap.

  5. How Much Natural GasIs Out There? Total World Gas Reserves as of 1/1/03: 6,127 Trillion Cubic Feet Source: EIA, World Oil

  6. LNG Imports by Country

  7. FERC Economic Oversight – Access to LNG Terminal Liquid to Vapor Flow LNG Buyers A LNG Suppliers B B Open Access At Delivery of Vapor into Interstate Pipeline System A Open Access At Delivery of Liquid to Terminal 7

  8. FERC Existing Terminals with Approved Expansions A. Everett, MA : 1.035 Bcfd (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 : 1.2 Bcfd (Southern Union – Trunkline LNG) Approved Terminals 1. Hackberry, LA : 1.5 Bcfd, (Sempra Energy) 2. Port Pelican: 1.6 Bcfd, (Chevron Texaco) 3. Bahamas : 0.84 Bcfd, (AES Ocean Express)* 4. Gulf of Mexico: 0.5 Bcfd, (El Paso Energy Bridge GOM, LLC) 5. Bahamas : 0.83 Bcfd, (Calypso Tractebel)* 6. Freeport, TX : 1.5 Bcfd, (Cheniere/Freeport LNG Dev.) 7. Lake Charles, LA: 0.6 Bcfd (Southern Union – Trunkline LNG) Proposed Terminals and Expansions – FERC 8. Fall River, MA : 0.8 Bcfd, (Weaver's Cove Energy/Hess LNG) 9. Long Beach, CA : 0.7 Bcfd, (Mitsubishi/ConocoPhillips – Sound Energy Solutions) 10. Corpus Christi, TX : 2.6 Bcfd, (Cheniere LNG Partners) 11. Sabine, LA : 2.6 Bcfd (Cheniere LNG) 12. Corpus Christi, TX : 1.0 Bcfd (Vista Del Sol - ExxonMobil) 13. Sabine, TX : 1.0 Bcfd (Golden Pass - ExxonMobil) 14. Logan Township, NJ : 1.2 Bcfd (Crown Landing LNG – BP) 15. Bahamas : 0.5 Bcfd, (Seafarer - El Paso/FPL ) 16. Corpus Christi, TX: 1.0 Bcfd (Ingleside Energy – Occidental Energy Ventures) 17.Providence, RI : 0.5 Bcfd (Keyspan & BG LNG) 18. Port Arthur, TX: 1.5 Bcfd (Sempra) 19. Cove Point, MD : 0.8 Bcfd (Dominion) Proposed Terminals – Coast Guard 20. California Offshore: 1.5 Bcfd (Cabrillo Port – BHP Billiton) 21. Louisiana Offshore : 1.0 Bcfd (Gulf Landing – Shell) 22. So. California Offshore : 0.5 Bcfd, (Crystal Energy) 23. Louisiana Offshore : 1.0 Bcfd (Main Pass McMoRan Exp.) 24. Gulf of Mexico: 1.0 Bcfd (Compass Port - ConocoPhillips) 25. Gulf of Mexico : 2.8 Bcfd (Pearl Crossing - ExxonMobil) Planned Terminals and Expansions 26. Coos Bay, OR: 0.13 Bcfd, (Energy Projects Development) 27. Somerset, MA : 0.65 Bcfd (Somerset LNG) 28. California - Offshore : 0.75 Bcfd, (Chevron Texaco) 29. Pleasant Point, ME : 0.5 Bcf/d (Quoddy Bay, LLC) 30. St. Helens, OR: 0.7 Bcfd (Port Westward LNG LLC) 31. Offshore Boston, MA: 0.8 Bcfd (Northeast Gateway – Excelerate Energy) 32. Galveston, TX: 1.2 Bcfd (Pelican Island – BP) 33.Pascagoula, MS: 1.0 Bcfd (Gulf LNG Energy LLC) 34. Port Lavaca, TX: 1.0 Bcfd (Calhoun LNG – Gulf Coast LNG Partners) 35. LI Sound, NY: 1.0 Bcfd (Broadwater Energy – TransCanada/Shell) 36. Philadelphia, PA: 0.6 Bcfd (Freedom Energy Center – PGW) 37.Pascagoula, MS: 1.3 Bcfd (ChevronTexaco)) Canadian Approved and Planned Terminals 38. St. John, NB : 1.0 Bcfd, (Canaport – Irving Oil)** 39. Point Tupper, NS 1.0 Bcf/d (Bear Head LNG - Anadarko)** 40. Quebec City, QC : 0.5 Bcfd (Project Rabaska – Enbridge/Gaz Met/Gaz de France) 41. Rivière-du- Loup, QC: 0.5 Bcfd (Cacouna Energy – TransCanada/PetroCanada) 42. Kitimat, BC: 0.34 Bcfd (Galveston LNG) 43. Prince Rupert, BC: 0.30 Bcfd (WestPac Terminals) 44. Goldboro, NS 1.0 Bcfd (Keltic Petrochemicals) Mexican Approved and Planned Terminals 45. Altamira, Tamulipas : 1.12 Bcfd, (Shell)** 46. Baja California, MX : 1.0 Bcfd, (Sempra & Shell)** 47. Baja California - Offshore : 1.4 Bcfd, (Chevron Texaco) 48. Lázaro Cárdenas, MX : 0.5 Bcfd (Tractebel/Repsol) 49. Puerto Libertad, MX: 1.3 Bcfd (Sonora Pacific LNG) Existing and Proposed North American LNG Terminals 43 42 41 39 40 38 44 29 30 A 31 17 8 26 27 35 14 36 B 19 20 9 22 C 28 46 15 18 33 47 D 1 11 37 3 5 49 7 6 13 10 25 24 16 23 12 4 34 2 21 32 US Jurisdiction FERC US Coast Guard 45 48 November 2004 * US pipeline approved; LNG terminal pending in Bahamas ** These projects have been approved by the Mexican and Canadian authorities Office of Energy Projects

  9. Northeast LNG Terminals Legend: Existing Terminal Approved Terminal Proposed Terminal: Pre-Filing Proposed Terminal: Filed Working on DEIS Working on FEIS Planned Terminal Pleasant Point, ME Everett, MA Offshore Boston, MA Providence, RI Fall River, MA Somerset, MA Long Island Sound, NY October 2004

  10. Mid-Atlantic LNG Terminals Philadelphia, PA Logan Township, NJ Cove Point, MD Legend: Existing Terminal Approved Terminal Proposed Terminal: Pre-Filing Proposed Terminal: Filed Working on DEIS Working on FEIS Planned Terminal October 2004

  11. Southeast LNG Terminals Legend: Existing Terminal Approved Terminal Proposed Terminal: Pre-Filing Proposed Terminal: Filed Working on DEIS Working on FEIS Planned Terminal Elba Island, GA (C) Bahamas Pipeline only October 2004

  12. Legend: Existing Terminal Approved Terminal Proposed Terminal: Pre-Filing Proposed Terminal: Filed Working on DEIS Working on FEIS Planned Terminal Gulf Coast LNG Terminals Pascagoula, MS Lake Charles, LA Port Arthur Sabine Pass, LA Cameron Golden Pass, TX Galveston, TX Main Pass Freeport, TX Compass Port Port Lavaca, TX Gulf Landing Corpus Christi LNG, TX Vista Del Sol Ingleside LNG Pearl Crossing Port Pelican Brownsville, TX Energy Bridge October 2004

  13. California LNG Terminals Legend: Existing Terminal Approved Terminal Proposed Terminal: Pre-Filing Proposed Terminal: Filed Working on DEIS Working on FEIS Planned Terminal Long Beach, CA California Offshore BHP Billiton Crystal Energy Chevron Texaco October 2004

  14. Northwest LNG Terminals Legend: Existing Terminal Approved Terminal Proposed Terminal: Pre-Filing Proposed Terminal: Filed Working on DEIS Working on FEIS Planned Terminal St. Helens, OR Coos Bay, OR October 2004 Office of Energy Projects 14

  15. Maximum LNGDeliverability Growth

  16. US Natural Gas Balance

  17. LNG Siting Processes There are two FERC processes for siting LNG terminals: • FERC Traditional Review Process • Pre-Filing Process

  18. FERC Public Meeting & Public Comment LNG Review Process Notice of Application Interventions / Protests Notice of Intent Safety and Engineering Cryogenic Design & Safety Review Scoping Meetings & Site Visit Data Requests / Analysis & Agency Coordination Technical Conference DEIS FEIS Authorization / Denial 18

  19. The FERC Process: We Issue Notice of the Application Project Sponsor Sends Landowner Notification Package SCOPING = We Issue Notice of Intent to Prepare the NEPA Document Public Meeting(s) Public Input: File an Intervention Contact the project sponsor w/questions, concerns; contact FERC Send letters expressing concerns about environmental impact Attend scoping meetings Public Involvement

  20. The FERC Process: Issue Notice of Availability of the DEIS Public Meetings on DEIS Issue a Commission Order Public Input: File comments on the adequacy of DEIS Attend public meetings to give comments on DEIS Interveners can file a request for Rehearing of a Commission Order Public Involvement

  21. LNG TerminalSiting Issues • Safety • Take Away Capacity • Local acceptance • Federal and State approvals

  22. Safety • Proximity to residential and commercial areas raises public safety concerns • Exclusion zones • DOT/OPS enforces security • FERC performs pre- and post-certificate reviews of LNG terminals • Biennial reviews continue for life of terminal. • Coast Guard enforces offshore ship safety

  23. Takeaway Capacity • Is there an existing pipeline with takeaway capacity? • Does the project require new pipeline construction? • NEPA requires an analysis of the cumulative effects. • Can not have an LNG terminal without takeaway capacity

  24. Federal and State Approvals • Must get approvals: • FERC – NGA Approval • DOT/OPS – Exclusion Zones • Coast Guard – Vessel Operating Plan • Corps of Engineers – Dredging, Wetland Filling, Alternative Sites • NMFS, FWS – Endangered Species Act • Coastal Zone Consistency Determination • State Agency Requirements

  25. FERC’s Recent Actions • FERC’s Modeling Study • Skikda Accident Follow-up • Reorganization for Safety @ FERC • Fire Marshal Interaction • Three “Faces” of LNG

  26. Recent EventsThe FERC Model • A number of studies gave rise to controversy • FERC contracted with ABSG to identify models • Gives FERC the ability to do more site specific modeling and reviews in EISs • Provides a solid theoretical foundation from which to build on as new information becomes available • Assumptions in the study are conservative

  27. Recent EventsSkikda Accident • Preliminary findings: • Initial explosion of high-pressure steam boiler caused by hydrocarbon leakage into combustion air fan • Larger secondary explosion of the hydrocarbon vapors in the immediate vicinity. • Consequences: Loss of life and plant property • March 13 – 15, 2004 – FERC / DOE Team inspected accident site and interviewed Sonatrach. • FERC / DOE Report addresses team review.

  28. Recent EventsReorganization for Safety • New LNG Branch at FERC to focus on and enhance LNG review, inspection programs • Provide for Seamless Review of LNG Facilities • Interagency Agreement on Safety and Security • Application of FERC Model for LNG Tanker Release Consequences • Contract awarded for review of the LNG Program

  29. Recent EventsFire Marshal Interaction • National Association of State Fire Marshals (NASFM) • The Partnership for Excellence in Pipeline Safety is authorized under a Cooperative Agreement between the NASFM and the OPS • NASFM will mobilize America’s emergency responders and the communities they serve to help prevent, safely mitigate and investigate pipeline incidents • LNG module being developed • www.safepipelines.org

  30. Recent EventsThree “Faces” of LNG • How you get your LNG news affects your perception • Popular Press (e.g., Newspapers) • Trade Press • FERC Filings and Issuances

  31. LNG Supply Stream -- From Production to Distribution Natural Gas Pipelines Dock Dock Natural Gas Production Natural Gas Production Storage and Vaporization Facility Liquefaction and Storage Facility

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