FERC UPDATE

All Things Natural Gas

Federal Energy Regulatory Commission

Washington, D.C
April 29, 2010
 Gas Pipeline Program

 Evaluate applications for facilities to import, export, transport,

store or exchange natural gas
 Authorize the construction and operation of facilities for such
services
 Approve abandonment of such facilities

 Conduct environmental reviews of proposals involving

construction, modification, or abandonment
 Implement the “Pre-Filing Process”

 Conduct inspections of LNG facilities and pipeline construction

April 29, 2010 Federal Energy Regulatory Commission 1

 Projects Exempt from
FERC Jurisdiction

 Local Distribution Company facilities (e.g.,

Baltimore Gas and Electric, Washington Gas
Light, etc.)
 Intrastate pipelines (where gas is produced,
transported and consumed within a single
state)
 Hinshaw pipelines (gas is produced in one
state, but is transported and consumed within
another)
 Gathering facilities

April 29, 2010 Federal Energy Regulatory Commission 2

 FERC Process

 FERC’s process is a model of efficiency

 Pre-filing
 Application Analysis
 Post-authorization
 This process works for all stakeholders
 Project sponsors
 Federal, state, and local agencies
 NGOs
 Landowners
 Other concerned entities

April 29, 2010 Federal Energy Regulatory Commission 3

 Natural Gas Act

 Case Specific Section 7(c) Certificate

Conduct a full review of proposal including

engineering, rate, accounting, and market analysis

Conduct an environmental review by preparing an

Environmental Assessment or an Environmental
Impact Statement

April 29, 2010 Federal Energy Regulatory Commission 4

 Project Evaluation

How Does FERC Evaluate All

Of These Major Projects?

What Are The Criteria Used in

This Evaluation?

April 29, 2010 Federal Energy Regulatory Commission 5

 Certificate Process Overview

Non-Environmental Review and Analysis

• Engineering – GQI, storage, hydraulic flow
• Tariff – rates, terms & conditions of service
• Policy – precedents, rules, regulations
• Accounting

Application Order
Parallel Processing Paths Issued
Filed

Environmental Review and Analysis

• Biological – fish, wildlife, vegetation
• Cultural – historic preservation
• Land use – recreation, aesthetics
• Soils and geologic
• Air and noise – quality, loudness
• Socioeconomic impacts
• System alternatives
 Certificate Policy Statement

 Goals
─ Foster Competition
─ Consider Captive Customers
─ Avoid Unnecessary Physical Impacts
─ Achieve Optimal Amount of Facilities
─ Encourage Complete Record
─ Expedite Review Time

April 29, 2010 Federal Energy Regulatory Commission 7

 Certificate Policy Statement

 Develop Record

 Adverse Impacts on
• Existing Customers and Pipelines
• Landowners
• Communities

 Specific Benefits (meet new demand, eliminate bottlenecks, access new supplies, lower
cost to consumers, new interconnects to improve grid, provide competitive alternatives, increase electric
reliability, clean air objectives, etc)

 Need and Market (precedent agreements, demand projections, etc)

 Condemnation Impact

April 29, 2010 Federal Energy Regulatory Commission 8

 Balancing Interests

P e o p le L ik e ... B u t T h e y A ls o W a n t...

D ue Process Ex pedited Process

Sm aller G overnm ent Effectiv e Go vernm ent

Less Regu lation A ssuranc e of Fair M ark ets

Prote ction from Market

M arket-dictated O utcom es D ysfunctio ns, U nexpecte d R isk,
an d Un just R ates
Pro te ction for the Env ironm e nt and A m ple Supp lies of
Pro perty Interests Low -cost Energy

April 29, 2010 Federal Energy Regulatory Commission 9

In the United States, there are approximately 217,300 miles
of interstate natural gas transmission pipeline.

Source: Based on data from Ventyx Global Energy Decisions, Inc., Velocity Suite, January 2010, and EIA’s Natural Gas Pipelines.

April 29, 2010 Federal Energy Regulatory Commission 10

 Major Pipeline Projects Certificated (MMcf/d)
1. Algonquin (285, 131)
January 2000 to April 2010 2. Islander East (285)
3. Iroquois (230,85, 100, 200)
4. Columbia (135,270)
5. Algonquin (140)
6. Transcontinental (105)
7. Transcontinental (130)
21. CIG (282,92) 8. Transcontinental (100,142, 250)
22. CIG (85,133,118,105,899) 9. Columbia (94)
23. TransColorado (125,300,250) 10. Maritimes (80,360,418)
24. WIC (120,116,675,350,556,330,230) 11. Algonquin (301)
25. El Paso (140) 12. Tennessee (500)
26. Rendezvous (300) 13. Mill River (800)
27. Entrega (1,500) 14. Tennessee (136)
28. Northwest (450) 15. Texas Eastern (900)
29. Rockies Express West (1,800) 16. Algonquin (325)
Northwest (162,113) 17. Algonquin (800)
30. White River Hub (2,565)
NorthernStar (1,300) 31. Northwest (582) 18. Broadwater (1,000)
Northwest Northern 19. Mid-Atlantic (1,500)
(224) 32. Rockies Express (200)
33. Sundance Trail (Northwest) (150) Border 20. Algonquin (140, 281)
Northern
(544,130)
Pacific 34. Diamond Mountain (WIC) (180) Natural ANR
Connector (136) (194,220,
(1,000) WBI Guardian Dominion (700) 10
GTN 107,143,168, (750, 537)
(207) Northwest(191) (80) 14 20 13 17
Bison Northern 98) Empire(250)
Pipeline Natural 1 11
(477) Millenium (525) 16 5
(374) 8
Tuscarora (96) Ruby Pipeline 32 NFS/DTI (150)
26 33 24 7 18
(1,456) 27 Horizon(380) TETCO (150, 150, 455) 12 32 Transco
Trailblazer KM (360) 6 15 (209)
Questar Overthrust 29 (324)
9 19 Dominion
(550, 750, 300) 31 30 Vector (245,105) TETCO TETCO (200, 244)
(250) 4
(223)
Questar (272,102,175) 34 8 621 Cove Point (445,800)
23 Rockies Express East (1,800) Columbia Transco (165)
28 22 Cheyenne Midwestern
Equitrans (172, 100)
Kern River Plains (560,170) Fayetteville (120) (130)
Kern River (282) 25 Express
(135,886,145) (2,000)
East Tenn. (225)
MarkWest (638) East Tenn. (276)
Center East Tenn. (86)
Southern Trails (120) Point (113,132)
Petal TETCO East Tenn. (170)
El Paso Midcontinent (1500, 300) (700,600) (197) Transco (204,236,323,309)
Otay Mesa (110) (502) Transwestern (150,375,500) Texas Gas (1,609, 2,300) Southern/Magolia (82)
Trans Union (430)
North Gulf South(1,475, 560, 556) Elba Express (1,175)
Baja El Paso (230,320,620,150) Trunkline (510)
Gulf Crossing
(500, 81 Center Point (1,237, 280, 274) (1,732) SCG Pipeline (190)
2,700) Discovery (200) Tiger (2,000) Cypress (Southern) (500)
Southeast Supply(1,140,175, 360)
Natural (200,300)
Cameron McMoRan
Oasis Pipeline TETCO (360) (1,500) Southern (336,330, 375)
Port Arthur (3,000) (1,500,850) Transco
(600) Trunkline (200) (253) Florida Gas (239,270,100, 820)
Gulf LNG (1,500)
Point Comfort (1,000) Tennessee (400,200,100) Calypso (832)
Dominion South (200) Cheniere Creole Trail (2,000)
110.24 BCF/D Total San Patricio (1,000) Trunkline(1,500)
Port Dolphin
Ocean Express(842)
Kinder Morgan (3,395)
15,747 Miles Sonora (1,000) Golden Pass (2,500) Gulfstream
(1,200)
Tennessee (320) (1,130, 345, 155)
Vista del Sol (1,100) Cheniere Corpus Christi (2,600)

April 29, 2010 Federal Energy Regulatory Commission 11

 All Storage Projects
(Capacity in Bcf)

ANR Pipeline Dominion (0.1)

Ryckman Creek (25.0)
ANR Pipeline (17.0) SemGas (5.5)
(14.7) Arlington Storage (7.0,1.4)
Magnum Gas NFG (8.5)
(11.2) SourceGas Northern Natural Central NY (13.0)
(10.4) (2.1) Bluewater UGI (14.7) Dominion (18.0)
Magnum Gas Northern Natural (29.2) Dominion (4.4) Steckman Ridge (12.0)
(42.0) Dominion (9.4)
Blue Sky (4.4) (8.5) Columbia (5.7) UGI LNG (0.2, 1.0)
East Cheyenne Southern Star Natural (10.0)
(4.0) Chestnut Ridge (25.0)
(18.9) KM (1.0) Mississippi
Hub (3.0)
ANR Pipeline (70.0)
Columbia (6.7) Texas Eastern (3.0)
Unocal Windy Hill
Tricor Ten CIG (7.0) Northern Texas Gas (8.2)
(22.4)
(6.0) Texas Gas (11.3) Texas Gas (8.25) Tenasda (17.5)
Leader One (7.5) Natural (6.0) Atmos (15.0)Orbit (5.0) Columbia (12.4)
Arizona Natural Gas Monroe Gas (12.0) Tarpon Whitetail (8.6)
(3.5) Natural (10.0) Mississippi Hub Petal (5.0) Four Mile Creek (8.0)
(12.0, 15.0)
ANGS/El Paso (20.0) CenterPoint (3.0) County Line (6.0)
Bobcat (12.0,1.5, 24.0) Freebird (6.1)
Multifuels (8.0) Natural (10.0) Bobcat (2.1, 9.3) Caledonia (11.7, 5.2)
Enstor-Waha Storage (7.2) AGL (16.0) Sempra Energy (2.5)
Falcon Worsham-Steed (12.0) Enstor (30.0) Leaf River Energy (32.0)
Spectra Energy (6.5) Falcon MoBay (50.0)
Falcon Hill-Lake (3.0) Falcon MoBay (3.2)
SG Resources (12.0)
Certificated Since 1/1/05 Tres Palacios (36.0)
Copiah (12.2) Floridian Natural (8.0)
Enterprise (10.0) Starks (19.2)
Currently Pending Cadeville (16.4)
EnergySouth (12.0)
Petal (10.0) SG Resources (16.0)
Liberty (17.6, 18.9) Petal (4.0) BCR (15.0)
Pre-Filing Turtle Bayou (12.0)
Perryville Pine Prairie (24.0) Petal (2.8)
On The Horizon Egan Hub (8.0) Black Bayou (15.0) Southeast Gas Storage (24.7)
(15.0)PetroLogistics (6.0, 5.3)Henry Gas (46.0)

April 29, 2010 Federal Energy Regulatory Commission 12

 North American LNG Import Terminals
Existing
U.S.
A. Everett, MA : 1.035 Bcfd (SUEZ LNG - 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 : 2.1 Bcfd (Southern Union -
Trunkline LNG)
L E. Gulf of Mexico: 0.5 Bcfd, (Gulf Gateway Energy
Bridge - Excelerate Energy)
F. Offshore Boston: 0.8 Bcfd, (Northeast Gateway-
A F
Excelerate Energy)
G. Freeport, TX: 1.5 Bcfd, (Cheniere/Freeport LNG
Dev.)
B, I H. Sabine, LA: 2.6 Bcfd (Sabine Pass Cheniere LNG)
I. Cove Point, MD : 0.8 Bcfd (Dominion –
Expansion)*
J. Hackberry, LA: 1.8 Bcfd (Cameron LNG - Sempra
C Energy)
N K. Sabine, LA: 1.4 Bcfd (Sabine Pass Cheniere LNG –
H,K D Expansion)*
G J
E Canada
L. St Johns, NB: 1.0 Bcfd, (Canaport- Irvin Oil)
M US Jurisdiction Mexico
FERC
M. Altamira, Tamulipas: 0.7 Bcfd,
(Shell/Total/Mitsui)
MARAD/USCG
N. Baja California, MX: 1.0 Bcfd, (Sempra)
As of April 12, 2010
* Expansion of an existing facility

April 29, 2010 Federal Energy Regulatory Commission 13

 APPROVED - UNDER CONSTRUCTION
North American LNG U.S.
1. Sabine, TX: 2.0 Bcfd (Golden Pass - ExxonMobil)
Import Terminals 2. Elba Island, GA: 0.9 Bcfd (El Paso - Southern LNG Expansion)*
3. Pascagoula, MS: 1.5 Bcfd (Gulf LNG Energy LLC)
Approved 4. Offshore Boston, MA: 0.4 Bcfd (Neptune LNG - Tractebel)

APPROVED - UNDER CONSTRUCTION

Mexico
5. Manzanillo, MX: 0.5 Bcfd (KMS GNL de Manzanillo)

APPROVED - NOT UNDER CONSTRUCTION

U.S. - FERC
6. Corpus Christi, TX: 1.0 Bcfd (Ingleside Energy - Occidental
Energy Ventures)
7. Corpus Christi, TX: 2.6 Bcfd, (Cheniere LNG)
24 8. Corpus Christi, TX : 1.1 Bcfd (Vista Del Sol - 4Gas)
25 9. Fall River, MA : 0.8 Bcfd, (Weaver's Cove Energy/Hess LNG)
10. Port Arthur, TX: 3.0 Bcfd (Sempra)
11. Logan Township, NJ : 1.2 Bcfd (Crown Landing LNG – BP)
4 12. Cameron, LA: 3.3 Bcfd (Creole Trail LNG - Cheniere LNG)
18 13. Freeport, TX: 2.5 Bcfd (Cheniere/Freeport LNG Dev. -
20 9 Expansion)
17 14. Hackberry, LA: 0.85 Bcfd (Cameron LNG - Sempra Energy -
11
19 Expansion)
15. Pascagoula, MS: 1.3 Bcfd (Casotte Landing - ChevronTexaco)
16. Port Lavaca, TX: 1.0 Bcfd (Calhoun LNG - Gulf Coast LNG
Partners)
17. LI Sound, NY: 1.0 Bcfd (Broadwater Energy-TransCanada/Shell)
2 18. Bradwood, OR: 1.0 Bcfd (Northern Star LNG - Northern Star
Natural Gas LLC)
26 19. Baltimore, MD: 1.5 Bcfd (AES Sparrows Point - AES
10 3
12 1 13 14 16 Corporation)
7 8 23 20. Coos Bay, OR: 1.0 Bcfd (Jordan Cove Energy Project)
6 15 21 22 U.S. - MARAD/Coast Guard
21. Port Pelican: 1.6 Bcfd, (Chevron Texaco)
22. Gulf of Mexico: 1.0 Bcfd (Main Pass McMoRan Exp.
23. Offshore Florida: 1.2 Bcfd (Hoëgh LNG - Port Dolphin Energy)

5 Canada
US Jurisdiction 24. Rivière-du- Loup, QC: 0.5 Bcfd (Cacouna Energy -
As of April 12, 2010 TransCanada/PetroCanada)
FERC 25. Quebec City, QC : 0.5 Bcfd (Project Rabaska - Enbridge/Gaz
* Expansion of an existing facility
MARAD/USCG Met/Gaz de France)
Mexico
26. Baja California, MX : 1.5 Bcfd (Energy Costa Azul - Sempra -
March 24, April
2010 29, 2010 Expansion)
Federal Energy Regulatory Commission 14
 Market Knows Best

 FERC is not the market

 FERC will present a “menu” of infrastructure solutions
that are:
 In the public interest
 Will cause the least environmental impact
 Will be safe

 The market is in the best position to select the

infrastructure projects that get built

April 29, 2010 Federal Energy Regulatory Commission 15

 Conclusions
 The Commission process has benefited all stakeholders
in natural gas projects
 More needs to be done
 Turn opposition into understanding
 Continue to refine the siting process
 More infrastructure is coming
 Alaska
 Pipes from non-traditional sources
 Hydrokinetics
 Electric transmission

April 29, 2010 Federal Energy Regulatory Commission 16