FERC PERSPECTIVE ON GAS INFRASTRUCTURE
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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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FERC PERSPECTIVE ON GAS INFRASTRUCTURE

Energy Bar AssociationAnnual MeetingApril 27, 2006

Jeff C. Wright, Chief

Energy Infrastructure Policy Group

Office of Energy Projects


Overview
Overview

  • EPAct Update

  • Hurricanes and Lessons Learned

  • Alaska

  • Storage NOPR

  • Gas Infrastructure Update



Energy policy act of 2005
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)


Energy policy act of 20051
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


Energy policy act of 2005 selected activities
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



Area effected by hurricanes katrina and rita
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


Natural gas production recovery timeline
Natural Gas Production Recovery Timeline

Shut-in Production (MMcf per day) -- Gulf of Mexico and Onshore Louisiana


Lessons learned
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.


Lessons learned1
Lessons Learned

  • Storage of energy supplies can mitigate adverse situations

    • Natural Gas

    • Oil

    • Electricity

  • Have regulations in place that reduce delays in reconstruction



FERC

Alaska

Natural Gas

Transportation System and

Other Pipelines

Office of Energy Projects

13


Ferc events pre angpa
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.


Ferc events post angpa
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


Ferc events post angpa1
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)


Current and future events
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


Alaska pipeline construction timeline
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.


Storage NOPR

A – Salt Caverns

B – Aquifers

C – Depleted Reservoirs

Source: FERC adaptation from PB-KBB Inc.


Storage nopr
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


Storage nopr1
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



Major pipeline projects certificated mmcf d january 2005 to april 2006
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)


Major pipeline projects pending mmcf d april 2006
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)


Major pipeline projects pre filing mmcf d april 2006
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


Major pipeline projects on the horizon mmcf d april 2006

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


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


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


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


U s needs all sources to meet gas demand
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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