lng: regulatory and regional considerations the energy council’s lng/cng workshop biloxi,...

LNG: Regulatory and Regional Considerations

The Energy Council’s LNG/CNG Workshop

Biloxi, MississippiApril 8, 2005

Robert Cupina, Deputy Director, Office of Energy Projects

FERC

Office of Energy Projects

2

FERCHelping Markets Work

AdequateInfrastructure

OEP

EffectiveMarket Rules

OMTR

MarketOversight

OMOI

CompetitiveMarketFERC

FERC


3

FERC Organizational Structure

FERC


4

Major Interstate and Canadian Pipelines and Gas Production Areas

FERC


5

Natural Gas Act

NATURAL GAS ACT

Section 3 Import/Expor

t

CaseSpecific

CaseSpecific

BlanketAuthority

Automatic PriorNotice

Section 7(c)Interstate

FERC


6

• 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

Natural Gas Act

• Case Specific Section 7(c) and 3

FERC


7

Transco(323)

Southern (330)

Kern River

(886)

6

North Baja (500)

Tuscarora(96)

Northwest(162,113)

Kern River (282)

Iroquois(70)

TETCO(250)

Northwest(224)

NFS/DTI(150)

GeorgiaStraits (96) 1. Algonquin (285)

2. Islander East (285) 3. Iroquois (85) 4. Columbia (135,270) 5. Algonquin (140) 6. Transcontinental (105)

SCG Pipeline (190)

12

3

4

Northwest(191)

East Tennessee (510)

Tennessee (320)

TETCO (197)

Greenbrier (600)

El Paso (320)

WBI(80)

ANR(220,107,143)

El Paso (140)

TETCO(223)

Cove Point(445)

Ocean Express(842)

7 CheyennePlains (560,170)

9

6. CIG (282,92) 7. CIG (118) 8. TransColorado (125) 9. WIC (116)

8

Calypso(832)

Discovery (150)

Transwestern (375)

5

Trunkline(1,500)

Cheniere Sabine (2,600)

Trunkline(200)

Questar (102) 6

Petal (600)

Major Pipeline Projects Major Pipeline Projects Certificated (MMcf/d)Certificated (MMcf/d)

January 2002 to March 2005January 2002 to March 2005

17.1 BCF/D Total2,911 Miles

FERC


8

Cheniere Corpus Christi(2,600)

Mill River(800)

McMoRan(1,500)

CompassPass

(1,000)

Algonquin BG LNG(500)

PearlCrossing(2,000)

GoldenPass

(2,000)

VistaDel Sol(1,100)

Entrega(EnCana)

(1,500) Logan Lateral

(Texas Eastern)(900)

El Paso(502)

CenterPoint(113)

San Patricio(1,000)

Rendezvous(300)

TransColorado (300) CIG (105)

WIC (350)

Seafarer Pipeline(El Paso) (800)

Dominion Southern

(200)

Northern Border(Chicago III)

(130)

Major Pipeline ProjectsMajor Pipeline ProjectsPending (MMcf/d)Pending (MMcf/d)

March 2005March 2005

17.7 BCF/D Total930 Miles

FERC


9

Copiah (3.3)

SG Resources (12.0)

Seneca(0.8)

Dominion (5.6)

Gulf South (18.5)

Natural(10.7)

Wyckoff(6.0)

KM(6.5)

Caledonia (11.7)

Falcon MoBay (20.0)

County Line (6.0)

Tennessee (5.0)

Copper Eagle(3.2)

EnCana (8.0)

Bluewater(27.0)

Saltville(5.8)

Columbia (12.4)

Pine Prarie (24.0)

Natural (10.0)

Petal (8.0)

Dominion (9.4)

Texas Gas (8.2)

Freebird (6.1)CenterPoint (15.0)

Starks (19.2)Falcon Hill-Lake (3.0)

Liberty (17.0) Petal (5.0)

Port Barre (10.5)

SemGas (5.5)

Storage ProjectsStorage Projects(Capacity in Bcf)(Capacity in Bcf)

March 2005March 2005

Certificated Since 6/1/01

On The HorizonCurrently Pending

Sabine(40.0)

FERC


10

Balancing Interests

People Like... But They Also Want...

Due Process Expedited Process

Smaller Government Effective Government

Less Regulation Assurance of Fair Markets

Market-dictated OutcomesProtection from Market

Dysfunctions, Unexpected Risk,and Unjust Rates

Protection for the Environment andProperty Interests

Ample Supplies ofLow-cost Energy

Due Process Expedited Process

Smaller Government Effective Government

Less Regulation Assurance of Fair Markets

Market-dictated OutcomesProtection from Market

Dysfunctions, Unexpected Risk,and Unjust Rates

Protection for the Environment andProperty Interests

Ample Supplies ofLow-cost Energy

Environmental Review Public Interest Review

Notice of Intent

Data Requests

Analysis

Agency Coordination

Scoping Meetings

& Site Visit

Data Requests

Analysis

Interventions

Protests

Notice of Application

Preliminary Determination

(Optional)

Authorization / Rejection

Tech Conference

(Optional)

Cryogenic Design &

Safety Review

DEIS

FEIS

FERC

Review

Process

(Traditional Process)

LNG

FERC


12

Traditional vs. NEPA Pre-Filing Process

AnnounceOpen

Season

AnnounceOpen

Season

Develop

StudyCorrido

r

DevelopStudy

Corridor

Conduct

Scoping

Conduct

Scoping

0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

Review DraftResource Reports& Prepare DEIS

IssueDraftEIS

IssueDraftEIS

FileAt

FERC

IssueOrder

IssueOrder

FileAt

FERC

Prepare ResourceReports

Prepare ResourceReports

IssueFinalEIS

IssueFinalEIS

(months)

Traditional - Applicant

Traditional - FERC

NEPA Pre-Filing - Applicant

NEPA Pre-Filing - FERC

FERC


13

NPC Study

•Align the conflicting policies

– - Policies that encourage

consumption

– - Policies that inhibit gas supply

FERC


14

LNG – Two Points

• Natural gas is the economic/environmental fuel of choice.• 96% of natural gas reserves are outside North America.

FERC


15

Middle East42%

North America4%

Western Europe3%

Central & South America

4%

Asia & Oceania7%

Africa7%

Eastern Europe & Former U.S.S.R.

33%

How Much Natural GasIs Out There?

Source: EIA, World Oil

Total World Gas Reserves as of 1/1/03: 6,127 Trillion Cubic Feet

FERC


16

Where Are the Export Facilities?


16

• LNG supply growing• Multiple LNG supply proposals announced• Long term LNG supply outlook robust

Global LNG Supply

WORLD PROVEDRESERVES 2003:

6,127 TCF

NORTH AMERICARESERVES4%

Source: Cedigaz, NPC

ExistingUnder ConstructionProposed

Global LNG Supply Facilities

FERC


17

Nat

ura

l G

as P

ipel

ines

Storage and Vaporization

Facility

Liquefaction and Storage

Facility

Natu

ral Gas P

rod

uctio

n

Do

ck

Do

ck

LNG Supply Stream -- From Production to Distribution

Economic Oversight – Access to LNG Terminal

AOpen Access At

Delivery of Liquid to Terminal

LNGSuppliers

LNGBuyers

AB

BOpen Access At

Delivery of Vapor into Interstate Pipeline

System

Liquid to Vapor Flow

FERC


18

FERC


19

24

26

CONSTRUCTEDA. Everett, MA : 1.035 Bcfd (Tractebel - DOMAC)B. Cove Point, MD : 1.0 Bcfd (Dominion - Cove Point LNG)C. Elba Island, GA : 0.68 Bcfd (El Paso - Southern LNG)D. Lake Charles, LA : 1.0 Bcfd (Southern Union - Trunkline LNG)E. Gulf of Mexico: 0.5 Bcfd, (Gulf Gateway Energy Bridge - Excelerate Energy)APPROVED BY FERC1. Lake Charles, LA: 1.1 Bcfd (Southern Union - Trunkline LNG) 2. Hackberry, LA : 1.5 Bcfd, (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. Elba Island, GA: 0.54 Bcfd (El Paso - Southern LNG)APPROVED BY MARAD/COAST GUARD8. Port Pelican: 1.6 Bcfd, (Chevron Texaco)9. Louisiana Offshore : 1.0 Bcfd (Gulf Landing - Shell)PROPOSED TO FERC10. Fall River, MA : 0.8 Bcfd, (Weaver's Cove Energy/Hess LNG)11. Long Beach, CA : 0.7 Bcfd, (Mitsubishi/ConocoPhillips - Sound Energy Solutions)12. Corpus Christi, TX : 2.6 Bcfd, (Cheniere LNG)13. Corpus Christi, TX : 1.0 Bcfd (Vista Del Sol - ExxonMobil)14. Sabine, TX : 1.0 Bcfd (Golden Pass - ExxonMobil)15. Logan Township, NJ : 1.2 Bcfd (Crown Landing LNG - BP)16. Bahamas : 0.5 Bcfd, (Seafarer - El Paso/FPL )17. Corpus Christi, TX: 1.0 Bcfd (Ingleside Energy - Occidental Energy Ventures)18. Providence, RI : 0.5 Bcfd (Keyspan & BG LNG) 19. Port Arthur, TX: 1.5 Bcfd (Sempra)20. Cove Point, MD : 0.8 Bcfd (Dominion)21. LI Sound, NY: 1.0 Bcfd (Broadwater Energy - TransCanada/Shell)22. Pascagoula, MS: 1.0 Bcfd (Gulf LNG Energy LLC)23. Bradwood, OR: 1.0 Bcfd (Northern Star LNG - Northern Star Natural Gas LLC)24. Pascagoula, MS: 1.3 Bcfd (Casotte Landing - ChevronTexaco)25. Cameron, LA: 3.3 Bcfd (Creole Trail LNG - Cheniere LNG)26. Port Lavaca, TX: 1.0 Bcfd (Calhoun LNG - Gulf Coast LNG Partners)PROPOSED TO MARAD/COAST GUARD27. California Offshore: 1.5 Bcfd (Cabrillo Port - BHP Billiton)28. So. California Offshore : 0.5 Bcfd, (Crystal Energy)29. Louisiana Offshore : 1.0 Bcfd (Main Pass McMoRan Exp.)30. Gulf of Mexico: 1.0 Bcfd (Compass Port - ConocoPhillips)31. Gulf of Mexico: 2.8 Bcfd (Pearl Crossing - ExxonMobil)32. Gulf of Mexico: 1.5 Bcfd (Beacon Port Clean Energy Terminal - ConocoPhillips)POTENTIAL SITES IDENTIFIED BY PROJECT SPONSORS33. Coos Bay, OR: 0.13 Bcfd, (Energy Projects Development)34. Somerset, MA: 0.65 Bcfd (Somerset LNG)35. California - Offshore: 0.75 Bcfd, (Chevron Texaco)36. Pleasant Point, ME : 0.5 Bcf/d (Quoddy Bay, LLC)37. St. Helens, OR: 0.7 Bcfd (Port Westward LNG LLC)38. Offshore Boston, MA: 0.8 Bcfd (Northeast Gateway - Excelerate Energy)39. Galveston, TX: 1.2 Bcfd (Pelican Island - BP)40. Philadelphia, PA: 0.6 Bcfd (Freedom Energy Center - PGW)41. Astoria, OR: 1.0 Bcfd (Skipanon LNG - Calpine)42. Freeport, TX: 1.5 Bcfd, (Cheniere/Freeport LNG Dev. - Expansion)43. Offshore Boston, MA: 0.4 Bcfd (Neptune LNG - Tractebel)CANADIAN APPROVED AND POTENTIAL TERMINALS44. St. John, NB : 1.0 Bcfd, (Canaport - Irving Oil)45. Point Tupper, NS 1.0 Bcf/d (Bear Head LNG - Anadarko)46. Quebec City, QC : 0.5 Bcfd (Project Rabaska - Enbridge/Gaz Met/Gaz de France)47. Rivière-du- Loup, QC: 0.5 Bcfd (Cacouna Energy - TransCanada/PetroCanada)48. Kitimat, BC: 0.61 Bcfd (Galveston LNG)49. Prince Rupert, BC: 0.30 Bcfd (WestPac Terminals)50. Goldboro, NS 1.0 Bcfd (Keltic Petrochemicals)MEXICAN APPROVED AND POTENTIAL TERMINALS51. Altamira, Tamulipas : 0.7 Bcfd, (Shell/Total/Mitsui)**52. Baja California, MX : 1.0 Bcfd, (Sempra & Shell)** 53. Baja California - Offshore : 1.4 Bcfd, (Chevron Texaco)54. Lázaro Cárdenas, MX : 0.5 Bcfd (Tractebel/Repsol)55. Puerto Libertad, MX: 1.3 Bcfd (Sonora Pacific LNG)

Existing, Proposed and Potential North American

LNG Terminals

As of March 25, 2005

FERC

A

3 4

44

16

51

12

2711

29

28

4546

36

54

9

52

53

18

B

35

33

1

20

47

3017

55

US Jurisdiction

FERC US Coast Guard

4948

* US pipeline approved; LNG terminal pending in Bahamas** These projects have been approved by the Mexican and Canadian authorities

50

22

1034214015

25

41

7C

2D,1

1914

31

328

5,4213

6

39

4338

2337

E


20

Pleasant Point, ME (36)

Everett, MA (A)

Providence, RI (18)

Offshore Boston - Tractebel (43)

Fall River, MA (10)

Somerset, MA (34)

Legend:

Existing Terminal

Approved Terminal

Proposed Terminal: Pre-Filing

Proposed Terminal: Filed

Working on DEIS

Working on FEIS

Potential Terminal

North East LNG Terminals

March 31, 2005

Offshore Boston - Excelerate (38)


21

Legend:

Existing Terminal

Approved Terminal



Working on DEIS

Working on FEIS

Potential TerminalCove Point, MD (B/20)

Logan Township, NJ (15)

Mid-Atlantic LNG Terminals

Long Island Sound, NY (21)

Philadelphia, PA (40)

March 31, 2005


22

South East LNG Terminals

Elba Island, GA (C/7)

Bahamas (3/4/16)

Legend:

Existing Terminal

Approved Terminal



Working on DEIS

Working on FEIS

Potential Terminal

(Pipelines only)

March 31, 2005


23

Corpus Christi, TX (12) Vista Del Sol (13) Ingleside LNG (17)

Lake Charles, LA (D/1)

Port Pelican (8)

Pearl Crossing (31)

Freeport, TX (5/42)

Golden Pass (14)

Port Lavaca, TX (26)

Port Arthur (19)

Sabine Pass, LA (6)

Gulf Coast LNG Terminals

Freeport McMoran (29)

Hackberry (2)

Gulf Landing (9)

Compass Port (30)

Legend:

Existing Terminal

Approved Terminal



Working on DEIS

Working on FEIS

Potential Terminal

Galveston, TX (39)

Pascagoula, MS (22/24)

Cameron (25)

BeaconPort (32)

March 31, 2005

Gulf Gateway (E)


24

Long Beach, CA (11)California Offshore (27/28/35)

Southwest LNG Terminals

Chevron Texaco (35)

BHP Billiton (27)

Crystal Energy (28)

Legend:

Existing Terminal

Approved Terminal



Working on DEIS

Working on FEIS

Potential Terminal

March 31, 2005

FERC


25 Office of Energy Projects

25

North West LNG Terminals

Coos Bay, OR (33)

Bradwood, OR, Northern Star(23)

Legend:

Existing Terminal

Approved Terminal



Working on DEIS

Working on FEIS

Potential Terminal

Astoria, OR (41)

St. Helens, OR (37)

March 31, 2005

FERC


26

LNG Properties andSafety

• LNG is natural gas that in its liquid state at -259º Fahrenheit - it is commonly stored and shipped at slightly above atmospheric pressure.

• LNG is odorless, colorless, non-toxic - it neither explodes nor burns as a liquid.

• LNG vapors are flammable only in concentrations of 5% to 15% with air and will not explode in an unconfined environment - the ignition temperature is more than 500º Fahrenheit higher than gasoline.

• In the past 40 years there have been more than 33,000 LNG ship voyages without a significant accident or cargo spillage.

FERC


27

LNG TerminalSiting Issues

•Safety•Take Away Capacity•Local acceptance•Federal and State approvals

FERC


28

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

Opportunities for Public Involvement

FERC


29

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

Opportunities for PublicInvolvement

FERC


30

Recent Events

• ABS Study• Skikda Accident• Reorganization for Safety• Fire Marshal Interaction• Sandia Study• Regional Planning

FERC


31

Outlook/Issues Associatedwith LNG Development

• States are attempting to assert economic jurisdiction in the post-Hackberry environment.

• Disinformation about safety.• Legislative/Judicial Action

FERC


32

US Natural Gas Balance

-10

0

10

20

30

40

50

60

70

80

90

100

00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20

Years (beginning in 2000)

Vo

lum

e (

Bc

f p

er d

ay

)

Total Production Canada

Existing Terminals Approved Terminals (FERC & Coast Guard)

Proposed and Planned Terminals (FERC & Coast Guard) Net Exports to Mexico

Alaska (to Lower 48) Demand - US

lng: regulatory and regional considerations the energy council’s lng/cng workshop biloxi,...

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