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

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Federal Energy Regulatory Commission

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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

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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

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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

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Project Evaluation

How Does FERC Evaluate All Of These Major Projects? What Are The Criteria Used in This Evaluation?

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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 Filed Parallel Processing Paths 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 Order Issued

Certificate Policy Statement

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

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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

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Balancing Interests
P e o p le L ik e ...
D ue Process

B u t T h e y A ls o W a n t...
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 D ysfunctio ns, U nexpecte d R isk, an d Un just R ates A m ple Supp lies of Low -cost Energy

M arket-dictated O utcom es Pro te ction for the Env ironm e nt and Pro perty Interests

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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.

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Major Pipeline Projects Certificated (MMcf/d)
January 2000 to April 2010
21. CIG (282,92) 22. CIG (85,133,118,105,899) 23. TransColorado (125,300,250) 24. WIC (120,116,675,350,556,330,230) 25. El Paso (140) 26. Rendezvous (300) 27. Entrega (1,500) 28. Northwest (450) 29. Rockies Express West (1,800) 30. White River Hub (2,565) 31. Northwest (582) 32. Rockies Express (200) 33. Sundance Trail (Northwest) (150) 34. Diamond Mountain (WIC) (180) 1. Algonquin (285, 131) 2. Islander East (285) 3. Iroquois (230,85, 100, 200) 4. Columbia (135,270) 5. Algonquin (140) 6. Transcontinental (105) 7. Transcontinental (130) 8. Transcontinental (100,142, 250) 9. Columbia (94) 10. Maritimes (80,360,418) 11. Algonquin (301) 12. Tennessee (500) 13. Mill River (800) 14. Tennessee (136) 15. Texas Eastern (900) 16. Algonquin (325) 17. Algonquin (800) 18. Broadwater (1,000) 19. Mid-Atlantic (1,500) 20. Algonquin (140, 281)

Northwest (162,113) NorthernStar (1,300) Pacific Connector (1,000) Northwest (224)

Northern Natural ANR (136) (194,220, 10 Guardian WBI Dominion (700) GTN 107,143,168, (750, 537) (80) 14 20 13 17 (207) Northwest(191) Bison 98) Empire(250) Northern Pipeline 1 11 Natural 16 Millenium (525) 5 (477) (374) 8 32 NFS/DTI (150) Tuscarora (96) Ruby Pipeline 7 18 26 33 24 27 Transco Horizon(380) 12 (1,456) TETCO (150, 150, 455) 32 Trailblazer (209) 6 15 KM (360) 29 Questar Overthrust (324) 19 Dominion 9 TETCO (550, 750, 300) Vector (245,105) 31 30 TETCO (200, 244) 4 (250) (223) 34 Questar (272,102,175) 8 6 21 Cove Point (445,800) 23 Rockies Express East (1,800) Columbia Transco (165) Equitrans Cheyenne 22 28 (172, 100) Midwestern Plains (560,170) Fayetteville (120) (130) Kern River Kern River (282) 25 Express East Tenn. (225) (135,886,145) (2,000) MarkWest (638) East Tenn. (276) East Tenn. (86) Center Southern Trails (120) Point (113,132) Petal TETCO East Tenn. (170) (700,600) (197) El Paso Midcontinent (1500, 300) Transco (204,236,323,309) Transwestern (150,375,500) Texas Gas (1,609, 2,300) (502) Southern/Magolia (82) Otay Mesa (110) Trans Union (430) North Gulf South(1,475, 560, 556) Elba Express (1,175) Trunkline (510) El Paso (230,320,620,150) Baja Gulf Crossing SCG Pipeline (190) Center Point (1,237, 280, 274) (1,732) (500, 81 Discovery (200) Tiger (2,000) 2,700) Cypress (Southern) (500) Southeast Supply(1,140,175, 360) Natural (200,300) McMoRan Cameron TETCO (360) Southern (336,330, 375) Oasis Pipeline (1,500) (1,500,850) Port Arthur (3,000) Transco (600) Florida Gas (239,270,100, 820) (253) Trunkline (200) Gulf LNG (1,500) Point Comfort (1,000) Tennessee (400,200,100) Calypso (832) Dominion South (200) Cheniere Creole Trail (2,000) Ocean Express(842) San Patricio (1,000) Trunkline(1,500) Port Dolphin Kinder Morgan (3,395) (1,200) Sonora (1,000) Gulfstream Golden Pass (2,500) (1,130, 345, 155) Tennessee (320) Cheniere Corpus Christi (2,600) Vista del Sol (1,100)

Northern Border (544,130)

110.24 BCF/D Total 15,747 Miles
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All Storage Projects (Capacity in Bcf)

Dominion (0.1) ANR Pipeline ANR Pipeline (17.0) SemGas (5.5) (14.7) Arlington Storage (7.0,1.4) Magnum Gas NFG (8.5) SourceGas Northern Natural Central NY (13.0) (11.2) (10.4) UGI (14.7) (2.1) Bluewater Dominion (18.0) Dominion (4.4) Magnum Gas Northern Natural (29.2) Steckman Ridge (12.0) Dominion (9.4) (42.0) Blue Sky (4.4) (8.5) UGI LNG (0.2, 1.0) Columbia (5.7) Southern Star Natural (10.0) East Cheyenne (4.0) Chestnut Ridge (25.0) (18.9) KM (1.0) Mississippi ANR Pipeline (70.0) Texas Eastern (3.0) Columbia (6.7) Hub (3.0) Unocal Windy Hill Texas Gas (8.2) Tricor Ten CIG (7.0) Northern (6.0) Texas Gas (11.3) Texas Gas (8.25) Tenasda (17.5) (22.4) 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) Mississippi Hub Natural (10.0) (3.5) Petal (5.0) Four Mile Creek (8.0) (12.0, 15.0) County Line (6.0) CenterPoint (3.0) ANGS/El Paso (20.0) Freebird (6.1) Bobcat (12.0,1.5, 24.0) Bobcat (2.1, 9.3) Natural (10.0) Multifuels (8.0) Caledonia (11.7, 5.2) Enstor-Waha Storage (7.2) Sempra Energy (2.5) AGL (16.0) Leaf River Energy (32.0) Enstor (30.0) Falcon Worsham-Steed (12.0) Spectra Energy (6.5) Falcon MoBay (50.0) Falcon Hill-Lake (3.0) Falcon MoBay (3.2) SG Resources (12.0) Tres Palacios (36.0) Certificated Since 1/1/05 Copiah (12.2) Floridian Natural (8.0) Enterprise (10.0) Starks (19.2) EnergySouth (12.0) Currently Pending SG Resources (16.0) Cadeville (16.4) Petal (10.0) Liberty (17.6, 18.9) Petal (4.0) BCR (15.0) Turtle Bayou (12.0) Pre-Filing Petal (2.8) Perryville Pine Prairie (24.0) Southeast Gas Storage (24.7) Black Bayou (15.0) Egan Hub (8.0) On The Horizon (15.0)PetroLogistics (6.0, 5.3)Henry Gas (46.0) Ryckman Creek (25.0)

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North American LNG Import Terminals

Existing

L A F B, I

N

C H,K D G J E M

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) E. Gulf of Mexico: 0.5 Bcfd, (Gulf Gateway Energy Bridge - Excelerate Energy) F. Offshore Boston: 0.8 Bcfd, (Northeast GatewayExcelerate Energy) G. Freeport, TX: 1.5 Bcfd, (Cheniere/Freeport LNG Dev.) 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 Energy) K. Sabine, LA: 1.4 Bcfd (Sabine Pass Cheniere LNG – Expansion)* Canada L. St Johns, NB: 1.0 Bcfd, (Canaport- Irvin Oil)

US Jurisdiction
FERC MARAD/USCG

Mexico M. Altamira, Tamulipas: 0.7 Bcfd, (Shell/Total/Mitsui) N. Baja California, MX: 1.0 Bcfd, (Sempra)

As of April 12, 2010
* Expansion of an existing facility

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North American LNG Import Terminals Approved

APPROVED - UNDER CONSTRUCTION U.S. 1. Sabine, TX: 2.0 Bcfd (Golden Pass - ExxonMobil) 2. Elba Island, GA: 0.9 Bcfd (El Paso - Southern LNG Expansion)* 3. Pascagoula, MS: 1.5 Bcfd (Gulf LNG Energy LLC) 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) 8. Corpus Christi, TX : 1.1 Bcfd (Vista Del Sol - 4Gas) 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) 12. Cameron, LA: 3.3 Bcfd (Creole Trail LNG - Cheniere LNG) 13. Freeport, TX: 2.5 Bcfd (Cheniere/Freeport LNG Dev. Expansion) 14. Hackberry, LA: 0.85 Bcfd (Cameron LNG - Sempra Energy 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) 18. Bradwood, OR: 1.0 Bcfd (Northern Star LNG - Northern Star Natural Gas LLC) 19. Baltimore, MD: 1.5 Bcfd (AES Sparrows Point - AES Corporation) 20. Coos Bay, OR: 1.0 Bcfd (Jordan Cove Energy Project) 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)

24 25

18 20 9 17 11 19

4

2 26 3 10 12 1 13 14 16 7 8 6 15 21 22

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5 As of April 12, 2010
* Expansion of an existing facility

March 24, April 29, 2010 2010

Canada 24. Rivière-du- Loup, QC: 0.5 Bcfd (Cacouna Energy TransCanada/PetroCanada) FERC 25. Quebec City, QC : 0.5 Bcfd (Project Rabaska - Enbridge/Gaz MARAD/USCG Met/Gaz de France) Mexico 26. Baja California, MX : 1.5 Bcfd (Energy Costa Azul - Sempra Expansion) 14 Federal Energy Regulatory Commission

US Jurisdiction

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

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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

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