1. Public Symposium on LNG Bowdoin College Brunswick, Maine Robert J. Cupina, Deputy Director Office of Energy Projects Federal Energy Regulatory Commission July 29, 2004

2. FERC Office of Energy Projects 2 Office of Energy Projects - Functions OEP has the engineering and environmental expertise to:  certificate new gas pipeline projects  Authorize LNG terminals  license and monitor hydroelectric projects, and  analyze energy infrastructure needs and policies. OEP focuses on:  project siting and development,  balancing environmental and other concerns,  ensuring compliance,  safeguarding the public, and  providing infrastructure capacity information.

3. FERC Office of Energy Projects 3 NPC Study Align the conflicting policies –Policies that encourage consumption –Policies that inhibit gas supply

4. FERC Office of Energy Projects 4 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.

5. FERC Office of Energy Projects 5 Historic and Projected US Gas Production and Consumption Source: EIA AEO 2004

6. FERC Office of Energy Projects 6 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

7. FERC Office of Energy Projects 7 What is the answer? Imports Imports must make up the difference between domestic production and consumption Delivered in two ways: – Gaseous form by pipeline – Liquid form by tanker (LNG)

8. FERC Office of Energy Projects 8 How Much Natural Gas Is Out There? Office of Energy Projects 8 LNG supply growing Multiple LNG supply proposals announced Long term LNG supply outlook robust Global LNG Supply WORLD PROVED RESERVES 2002: 6,270 TCF NORTH AMERICA RESERVES 4% Source: Cedigaz, NPC Existing Under Construction Proposed Global LNG Supply Facilities

9. FERC Office of Energy Projects 9 LNG Imports by Country Source: EIA

10. Economic Oversight – Access to LNG Terminal A Open Access At Delivery of Liquid to Terminal LNG Suppliers LNG Buyers A B B Open Access At Delivery of Vapor into Interstate Pipeline System Liquid to Vapor Flow FERC Office of Energy Projects 10

11. FERC Office of Energy Projects 11 Benefits of the New LNG Policy Stimulates development of new LNG terminals Accommodates various business models Increases gas supplies to the U.S. Maintains FERC’s responsibility for environmental and safety reviews.

12. 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.) Proposed Terminals and Expansions – FERC 7. Fall River, MA : 0.8 Bcfd, (Weaver's Cove Energy/Hess LNG) 8. Long Beach, CA : 0.7 Bcfd, (Mitsubishi/ConocoPhillips – Sound Energy Solutions) 9. Corpus Christi, TX : 2.6 Bcfd, (Cheniere LNG Partners) 10. Sabine, LA : 2.6 Bcfd (Cheniere LNG) 11. Corpus Christi, TX : 1.0 Bcfd (Vista Del Sol - ExxonMobil) 12. Sabine, TX : 1.0 Bcfd (Golden Pass - ExxonMobil) 13. Logan Township, NJ : 1.2 Bcfd (Crown Landing LNG – BP) 14. Lake Charles, LA: 0.6 Bcfd (Southern Union – Trunkline LNG) 15. Bahamas : 0.5 Bcfd, (Seafarer - El Paso/FPL ) 16. Corpus Christi, TX: 1.0 Bcfd (Occidental Energy Ventures) 17. Providence, RI : 0.5 Bcfd (Keyspan & BG LNG) 18. Port Arthur, TX: 1.5 Bcfd (Sempra) Proposed Terminals – Coast Guard 19. California Offshore: 1.5 Bcfd (Cabrillo Port – BHP Billiton) 20. Louisiana Offshore : 1.0 Bcfd (Gulf Landing – Shell) 21. So. California Offshore : 0.5 Bcfd, (Crystal Energy) 22. Louisiana Offshore : 1.0 Bcfd (Main Pass McMoRan Exp.) 23. Gulf of Mexico: n/a (Compass Port - ConocoPhillips) 24. Gulf of Mexico : 2.8 Bcfd (Pearl Crossing - ExxonMobil) Planned Terminals and Expansions 25. Brownsville, TX : n/a, (Cheniere LNG Partners) 26. Mobile Bay, AL: 1.0 Bcfd, (ExxonMobil) 27. Somerset, MA : 0.65 Bcfd (Somerset LNG) 28. Belmar, NJ Offshore : n/a (El Paso Global) 29. Altamira, Tamulipas : 1.12 Bcfd, (Shell) 30. Baja California, MX : 1.0 Bcfd, (Sempra & Shell) 31. Baja California - Offshore : 1.4 Bcfd, (Chevron Texaco) 32. California - Offshore : 0.75 Bcfd, (Chevron Texaco) 33. St. John, NB : 0.5 Bcfd, (Canaport – Irving Oil) 34. Point Tupper, NS 1.0 Bcf/d (Bear Head LNG - Access Northeast Energy) 35. Pleasant Point, ME : 0.5 Bcf/d (Quoddy Bay, LLC) 36. Quebec City, QC : 0.5 Bcfd (Project Rabaska - Enbridge/Gaz Met/Gaz de France) 37. Lázaro Cárdenas, MX : 0.5 Bcfd (Tractebel/Repsol) 38. Mobile Bay, AL: 1.0 Bcfd (Cheniere LNG Partners) 39. St. Helens, OR: 0.7 Bcfd (Port Westward LNG LLC) 40. Cove Point, MD : 0.8 Bcfd (Dominion) 41. Puerto Libertad, MX: 1.3 Bcfd (Sonora Pacific LNG) 42. Offshore Boston, MA: 0.8 Bcfd (Northeast Gateway – Excelerate Energy) 43. Kitimat, BC: 0.34 Bcfd (Galveston LNG) 44. Prince Rupert, BC: 0.30 Bcfd (WestPac Terminals) *US pipeline approved; LNG terminal pending in Bahamas Existing and Proposed North American LNG Terminals July 2004 FERC Office of Energy Projects A C 1 3 5 2 4 33 7 28 15 6 25 29 9 19 8 27 22 21 34 36 35 37 20 30 31 11 24 10 12 17 13 B 32 26 14 39 40 16 38 23 18 D 41 US Jurisdiction FERC US Coast Guard 42 44 43

13. FERC Office of Energy Projects 13 Maximum LNG Deliverability Growth

14. FERC Office of Energy Projects 14 US Natural Gas Balance

15. FERC Office of Energy Projects 15 LNG Terminal Siting Issues Safety Take Away Capacity Local acceptance Federal and State approvals

16. FERC Office of Energy Projects 16 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

17. FERC Office of Energy Projects 17 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

18. FERC Office of Energy Projects 18 Local Acceptance Has the project sponsor interacted with the local population? –Entertain concerns –Make adjustments or accommodations to the project.

19. FERC Office of Energy Projects 19 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

20. FERC Office of Energy Projects 20 Primary federal authorization processes for LNG terminals FERC Review Process Pre-Filing Process Coast Guard Process

21. FERC Office of Energy Projects 21 FERC Review Process Public Notice Data Gathering/Analysis DEIS Public Meeting Final EIS Commission Order

22. FERC Office of Energy Projects 22 Traditional vs. Pre-Filing Process Announce Open Season Announce Open Season Develop Study Corridor Develop Study 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 Draft Resource Reports & Prepare DEIS Issue Draft EIS Issue Draft EIS File At FERC Issue Order Issue Order File At FERC Prepare Resource Reports Prepare Resource Reports Issue Final EIS Issue Final EIS (months) Traditional - Applicant Traditional - FERC Pre-Filing - Applicant Pre-Filing - FERC

23. FERC Office of Energy Projects 23 Benefits of Pre-Filing More interactive NEPA process, no shortcuts Earlier, more direct involvement by FERC, other agencies, landowners Goal of “no surprises” Time savings realized only if we are working together with stakeholders FERC staff is an advocate of the Process, not the Project!

24. FERC Office of Energy Projects 24 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

25. FERC Office of Energy Projects 25 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 Public Involvement

26. FERC Office of Energy Projects 26 Maritime Security Act of 2002 (November 2002) Amendment of the Deepwater Port Act of 1974 –Transferred jurisdiction of offshore natural gas facilities from FERC to Maritime Admin- istration and Coast Guard Lowers Regulatory Hurdles –No requirement for open access to terminal –Decision required within 365 days

27. FERC Office of Energy Projects 27 LNG – Where the Action Is What is FERC Doing? –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 –Development of FERC Model for LNG Tanker Release Consequences –Participating in Conferences/Seminars/Tours

28. FERC Office of Energy Projects 28 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 The FERC Staff Study and Its Positive Impacts

29. FERC Office of Energy Projects 29 Natural Gas Pipelines Storage and Vaporization Facility Liquefaction and Storage Facility Natural Gas Production Dock LNG Supply Stream -- From Production to Distribution

30. FERC Office of Energy Projects 30 Outlook/Issues Associated with LNG Development States attempting to assert economic jurisdiction in the post- Hackberry environment Public safety information Interchangeability Importance of timing