1. LNG: Regulatory and Regional Considerations The Energy Council’s LNG/CNG Workshop Biloxi, Mississippi April 8, 2005 Robert Cupina, Deputy Director, Office of Energy Projects

2. FERC Office of Energy Projects 2 FERC Helping Markets Work Adequate Infrastructure OEP Effective Market Rules OMTR Market Oversight OMOI Competitive Market FERC

3. Office of Energy Projects 3 FERC Organizational Structure

4. FERC Office of Energy Projects 4 Major Interstate and Canadian Pipelines and Gas Production Areas

5. FERC Office of Energy Projects 5 Natural Gas Act NATURAL GAS ACT Section 3 Import/Export Case Specific Case Specific Blanket Authority Automatic Prior Notice Section 7(c) Interstate

6. FERC Office of Energy Projects 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

7. FERC Office of Energy Projects 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) Georgia Straits (96) 1. Algonquin (285) 2. Islander East (285) 3. Iroquois (85) 4. Columbia (135,270) 5. Algonquin (140) 6. Transcontinental (105) SCG Pipeline (190) 1 2 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 Cheyenne Plains (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 Certificated (MMcf/d) January 2002 to March 2005 17.1 BCF/D Total 2,911 Miles

8. FERC Office of Energy Projects 8 Cheniere Corpus Christi (2,600) Mill River (800) McMoRan (1,500) Compass Pass (1,000) Algonquin BG LNG (500) Pearl Crossing (2,000) Golden Pass (2,000) Vista Del 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 Projects Pending (MMcf/d) March 2005 17.7 BCF/D Total 930 Miles

9. FERC Office of Energy Projects 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 Projects (Capacity in Bcf) March 2005 Certificated Since 6/1/01 On The Horizon Currently Pending Sabine (40.0)

10. FERC Office of Energy Projects 10 Balancing Interests

11. Environmental ReviewPublic 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

12. FERC Office of Energy Projects 12 Traditional vs. NEPA 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 NEPA Pre-Filing - Applicant NEPA Pre-Filing - FERC

13. FERC Office of Energy Projects 13 NPC Study Align the conflicting policies –- Policies that encourage consumption –- Policies that inhibit gas supply

14. FERC Office of Energy Projects 14 LNG – Two Points Natural gas is the economic/environmental fuel of choice. 96% of natural gas reserves are outside North America.

15. FERC Office of Energy Projects 15 How Much Natural Gas Is Out There? Source: EIA, World Oil Total World Gas Reserves as of 1/1/03: 6,127 Trillion Cubic Feet

16. FERC Office of Energy Projects 16 Where Are the Export Facilities? Office of Energy Projects 16 LNG supply growing Multiple LNG supply proposals announced Long term LNG supply outlook robust Global LNG Supply WORLD PROVED RESERVES 2003: 6,127 TCF NORTH AMERICA RESERVES 4% Source: Cedigaz, NPC Existing Under Construction Proposed Global LNG Supply Facilities

17. FERC Office of Energy Projects 17 Natural Gas Pipelines Storage and Vaporization Facility Liquefaction and Storage Facility Natural Gas Production Dock LNG Supply Stream -- From Production to Distribution

18. 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 18

19. FERC Office of Energy Projects 19 24 26 CONSTRUCTED A. 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 FERC 1. 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 GUARD 8. Port Pelican: 1.6 Bcfd, (Chevron Texaco) 9. Louisiana Offshore : 1.0 Bcfd (Gulf Landing - Shell) PROPOSED TO FERC 10. 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 GUARD 27. 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 SPONSORS 33. 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 TERMINALS 44. 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 TERMINALS 51. 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 27 11 29 28 45 46 36 54 9 52 53 18 B 35 33 1 20 47 30 17 55 US Jurisdiction FERC US Coast Guard 49 48 * US pipeline approved; LNG terminal pending in Bahamas ** These projects have been approved by the Mexican and Canadian authorities 50 22 10 34 21 40 15 25 41 7 C 2 D,1 19 14 31 32 8 5,42 13 6 39 43 38 23 37 E

20. Office of Energy Projects 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. Office of Energy Projects 21 Legend: Existing Terminal Approved Terminal Proposed Terminal: Pre-Filing Proposed Terminal: Filed Working on DEIS Working on FEIS Potential Terminal Cove Point, MD (B/20) Logan Township, NJ (15) Mid-Atlantic LNG Terminals Long Island Sound, NY (21) Philadelphia, PA (40) March 31, 2005

22. Office of Energy Projects 22 South East LNG Terminals Elba Island, GA (C/7) Bahamas (3/4/16) Legend: Existing Terminal Approved Terminal Proposed Terminal: Pre-Filing Proposed Terminal: Filed Working on DEIS Working on FEIS Potential Terminal (Pipelines only) March 31, 2005

23. Office of Energy Projects 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 Proposed Terminal: Pre-Filing Proposed Terminal: Filed Working on DEIS Working on FEIS Potential Terminal Galveston, TX (39) Pascagoula, MS (22/24) Cameron (25) Beacon Port (32) March 31, 2005 Gulf Gateway (E)

24. Office of Energy Projects 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 Proposed Terminal: Pre-Filing Proposed Terminal: Filed Working on DEIS Working on FEIS Potential Terminal March 31, 2005

25. FERC Office of Energy Projects 25 Office of Energy Projects 25 North West LNG Terminals Coos Bay, OR (33) Bradwood, OR, Northern Star(23) Legend: Existing Terminal Approved Terminal Proposed Terminal: Pre-Filing Proposed Terminal: Filed Working on DEIS Working on FEIS Potential Terminal Astoria, OR (41) St. Helens, OR (37) March 31, 2005

26. FERC Office of Energy Projects 26 LNG Properties and Safety 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.

27. FERC Office of Energy Projects 27 LNG Terminal Siting Issues Safety Take Away Capacity Local acceptance Federal and State approvals

28. FERC Office of Energy Projects 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

29. FERC Office of Energy Projects 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 Public Involvement

30. FERC Office of Energy Projects 30 Recent Events ABS Study Skikda Accident Reorganization for Safety Fire Marshal Interaction Sandia Study Regional Planning

31. FERC Office of Energy Projects 31 Outlook/Issues Associated with LNG Development States are attempting to assert economic jurisdiction in the post- Hackberry environment. Disinformation about safety. Legislative/Judicial Action

32. FERC Office of Energy Projects 32 US Natural Gas Balance