hot button issues and priorities sga fall leadership conference
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Hot Button Issues and Priorities SGA Fall Leadership Conference. October 16, 2007. Section 311 (Revised NGA § 3, new § 3A) FERC: Exclusive Authority Codifies Hackberry Policy Mandatory Pre-filing State and Local Considerations. Section 313 (Revised NGA §§ 15, 19) - PowerPoint PPT PresentationTRANSCRIPT
Robert Cupina, Principal Deputy Director
Office of Energy Projects
Federal Energy Regulatory Commission
Hot Button Issues and Priorities
SGA Fall Leadership Conference
October 16, 2007
October 16, 2007 Federal Energy Regulatory Commission 2
EPAct 2005 and LNGEPAct 2005 and LNG
Section 311
(Revised NGA § 3, new § 3A)
FERC: Exclusive Authority
Codifies Hackberry Policy
Mandatory Pre-filing
State and Local Considerations
Section 313
(Revised NGA §§ 15, 19)
FERC acts as lead agency; sets schedule
FERC maintains consolidated record
Judicial streamlining
October 16, 2007 Federal Energy Regulatory Commission 3
What Has FERC Done WithWhat Has FERC Done WithEPAct Gas Mandates?EPAct Gas Mandates?
Order No. 665 (Pre-filing)
NOPR: August 26, 2005
Final Rule: October 7, 2005
Order No. 687 (Coordination/Consolidation)
NOPR: May 18, 2006
Final Rule: October 19, 2006Order No.687
Order
No.
665
October 16, 2007 Federal Energy Regulatory Commission 4
Pre-Filing ProcessPre-Filing Process
Pre-filing process must begin at least six months prior to filing an application.
Pre-filing procedures are designed to encourage cooperation with state and local authorities.
October 16, 2007 Federal Energy Regulatory Commission 5
During Pre-filingDuring Pre-filing
Staff issues scoping notice. Sponsor attends and participates in scoping meetings.
Sponsor files monthly reports on project activities. Staff facilitates identification of issues and reviews draft resource reports.
Staff conducts site visits and agency meetings. Sponsor attends. Staff begins preparing environmental document.
October 16, 2007 Federal Energy Regulatory Commission 6
Gas Project Scheduling/CoordinationGas Project Scheduling/CoordinationEPAct MandateEPAct Mandate
Section 313 - Process Coordination
Revised Sections 15 and 19 of NGA
• FERC acts as lead agency; sets schedule
• FERC maintains consolidated record
• Streamlines judicial review
Order No. 687 issued by FERC on October 19, 2006
Final rule sets schedule/consolidation procedures
• When filed, applicant must ID all needed Federal authorizations
• 90 days after notice date, FERC issues notice of schedule or EA
• 90 days after EA or EIS is the deadline for other agencies
• 30 days after deadline expiration, each agency must file a copy of decision and an index of the record for inclusion in the FERC record.
October 16, 2007 Federal Energy Regulatory Commission 7
FERC and TransmissionFERC and TransmissionEPAct MandateEPAct Mandate
Section 1241 - Transmission Infrastructure Investment
New Section 219 of the FPA
FERC directed to develop incentive-based rate treatments for transmission
Order No. 679 issued by FERC on July 20, 2006
Provides for an expedited, case-by-case analysis of incentives needed to support new investment in transmission.
October 16, 2007 Federal Energy Regulatory Commission 8
FERC and TransmissionFERC and TransmissionEPAct MandateEPAct Mandate
Section 1221 - Siting of Interstate Electric Transmission Facilities
New Section 216 of the FPA
FERC given authority to site interstate transmission after attempting to site at state level
• Must be in corridors designated by DOE
• Must render decision within 12 months of filing date
DOE delegated lead agency authority to FERC
MOU signed with DOE and seven other federal agencies to coordinate processing.
Order No. 689 issued by FERC on November 16, 2006
Final rule provides direction for filing an application
• Pre-filing process
• Application process
October 16, 2007 Federal Energy Regulatory Commission 9
All Sources of Supply Needed to Meet DemandAll Sources of Supply Needed to Meet Demand
Source: EIA, EEA, FERC
0
10
20
30
40
50
60
70
80
2004 2007 2010 2013 2016 2019 2022 2025
Billion C
ubic
Feet
per
Day
NET PIPELINE IMPORTS
85% 71%
12% 5%
LNG IMPORTS17%
3%
ALASKAN GAS
7%
LOWER 48 PRODUCTION
Bil
lio
n C
ub
ic F
eet
per
day
October 16, 2007 Federal Energy Regulatory Commission 10
Top LNG ImportersTop LNG Importersfor 2006for 2006
Source: BP Website – Trade Movements 2006
Bil
lio
n C
ub
ic F
eet
per
day
October 16, 2007 Federal Energy Regulatory Commission 11
Operating Regasification CapacityOperating Regasification CapacityWill Increase by 10XWill Increase by 10X
U.S. RegasificationCapacity
Atlantic Basin Liquefaction Capacity
0
5
10
15
20
Bcf
per
day
Includes RegasFacilities UnderConstruction
Source: FERC, CERA
20
15
10
5
0
Bcf
/Day
2000 2002 2004 2006 2008 2010
October 16, 2007 Federal Energy Regulatory Commission 12
Top LNG ImportersTop LNG Importers2007-20152007-2015
Source: CERA
October 16, 2007 Federal Energy Regulatory Commission 13
Storage Capacity in Major LNG Importing Storage Capacity in Major LNG Importing Countries: Atlantic BasinCountries: Atlantic Basin
Source: Data from IGU 23rd World Gas Conference-WGC 2006
Working Gas Capacity
(Tcf)
United States 3.56
Italy 0.61
France 0.41
United Kingdom 0.11
Spain 0.07
Belgium 0.02
Mexico 0.00
October 16, 2007 Federal Energy Regulatory Commission 14
All Storage ProjectsAll Storage Projects(Capacity in Bcf)(Capacity in Bcf)
Falcon MoBay (50.0)
County Line (6.0)
Bluewater(29.2)
Columbia (12.4)
Natural (10.0)
Dominion (9.4)
Texas Gas (8.2)
Freebird (6.1)CenterPoint (3.0)
Starks (19.2)
Falcon Hill-Lake (3.0)
Liberty (17.6) Petal (9.0)
SemGas (5.5)
Falcon Worsham-Steed (8.0)
Unocal Windy Hill(6.0)
Natural (10.0)
Bobcat (12.0,1.5)
Dominion (18.0)
Caledonia (11.7) Caledonia (1.7)
Arizona Natural Gas(3.5)
ANR Pipeline(14.7)
Mississippi Hub (12.0)
Leaf River Energy (24.0)
Central NY (13.0)
Dominion (4.4)
Floridian Natural (8.0)
SG Resources (12.0)
Northern Natural(8.5)
Petal (2.8)
ANR Pipeline(17.0)
Texas Gas (11.3)
Texas Eastern (3.0)
Gulf South (1.2)
Egan Hub (8.0)
Liberty (5.0)
Enstor-Waha Storage (7.2)
Four Mile Creek (8.0)
ANR Pipeline (70.0)
Tres Palacios (36.0)
Black Bayou (15.0)
CIG (7.0)
Southeast Storage (14.0)
Copiah (12.2)Enterprise (10.0)
PetroLogistics (6.0)
AGL (12.0)Enstor (30.0)
Steckman Ridge (12.0)
Columbia (15.0)
Tenasda (17.5)Northern Natural (6.0) Texas Gas (8.25)
Northern Natural(2.1)
Monroe Gas (12.0)
Columbia (5.7)
Pine Prairie (16.0)
Natural (10.2)
Bobcat (2.1, 9.4)
Dominion (11.0)Chestnut Ridge (25.0)
On The Horizon
Certificated Since 1/1/05Currently Pending
Pre-Filing
October 16, 2007 Federal Energy Regulatory Commission 15
August FERC Report on AlaskaAugust FERC Report on Alaska
The State of Alaska has enacted and begun to implement its Alaska Gasline Inducement Act (AGIA);
The U.S. Court of Appeals, DC Circuit upheld the Commission’s open season regulations;
The Federal Coordinator has been active in discussions with project stakeholders;
The U.S. Department of Labor has issued a grant to the state for pipeline worker training;
FERC Commissioners and Staff continue to prepare for the filing of any applications for an Alaskan gas pipeline; and
FERC Staff has toured potential routes of the pipeline.
October 16, 2007 Federal Energy Regulatory Commission 16
Recent, Current andRecent, Current andFuture EventsFuture Events
Alaska Gasline Inducement Act-AGIA(5/07)
Open, Competitive Process for Projects
Financial Incentives to Pipeline and Producers
Five delivery points and construction-hiring offices in Alaska
Application Review Criteria
Seven specific criteria related to timeliness, cost overruns, expansions, rates/tariff, amount of state money, feasibility, sponsor’s ability
Request for Applications-RFA Process (7/07)
Deadline November 30, 2007
October 16, 2007 Federal Energy Regulatory Commission 17
Next AGIA StepsNext AGIA Steps
Applications Filed (11/07)
Applications determined complete
Public notice of applications 60 days
Alaska commissioners’ recommendation to legislature for 60-day review
License issued (4/08)
October 16, 2007 Federal Energy Regulatory Commission 18
Next FERC Steps for AGIA ProjectNext FERC Steps for AGIA Project
Begin Pre-Filing and FERC Certificate Application Development
Parallel Activities of Staff and Sponsor
Complete Capacity Open Season
October 16, 2007 Federal Energy Regulatory Commission 19
Natural Gas Reserves in the U.S.Natural Gas Reserves in the U.S.
Source: Based on data from EIA Annual Energy Outlook
Offshore Gulf of Mexico, TX & LAOffshore Gulf of Mexico, TX & LA
TX & LATX & LA
RockiesRockies
Other U.S. ReservesOther U.S. Reserves
Source: Based on data from EIA US Crude Oil, Natural Gas, Natural Gas Liquids Reserves 2005
October 16, 2007 Federal Energy Regulatory Commission 20
Major Pipeline Projects Major Pipeline Projects Certificated (MMcf/d)Certificated (MMcf/d) January 2007 to October 2007January 2007 to October 2007
21.5 Bcf/D Total2,366 Miles
12.6 BCF/D Total903 Miles
Gulf South (1,700, 560)
Gulfstream (345, 155)
Natural (200)
Sonora (1,000)
KM (360)
Southeast Supply (1,140)
Elba Express (1,175)
Point Comfort (1,000)
NorthBaja
( 2,700)
Gulf LNG(1,500)
Phase IV(Maritimes)
(418)Northern Lights(Northern Natural)
(374)
Transco(165)
Rockies Express West (1,800)
Questar Overthrust (750)
TransColorado (250)
Questar (175)
Trunkline(510)
CenterPoint(280)
WIC (556)
TETCO(150)
Kinder Morgan (3,395)
Algonquin(800)
October 16, 2007 Federal Energy Regulatory Commission 21
Broadwater Pipeline
(Broadwater) (1,000)
Bradwood Landing(NorthernStar)
(1,300)
Phoenix Lateral(Transwestern) (500)
GII Project(Guardian Pipeline)
(537)
Quoddy Bay(2,000)
Downeast(500)
Mid-Atlantic Express(1,500)High Plains Expansion
(CIG)(899)
Port Dolphin (1,200)
Rockies Express REX East(Rockies Express Pipeline)
(1,800)
Medicine Bow Expansion (WIC) (330)
Gulf Crossing Pipeline(Boardwalk)
(1,732) Cedar Bayou
(Texas Eastern)(360)
Fayetteville/Greenville(Texas Gas)
(1,609)
Pacific Connector(Williams Pacific)
(1,000)
08/09 Expansion(Iroquois)
(200)
Mid-Continent Express(1,500)
Major Pipeline ProjectsMajor Pipeline ProjectsPending (MMcf/d)Pending (MMcf/d)
October 2007October 2007
17.97 BCF/D Total2,798 Miles
October 16, 2007 Federal Energy Regulatory Commission 22
3.31 BCF/D Total604 Miles
Major Pipeline ProjectsMajor Pipeline ProjectsPre-Filing (MMcf/d)Pre-Filing (MMcf/d)
October 2007October 2007
Sentinel Expansion(Transcontinental)
(151)
East End Expansion(Ozark)(1,000)
Brookhaven Lateral(Iroquois)
(80)
2009 Expansion(Eastern Shore)
(60)Yuma Lateral(North Baja)
(81)
Palomar Project(Palomar Gas)
(700)
Tontitown Project(CenterPoint)
(90)
HubLine Expansion(Algonquin)
(1,145)
October 16, 2007 Federal Energy Regulatory Commission 23
Source: Platts PowerMap
Interstate natural gas pipelines in proximity to
the Barnett and Fayetteville Shale
October 16, 2007 Federal Energy Regulatory Commission 24
Barnett ShaleFort Worth Basin
Fayetteville ShaleArkoma Basin
Ozark Gas TransmissionEast End Expansion
1,000 MMcf/d
CenterPoint EnergyCarthage to Perryville
1,237 MMcf/d*
Gulf South PipelineEast Texas to Mississippi
1,700 MMcf/d & 560 MMcf/d**
Natural Gas PipelineLouisiana Line200 MMcf/d**
BoardwalkGulf Crossing1,732 MMcf/d
Midcontinent1,500 MMcf/d
Texas Gas TransmissionFayetteville/Greenville
1,609 MMcf/d
Ozark Gas Transmission70 MMcf/d
CenterPoint EnergyCarthage to Perryville (Phase III)
280 MMcf/d**
Approved & Proposed Pipelines to Move Barnett and
Fayetteville Shale
* In-Service** Approved Source: Platts PowerMap
October 16, 2007 Federal Energy Regulatory Commission 25
Southern LNGElba Island, GA.
Elba Express Pipeline
With the approval of Elba Express Pipeline and the commencement of service (Phase I) of the Cypress pipeline in May 2007, LNG volumes from Elba Island will be available to Florida and the Northeast.
Source: Platts PowerMap
October 16, 2007 Federal Energy Regulatory Commission 26
Capacity ReleaseCapacity ReleaseRM06-21-000 & RM07-4-000RM06-21-000 & RM07-4-000
Petitions filed in 2006 asking that FERC:
Remove the maximum rate cap on capacity releases
Clarification of capacity release rules vis-à-vis portfolio management services
FERC issued a request on January 3, 2007 for comments asking:
Should the maximum rate cap be lifted?
Should the Commission’s shipper-must-have-title requirement be modified?
Comments were due by April 11, 2007.
October 16, 2007 Federal Energy Regulatory Commission 27
RM07-10 Market Transparency, April 19, 2007
Intrastate pipeline daily posting of capacity at major receipt/delivery points
Buyers and sellers report annual numbers and volumes of relevant transactions
RM07-1 Standards of Conduct, January 18, 2007
Comply with National Fuel decision
Asset managers = marketing affiliates
Competitive Markets and Market ManipulationCompetitive Markets and Market Manipulation
October 16, 2007 Federal Energy Regulatory Commission 28
Comprehensive Energy Oversight ProgramComprehensive Energy Oversight Program
RM07-9 FERC Form 2, February 15, 2007
Gas, Oil, Electric forms included
Sufficient information to determine company’s rates, excess fuel retention?
Monitor Markets Daily
Review and Analyze Data
Provide Feedback to the Commission
Disseminate Information
Audits
October 16, 2007 Federal Energy Regulatory Commission 29
Composition of Proxy Groups for Composition of Proxy Groups for Determining Return on EquityDetermining Return on Equity
PL07-2, July 19, 2007
Fewer and fewer diversified natural gas companies
Inclusion of MLPs
Consumer safeguards
Distributions vs. depreciation
October 16, 2007 Federal Energy Regulatory Commission 30
Conclusions
Commission implementing EPAct mandates
U.S. needs gas from diverse sources
High level of gas-related activity at FERC
State of the Natural Gas Industry Conference November 6 (AD07-15)