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Natural Gas Transmission Networks: So You Want To Build A Pipeline?

Natural Gas Transmission Networks: So You Want To Build A Pipeline?. Raymond James, Infrastructure Office of Energy Projects Federal Energy Regulatory Commission At Wyoming Pipeline Authority Monthly Meeting August 2003 Casper, Wyoming. Natural Gas Industry

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Natural Gas Transmission Networks: So You Want To Build A Pipeline?

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  1. Natural Gas Transmission Networks: So You Want To Build A Pipeline? Raymond James, Infrastructure Office of Energy Projects Federal Energy Regulatory Commission At Wyoming Pipeline Authority Monthly Meeting August 2003 Casper, Wyoming

  2. Natural Gas Industry Interstate transportation rates and services Interstate gas pipeline construction and oversee related environmental matters Electric Power Industry Interstate transmission rates and services Wholesale energy rates and services Corporate transactions, mergers, securities issued by public utilities What Does FERCRegulate?

  3. Oil Pipeline Industry Interstate transportation rates and services of crude oil and petroleum products Hydroelectric Industry Licensing of nonfederal hydroelectric projects Oversee related environmental matters Inspect nonfederal hydropower projects for safety issues What Does FERCRegulate?(con’t)

  4. Regulation of Interstate Construction Natural Gas Policy Act (NGPA) Natural Gas Act (NGA)

  5. NGPA OR NGA? • NGA Certificate Grants a Right of Federal Eminent Domain • NGPA Does Not Confer Any Rights of Federal Eminent Domain; Pipeline May Seek State Eminent Domain

  6. Natural Gas Act NATURAL GAS ACT Section 3 Import/Export Section 7(c) Interstate Case Specific Blanket Authority Case Specific Automatic Prior Notice

  7. Natural Gas Act • Blanket Certificate • AutomaticAuthorization • Cost of facilities is less than $7.6 million • Facilities are “eligible” facilities • Prior Notice • Cost is between $7.5 and $21.2 million • 45-day notice period prior to construction • Facilities are “eligible” facilities

  8. 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

  9. Project Evaluation How Does FERC Evaluate All Of These Major Projects? What Is The Criteria Used in This Evaluation?

  10. PL99-3-000Certificate Policy • Apply Threshold Test • Subsidization  Incremental Rates • No Subsidization  Rolled-in Treatment • System improvements for existing customers  Rolled-in Treatment

  11. PL99-3-000Certificate Policy • Develop Record • Adverse Impacts on • Existing Customers and Pipelines • Landowners • Communities • Specific Benefits • Need and Market • Condemnation Impact

  12. Needs and Benefits Record Adverse Impacts PL99-3-000Certificate Policy • Balance Benefits and Impacts • Complete Traditional Environmental Process

  13. Commission Action on Pipeline Projects in the Rockies • Since mid-1999, the Commission has approved 17 projects to increase pipeline capacity to move gas out of the Rockies • 3.8 Bcf per day of capacity • 1,788 miles of pipeline • 394,689 horsepower of compression

  14. Tuscarora (96) Major Pipeline Projects Certificated (MMcf/d)January 2002 to July 2003 Georgia Straits (96) Northwest (162) Northwest (224) WBI (80) Iroquois(70) 1 Northwest (175) ANR (220) 2 NFS/DTI(150) 3 4 TETCO(250) CIG (272,92) 1. Algonquin (285) 2. Islander East (285) 3. Iroquois (85) 4. Columbia (165,270) Kern River (886) Greenbrier (600) East Tennessee (510) Kern River (282) North Baja (500) TETCO (197) SCG Pipeline (190) Transco (359) El Paso (320) Southern (330) 7.3 BCF/D Total 2,225 Miles Tennessee (320) 1

  15. FERC Interstate Pipeline Capacity Out of Wyoming 0.2 Bcf Note: Williams Gas Pipelines Central Inc. is now Southern Star Central Gas Pipeline. Opal Hub 2.2 Bcf Cheyenne Hub 3.1 Bcf 1 Source: RDI PowerMap and various flow diagrams on file at the FERC. 15

  16. Productive Capacity vs.Pipeline Capacity • EIA shows that the Rockies could produce up to 6 Bcf per day through 2003. • Wyoming Energy Commission shows that the Rockies could produce up to almost 8.0 Bcf per day by 2005 and 11.0 Bcf per day by 2010. • Both of these totals are greater than the current pipeline capacity of the region.

  17. Major Pipeline ProjectsPending (MMcf/d)July 2003 Maritimes (400) Algonquin (200) CIG (118) Texas Eastern (223) Columbia (135) El Paso (140) Cove Point (445) Cheyenne Plains (560) Calypso (832) 4.0 BCF/D Total 580 Miles Ocean Express (842) 1

  18. Major Pipeline Projectsin Pre-filing (MMcf/d)August 2003 Grasslands Expansion (120) (WBI) Weaver’s Cove Energy LNG (400) RubyPipeline(125) Sound Energy Solutions LNG (700) (Mitsubishi) Picacho Pipeline (1,000) Pacific Texas 1.2 BCF/D Total Pipeline Capacity 1.1 BCF/D Deliverability Capacity 1,570 Miles 1

  19. Planned Projects To MoveGas in the Rockies • Staff is aware of 15 projects to move Rockies’ gas that would have a potential capacity of 7.3 Bcf per day. • In addition, there is a project in planning that would reverse flow on a Rockies’ pipeline, allowing for more flexibility in moving Rockies’ gas

  20. NEPA Pre-Filing Guidelines • Applicant Must: • File a written request • Explain reasons and timing considerations • Verify other major state and federal agencies support the process • Describe consultations completed to date

  21. NEPA Pre-Filing Guidelines • Applicant Must: • Propose options for third-party contractor • Agree to file complete application • Preliminary route maps (if possible) • Prepare a Public Participation Plan

  22. You Need a Planfor Public Participation • A Plan is required for NEPA Pre-filing and is strongly encouraged in the traditional process • Must be an intentional Component • The Plan may include setting up a Website, a toll-free 800 telephone number, quarterly newsletter, a commitment to place all filings and information in libraries, and holding community-style “Open Houses”

  23. NEPA Pre-Filing GuidelinesStaff Activities • FERC will assign a PF docket number • Issue a scoping notice • Examine alternatives • Attend site visits and meetings • Initiate preparation of NEPA document • Review draft resource reports

  24. Identify affected parties Landowners Agencies Others Facilitate: Issue identification Study needs Issue resolution NEPA Pre-Filing Guidelines Staff Activities

  25. Timeline Traditional vs. NEPA Pre-filing File At FERC Announce Open Season Develop Study Corridor Prepare Resource Reports Conduct Scoping Issue Draft EIS Issue Final EIS Issue Order Announce Open Season Develop Study Corridor File At FERC Prepare Resource Reports Conduct Scoping Review Draft Resource Reports & Prepare DEIS Issue Draft EIS Issue Final EIS Issue Order 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 (months)

  26. An Example:Kern River Expansion • 716 miles of pipeline looping through CA, NV, UT, WY • 3 New Compressors • $1.2 Billion • 885.6 MMcf/day of additional capacity • Doubles Kern River’s capacity from 845.5 MMcf/day to 1.7 Bcf/day PROPOSED COMPRESSOR STATION PROPOSED PIPELINE LOOPING X

  27. Kern River Expansion Environmental Highlights • Environmentally Acceptable • New pipe parallels initial right-of-way. • Mitigation measures minimize potential impacts. • First Major Project to utilize NEPA Pre-Filing • Order issued less than 1 year from initial filing date - Final EIS completed in June 2002 which was 11 months from filing date. • In comparison, FEIS and certificate for Gulfstream required 16 months from initial filing date; Kern River’s initial greenfield project required 30 months for the FEIS. • Interagency cooperation contributed to meeting Federal and state environmental requirements.

  28. An Example:Greenbrier Project • 279 miles of pipeline through WV, VA, and NC • 2 New Compressors Stations • $0.5 Billion • 600 MMcf/d of new capacity • Order issued 10 months after initial filing • FEIS issued 8 months after initial filing

  29. Benefits of NEPA 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!

  30. What It All Means to You • Things will be perfect forevermore! • Signatory agencies stand ready to assist • Consistent key agency contacts • Increased need for consistent and timely information from project sponsors • Good stakeholder communication is imperative, must be transparent • Better project design, quicker decision process

  31. Contact Raymond E. James raymond.james@ferc.gov 202-502-8588

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