Natural Gas Pipeline Permitting in Pennsylvania Mr. Andrew Paterson VP of Technical and Regulatory, Marcellus Shale Coalition August 1, | MARCELLUS SHALE COALITION

Pipeline Permitting in PA Clean Water Act (federal) Section 404 regulates the discharge of dredged or fill material into waters of the US, including wetlands. It also authorizes the use of general permits should an individual state elect to do so. Pennsylvania has adopted a State Programmatic General Permit, PASPGP-4, which covers activities that are similar in nature and result in no more than minimal individual or cumulative adverse effects on the aquatic environment. Nationwide Permits (NWP) are used in other states. 2 | MARCELLUS SHALE COALITION

Pipeline Permitting in PA Purpose of PASPGP-4 Protect the aquatic resources of the Commonwealth of Pennsylvania. Reduce the administrative burden of duplicative programs and increase efficiency for both the USACE and the PADEP through interagency cooperation. Improve the regulatory response time. Add predictability to the permit program for the applicant and general public. 3 | MARCELLUS SHALE COALITION

Permit Duration Data 4 | MARCELLUS SHALE COALITION

PASPGP-4 vs. NWP Single and Complete Project “Single & Complete Project” – PASPGP-4 is not consistent with NWP: Under PASPGP-4, all crossings associated with a specific project are added together for project categorization and review. Under NWP, each crossing is an independent project that is reviewed separately. 5 | MARCELLUS SHALE COALITION

PASPGP-4 vs. NWP Temporary Impacts PASPGP-4 includes temporary impacts when determining permit categorization. NWP evaluates permanent impacts to waters of the U.S. in the calculation of permit eligibility. It is not necessary to include temporary impacts because by definition, they are mitigated and do not accumulate. 6 | MARCELLUS SHALE COALITION

Temporary Impacts 7 | MARCELLUS SHALE COALITION BeforeAfter

Temporary Impacts 8 | MARCELLUS SHALE COALITION BeforeAfter

Permit Delays Affect on Midstream Pipeline Project Permitting Since fourth Quarter of 2010, the majority of midstream pipeline permits in PA have been classified as “Category III” under PASPGP-4. The average permit processing is in excess of 145 days (compared to the Nationwide Permit Program days). Despite the increase in review time, there has been no change in permitting outcomes or conditions of construction. 9 | MARCELLUS SHALE COALITION

Consequences of Process Due to the backlog of pipeline permits in Pennsylvania, approximately 600 – 700 Marcellus wells remain shut-in, waiting for pipelines. This affects revenue for both the industry and the royalty owners. This also impacts the economy, which is deprived of readily available natural gas as an energy resource. Pennsylvania is at a competitive disadvantage compared to other states. 10 | MARCELLUS SHALE COALITION

Solutions Solutions to Permit Delays Eliminate the overall project concept under PASPGP-4 and limit the interpretation of “single and complete project” to the interpretation provided under the NWP. Monitor cumulative impacts of multiple single and complete projects independently of project review and authorization, as is done under the NWP. Follow the NWP practice of counting permanent impacts only (not temporary impacts) when determining permit categorization under PASPGP | MARCELLUS SHALE COALITION

Benefits for the Commonwealth If the Solutions are Implemented: Permitting in PA will be more timely and predictable. Natural gas will be delivered more efficiently to the market. Strong environmental protections will remain in place. PA will be aligned with the May 17, 2013 Memorandum from President Obama to reduce government review and permitting timelines for infrastructure projects including pipeline projects. 12 | MARCELLUS SHALE COALITION

Thank you! Marcellus Shale Coalition Thank you! Marcellus Shale Coalition | MARCELLUS SHALE COALITION

Permitting Program in Pennsylvania The Problem Pennsylvania at competitive disadvantage Gas cannot get to market = lost economic opportunity Royalty owners are not getting paid No additional environmental benefit Conflicts with May 17, 2013 Memorandum from President Obama to reduce government review and permitting timelines for infrastructure projects 14 | MARCELLUS SHALE COALITION

PASPGP-4 vs. NWP Single & Complete Project under PASPGP-4 Category I – A “Single & Complete Project” which results in no more than 1 acre of impacts to waters of the U.S. and no more than 250 linear feet of impacts (temporary and permanent). Category III – A “Single & Complete Project” which exceed 1 acre area and the 250 linear feet threshold for temporary and permanent impacts to waters of the U.S. 15 | MARCELLUS SHALE COALITION

PASPGP-4 Category I vs. Category III Permit 16 | MARCELLUS SHALE COALITION

PASPGP-4 vs. NWP Linear Projects under PAPSPG-4 For linear projects, impacts are accounted cumulatively for all crossings associated with the “Overall” project. This is different in principle and definition from the Nationwide Permit Program. 17 | MARCELLUS SHALE COALITION

PASPGP-4 vs. NWP Category I vs. Category III A Category III PASPGP-4 permit designation requires other agency sign-offs prior to permit authorization. These include: –Pennsylvania Historical Museum Commission –Tribal Review For Category I, these are addressed by state permit conditions, which do not delay permit authorization or construction. 18 | MARCELLUS SHALE COALITION

PASPGP-4 Category I vs. Category III Permit 19 | MARCELLUS SHALE COALITION

Appendix – Single & Complete Project 20 | MARCELLUS SHALE COALITION

Appendix – Temporary Impacts 21 | MARCELLUS SHALE COALITION

Appendix – Linear Footage Calculation 22 | MARCELLUS SHALE COALITION