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Environmental Regulation and Liquefied Natural Gas Commissioner Suedeen G. Kelly, FERC Duke Environmental Law & Policy Forum November 19, 2004.

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Presentation on theme: "Environmental Regulation and Liquefied Natural Gas Commissioner Suedeen G. Kelly, FERC Duke Environmental Law & Policy Forum November 19, 2004."— Presentation transcript:

1 Environmental Regulation and Liquefied Natural Gas Commissioner Suedeen G. Kelly, FERC Duke Environmental Law & Policy Forum November 19, 2004

2 FERC 2 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.

3 FERC 3 * Approximately 29 TCF Of The Rockies Gas Resources Are Closed To Development and 108 Tcf Are Available With Restrictions. Source: NPC Some Production Areas Are Not Accessible

4 FERC 4 Gas Supply Projected domestic production will not keep pace with projected demand Pipeline imports from Canada are declining LNG is the supply source that will fill the demand-supply gap.

5 FERC 5 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

6 FERC 6 LNG Imports by Country

7 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 7

8 8 37 32 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.) 7. Lake Charles, LA: 0.6 Bcfd (Southern Union – Trunkline LNG) Proposed Terminals and Expansions – FERC 8. Fall River, MA : 0.8 Bcfd, (Weaver's Cove Energy/Hess LNG) 9. Long Beach, CA : 0.7 Bcfd, (Mitsubishi/ConocoPhillips – Sound Energy Solutions) 10. Corpus Christi, TX : 2.6 Bcfd, (Cheniere LNG Partners) 11. Sabine, LA : 2.6 Bcfd (Cheniere LNG) 12. Corpus Christi, TX : 1.0 Bcfd (Vista Del Sol - ExxonMobil) 13. Sabine, TX : 1.0 Bcfd (Golden Pass - ExxonMobil) 14. Logan Township, NJ : 1.2 Bcfd (Crown Landing LNG – BP) 15. Bahamas : 0.5 Bcfd, (Seafarer - El Paso/FPL ) 16. Corpus Christi, TX: 1.0 Bcfd (Ingleside Energy – Occidental Energy Ventures) 17. Providence, RI : 0.5 Bcfd (Keyspan & BG LNG) 18. Port Arthur, TX: 1.5 Bcfd (Sempra) 19. Cove Point, MD : 0.8 Bcfd (Dominion) Proposed Terminals – Coast Guard 20. California Offshore: 1.5 Bcfd (Cabrillo Port – BHP Billiton) 21. Louisiana Offshore : 1.0 Bcfd (Gulf Landing – Shell) 22. So. California Offshore : 0.5 Bcfd, (Crystal Energy) 23. Louisiana Offshore : 1.0 Bcfd (Main Pass McMoRan Exp.) 24. Gulf of Mexico: 1.0 Bcfd (Compass Port - ConocoPhillips) 25. Gulf of Mexico : 2.8 Bcfd (Pearl Crossing - ExxonMobil) Planned Terminals and Expansions 26. Coos Bay, OR: 0.13 Bcfd, (Energy Projects Development) 27. Somerset, MA : 0.65 Bcfd (Somerset LNG) 28. California - Offshore : 0.75 Bcfd, (Chevron Texaco) 29. Pleasant Point, ME : 0.5 Bcf/d (Quoddy Bay, LLC) 30. St. Helens, OR: 0.7 Bcfd (Port Westward LNG LLC) 31. Offshore Boston, MA: 0.8 Bcfd (Northeast Gateway – Excelerate Energy) 32. Galveston, TX: 1.2 Bcfd (Pelican Island – BP) 33. Pascagoula, MS: 1.0 Bcfd (Gulf LNG Energy LLC) 34. Port Lavaca, TX: 1.0 Bcfd (Calhoun LNG – Gulf Coast LNG Partners) 35. LI Sound, NY: 1.0 Bcfd (Broadwater Energy – TransCanada/Shell) 36. Philadelphia, PA: 0.6 Bcfd (Freedom Energy Center – PGW) 37. Pascagoula, MS: 1.3 Bcfd (ChevronTexaco)) Canadian Approved and Planned Terminals 38. St. John, NB : 1.0 Bcfd, (Canaport – Irving Oil)** 39. Point Tupper, NS 1.0 Bcf/d (Bear Head LNG - Anadarko)** 40. Quebec City, QC : 0.5 Bcfd (Project Rabaska – Enbridge/Gaz Met/Gaz de France) 41. Rivière-du- Loup, QC: 0.5 Bcfd (Cacouna Energy – TransCanada/PetroCanada) 42. Kitimat, BC: 0.34 Bcfd (Galveston LNG) 43. Prince Rupert, BC: 0.30 Bcfd (WestPac Terminals) 44. Goldboro, NS 1.0 Bcfd (Keltic Petrochemicals) Mexican Approved and Planned Terminals 45. Altamira, Tamulipas : 1.12 Bcfd, (Shell)** 46. Baja California, MX : 1.0 Bcfd, (Sempra & Shell)** 47. Baja California - Offshore : 1.4 Bcfd, (Chevron Texaco) 48. Lázaro Cárdenas, MX : 0.5 Bcfd (Tractebel/Repsol) 49. Puerto Libertad, MX: 1.3 Bcfd (Sonora Pacific LNG) Existing and Proposed North American LNG Terminals November 2004 FERC Office of Energy Projects A C 1 3 5 2 4 38 15 6 34 45 10 20 9 23 22 39 40 29 48 21 46 47 12 25 11 13 17 B 28 26 7 30 19 16 41 24 18 D 49 US Jurisdiction FERC US Coast Guard 31 43 42 * US pipeline approved; LNG terminal pending in Bahamas ** These projects have been approved by the Mexican and Canadian authorities 44 33 8 27 35 36 14

9 Office of Energy Projects 9 Pleasant Point, ME Everett, MA Providence, RI Offshore Boston, MA Fall River, MA Somerset, MA Northeast LNG Terminals October 2004 Legend: Existing Terminal Approved Terminal Proposed Terminal: Pre-Filing Proposed Terminal: Filed Working on DEIS Working on FEIS Planned Terminal Long Island Sound, NY

10 Office of Energy Projects 10 Mid-Atlantic LNG Terminals Cove Point, MD Logan Township, NJ Philadelphia, PA Legend: Existing Terminal Approved Terminal Proposed Terminal: Pre-Filing Proposed Terminal: Filed Working on DEIS Working on FEIS Planned Terminal October 2004

11 Office of Energy Projects 11 Southeast LNG Terminals Elba Island, GA (C) Bahamas Legend: Existing Terminal Approved Terminal Proposed Terminal: Pre-Filing Proposed Terminal: Filed Working on DEIS Working on FEIS Planned Terminal October 2004 Pipeline only

12 Office of Energy Projects 12 Corpus Christi LNG, TX Vista Del Sol Ingleside LNG Lake Charles, LA Port Pelican Pearl Crossing Freeport, TX Golden Pass, TX Brownsville, TX Port Arthur Sabine Pass, LA Energy Bridge Gulf Coast LNG Terminals Main Pass Cameron Gulf Landing October 2004 Compass Port Legend: Existing Terminal Approved Terminal Proposed Terminal: Pre-Filing Proposed Terminal: Filed Working on DEIS Working on FEIS Planned Terminal Galveston, TX Pascagoula, MS Port Lavaca, TX

13 Office of Energy Projects 13 Long Beach, CA California Offshore California LNG Terminals Chevron Texaco BHP Billiton Crystal Energy Legend: Existing Terminal Approved Terminal Proposed Terminal: Pre-Filing Proposed Terminal: Filed Working on DEIS Working on FEIS Planned Terminal October 2004

14 FERC 14 Office of Energy Projects 14 Northwest LNG Terminals Coos Bay, OR St. Helens, OR Legend: Existing Terminal Approved Terminal Proposed Terminal: Pre-Filing Proposed Terminal: Filed Working on DEIS Working on FEIS Planned Terminal October 2004

15 FERC 15 Maximum LNG Deliverability Growth

16 FERC 16 US Natural Gas Balance

17 FERC 17 LNG Siting Processes There are two FERC processes for siting LNG terminals: FERC Traditional Review Process Pre-Filing Process

18 LNG Review Process Cryogenic Design & Safety Review Public Meeting & Public Comment Scoping Meetings & Site Visit Interventions / Protests Notice of Application Authorization / Denial Technical Conference DEIS FEIS Notice of Intent Safety and Engineering Data Requests / Analysis & Agency Coordination FERC 18

19 FERC 19 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 Public Involvement

20 FERC 20 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 Public Involvement

21 FERC 21 LNG Terminal Siting Issues Safety Take Away Capacity Local acceptance Federal and State approvals

22 FERC 22 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

23 FERC 23 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

24 FERC 24 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

25 FERC 25 FERC’s Recent Actions FERC’s Modeling Study Skikda Accident Follow-up Reorganization for Safety @ FERC Fire Marshal Interaction Three “Faces” of LNG

26 FERC 26 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 Recent Events The FERC Model

27 FERC 27 Recent Events Skikda Accident Preliminary findings: –Initial explosion of high-pressure steam boiler caused by hydrocarbon leakage into combustion air fan –Larger secondary explosion of the hydrocarbon vapors in the immediate vicinity. –Consequences: Loss of life and plant property March 13 – 15, 2004 – FERC / DOE Team inspected accident site and interviewed Sonatrach. FERC / DOE Report addresses team review.

28 FERC 28 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 Application of FERC Model for LNG Tanker Release Consequences Contract awarded for review of the LNG Program Recent Events Reorganization for Safety

29 FERC 29 National Association of State Fire Marshals (NASFM) –The Partnership for Excellence in Pipeline Safety is authorized under a Cooperative Agreement between the NASFM and the OPS –NASFM will mobilize America’s emergency responders and the communities they serve to help prevent, safely mitigate and investigate pipeline incidents LNG module being developed –www.safepipelines.org Recent Events Fire Marshal Interaction

30 FERC 30 Recent Events Three “Faces” of LNG How you get your LNG news affects your perception –Popular Press (e.g., Newspapers) –Trade Press –FERC Filings and Issuances

31 FERC 31 LNG Supply Stream -- From Production to Distribution Natural Gas Production Natural Gas Pipelines Storage and Vaporization Facility Liquefaction and Storage Facility Natural Gas Production Dock


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