1. What’s Up With Infrastructure? Interstate Pipeline Regulatory Committee Jeff Wright, Chief Energy Infrastructure Policy Group Office of Energy Projects Federal Energy Regulatory Commission Phoenix, Arizona October 9, 2003

2. FERC Office of Energy Projects 1 FERC Helping Markets Work Adequate Infrastructure  Standard Market Rules Competitive Market Monitoring & Oversight

3. FERC Office of Energy Projects 2 FERC/OEP Tools Create a Forum for Discussion – Outreach Conferences Advise – Study Existing Facilities – Meet with Stakeholder Groups Our Process – Act on Certificate Filings

4. FERC Office of Energy Projects 3 Why An Infrastructure Group? The Chairman wanted a group dedicated to infrastructure issues and wanted it located in OEP. The convergence of gas and electric necessitates examinations of infrastructure dedicated to both as well as hydro, coal and oil issues. Need to research and present findings, both publicly and in-house.

5. FERC Office of Energy Projects 4 Mission Statement The Energy Infrastructure Policy Group would apprise the Commission of the status of the national energy infrastructure providing timely and accurate guidance on how national energy infrastructure needs can be met

6. FERC Office of Energy Projects 5 Objectives The Energy Infrastructure Policy Group would provide infrastructure guidance on measures before the Commission, prepare periodic regional reports on the status of national energy infrastructure, and, upon request, conduct special infrastructure studies.

7. FERC Office of Energy Projects 6 Organization EIPG is part of OEP’s front office staff. Answers directly to the Director and Deputy Director. Operates collegially. Group leader serves as focal point for assignments

8. FERC Office of Energy Projects 7 Staff Five multidisciplinary people with strong oral and computer-based presentation skills. Uses Commission-wide resource as required by the task. Regularly work with representatives of OMTR, OMOI, and OGC.

9. FERC Office of Energy Projects 8 Specific Duties Regional Assessments Regional Infrastructure Conferences Reports to the Commission – Closed and Open Meetings Convene Meetings with CRE and NEB North American Energy Working Group Other Duties As Assigned….

10. FERC Office of Energy Projects 9 FERC Infrastructure Conferences Five Conferences Held – Seattle – New York City – Orlando – Chicago – Denver Purpose – Bring together experts to discuss infrastructure issues in region

11. FERC Office of Energy Projects 10 Infrastructure Conferences Discussion Issues Include: – Adequacy of Electric, Gas, Hydro and Other Infrastructure – Essential Energy Infrastructure

12. FERC Office of Energy Projects 11 Topics Addressed Adequacy of Existing Infrastructure Necessary Additions of Infrastructure Barriers to Expansion Environmental and Landowner Concerns

13. FERC Office of Energy Projects 12 Why Conferences? To Explore How FERC Can Facilitate How To Enhance A Comprehensive And Collaborative Approach Development Of Reliable Energy Infrastructure

14. FERC Office of Energy Projects 13 Advising on Gas Infrastructure Needs Analyze What’s There Supply New Generation & Markets Security Siting

15. FERC Office of Energy Projects 14 Major Pipeline Projects Certificated (MMcf/d) January 2002 to Oct 2003 7.9 BCF/D Total 2,295 Miles Transco (323) Southern (330) Kern River (886) CIG (282,92) North Baja (500) Tuscarora (96) Northwest (162) 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) 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) El Paso (140) TETCO(223)

16. FERC Office of Energy Projects 15 Major Pipeline Projects Pending (MMcf/d) October 2003 3.6 BCF/D Total 526 Miles Calypso (832) Maritimes (400) Ocean Express (842) Cove Point (445) Cheyenne Plains (560) CIG (118) Northwest (113) Discovery (150) ANR (107)

17. FERC Office of Energy Projects 16 Major Pipeline Projects in Pre-filing (MMcf/d) October 2003 1.1 BCF/D Total Pipeline Capacity 1.1 BCF/D Deliverability Capacity 1,120 Miles Picacho Pipeline (1,000)* Pacific Texas Grasslands Expansion (120) (WBI) Weaver’s Cove Energy LNG (400) Sound Energy Solutions LNG (700) (Mitsubishi) *Picacho’s pre-filing has been suspended pending submission of required documents

18. FERC Office of Energy Projects 17 Transco (250) Alabama-Georgia (Duke) (240) Seafarer Pipeline (El Paso) (700) Gulf Pines (Gulf South) (1,000) Major Pipeline Projects On The Horizon (MMcf/d) October 2003 16.9 BCF/D Total 6,306 Miles Blue Atlantic (El Paso) (1,000) Freedom Trail (Tennessee) (150) Northwinds Pipeline (NFG) (570) WIC (150,300,470) Samoa Point (Calpine) (1,000) Sun Devil Project(Transwestern) (450) Advantage Southern (KM Interstate) (800) Silver Canyon Project (KM Interstate) (750) San Juan Lateral Exp. (Transwestern) (600) KM West Texas (KM Interstate) (300) Wheatland Expansion (KM Interstate) (80) Western Frontier (So. Star)(540) Kern River Expansion (500) TransColorado (750,125) Desert Crossing (500) Coronado (500) Alaska Gas (4,500) Lebanon Lateral (ANR) (250) Bison Pipeline (Northern Border) (325) Cheyenne Plains (170) Trailblazer (100) Enbridge (1,000)

19. FERC Office of Energy Projects 18 Desert Crossing (10.0) Storage Projects (Capacity in Bcf) October 2003 Certificated Since 2001 On The Horizon Currently Pending Copiah (3.3) SG Resources (6.0) Seneca (0.8) Stagecoach (13.6) Dominion (5.6) Egan Hub (13.5) Gulf South (18.5) Natural (10.7) Wyckoff (6.0) KM (6.5) Caledonia (10.0) Falcon Gas (20.0) Midwest (4.5) NUI (11.6) Questar (5.0) Sabine (40.0) Tennessee (5.0) Copper Eagle (3.2) EnCana (8.0) Bluewater (27.0)

20. Existing Terminals with Expansions A. Everett, MA : 1.035 Bcfd (Tractebel) B. Cove Point, MD : 1.0 Bcfd (Dominion) C. Elba Island, GA : 1.2 Bcfd (El Paso) D. Lake Charles, LA : 1.2 Bcfd (Southern Union) Approved Terminals 1. Hackberry, LA : 1.5 Bcfd, (Sempra Energy) Proposed Terminals – FERC 2. Bahamas : 0.84 Bcfd, (AES Ocean Express) 3. Bahamas : 0.83 Bcfd, (Calypso Tractebel) 4. Freeport, TX : 1.5 Bcfd, (Cheniere / Freeport LNG Dev.) 5. Fall River, MA : 0.4 Bcfd, (Weaver's Cove Energy) 6. Long Beach, CA : 0.7 Bcfd, (Sound Energy Solutions/Mitsubishi) Proposed Terminals – Coast Guard 8. Port Pelican: 1 Bcfd, (Chevron Texaco) 9. Gulf of Mexico: 0.5 Bcfd, (El Paso Global) Planned Terminals 10. Brownsville, TX : n/a, (Cheniere LNG Partners) 11. Corpus Christi, TX : 2.6 Bcfd, (Cheniere LNG Partners) 12. Sabine, LA : 2.6 Bcfd (Cheniere LNG) 13. Humboldt Bay, CA : 0.5 Bcfd, (Calpine) 14. Undecided: 1.0+. Bcfd, (ExxonMobil) 15. Somerset, MA : 0.65 Bcfd (Somerset LNG) 16. Louisiana Offshore : 1.0 Bcfd (McMoRan Exp.) 17. Belmar, NJ Offshore : n/a, n/a (El Paso Global) 18. So. California Offshore : 0.5 Bcfd, (Chevron Texaco) 19. Bahamas : 0.5 Bcfd, (El Paso Sea Fare) 20. Altamira, Tamulipas : 1.12 Bcfd, (Shell) 21. Baja California : 1.3 Bcfd, (Sempra) 22. Baja California : 1.4 Bcfd, (Chevron Texaco) 23. Baja California : 0.85 Bcfd, (Marathon) 24. Baja California : 1.3 Bcfd, (Shell) 25. St. John, NB : 0.75 Bcfd, (Irving Oil & Chevron Canada) 26. California Offshore: 1.5 Bcfd, (BHP Billiton) 27. Point Tupper, NS 0.75 Bcf/d (Access Northeast Energy) 28. Harpswell, ME 0.5 Bcf/d (Fairwinds LNG – CP & TCPL) Existing and Proposed LNG Terminals October 2003 A C 1 2 3 8 9 25 5 17 19 4 10 20 11 21 18 6 22 23 24 13 B 12 D 15 16 26 27 19 FERC Office of Energy Projects

21. FERC Office of Energy Projects 20 Maximum LNG Deliverability Growth (Bcf/d)

22. What Have We Been Doing Lately? A quick look at Western US Gas Infrastructure

23. The West is dependent on production from gas originating mainly in the Rockies, Southwest and Canada. United States West % of United States Total Gas Consumption 20.5 Tcf4.1 Tcf20% Total Dry Gas Production 19.7 Tcf4.3 Tcf22% Total Proved Gas Reserves 183.5 Tcf57.0 Tcf31% Total Storage Capacity 8.4 Tcf1.3 Tcf15% Total Net Imports from Canada 3.6 Tcf1.2 Tcf33% Total Net Exports to Mexico 0.13 Tcf0.03 Tcf23% Western Gas Facts - 2001 Source: EIA’s Natural Gas Annual 2001 and US Crude Oil, Natural Gas, and Natural Gas Liquid Reserves 2001 Annual Report Office of Energy Projects 22

24. Source: EIA’s Natural Gas Annual 2001 with supporting data, and EIA’s Historical Consumption by State Over the past 10 years, the electric generation has been the fastest growing sector in the West and is now the largest gas consuming sector. Office of Energy Projects 23

25. Source: RDI’s Powermap and NewGen (May 2003 data) Planned gas-fired electric plants in the west for the period 2003-2005 will be located along the major interstate natural gas pipelines, and along the intrastate natural gas pipelines in California. Year Proposed Generation in MW (Under Construction & Advanced development) Related Gas Demand with Heat Rate of 5,687 BTU/KWH (MMcf/d) Related Gas Demand with Heat Rate of 7,000 BTU/KWH (MMcf/d) 2003 (Post May 03) 8,661688846 2004 5,028399491 2005 3,019240295 Total 16,7081,3271,632 Office of Energy Projects 24

26. The West is dependent on pipeline capacity originating in Canada and the Southwest. As the Rocky Mountain basins develop, increased pipeline capacity will be required to transport this gas towards markets in the West and Midwest. 1.8 Bcf/d 1.1 Bcf/d 0.2 Bcf/d 0.5 Bcf/d 3.8 Bcf/d 1.8 Bcf/d 0.4 Bcf/d Source: RDI’s Powermap and EEA’s April 2002 data base (Average Pipeline Capacity for 2002) Major Western Interstate Gas Pipelines Colorado Interstate Gas Co. El Paso Natural Gas Co. Kern River Gas Transmission Mojave Pipeline Co. Northern Border Pipeline Co. Northwest Pipeline Corp. Paiute Pipeline Co. PG&E Gas Transmission, Northwest Questar Gas Co. Southern Star Central Gas Southern Trails Pipeline Trailblazer Pipeline Co. TransColorado Gas Transmission Transwestern Pipeline Co. Tuscarora Gas Transmission Williston Basin Interstate Wyoming Interstate Co., Ltd. Office of Energy Projects 25

27. FERC Office of Energy Projects 26 26% Of Total US Gas Reserves Are Located in the Rocky Mountain Region. Sources: Wyoming Energy Commission’s Website; Mr. Chris Schenk of USGS; USGS’ Assessment of Oil and Gas Resources in Priority Basins in the US; and Power Map Powder River Basin Big Horn Basin Wind River Basin Green River Basin Denver Basin Overthrust Belt UT CO MT WY Rocky Mountains Total Resources 209 Tcf Conventional 29 Tcf Non-Conventional 180 Tcf (Coal Bed Methane 45 Tcf) Wyoming Southwestern Wyoming & Powder River Basin 101 Tcf Powder River Basin – Coal Bed Methane 14.3 Tcf

28. FERC Office of Energy Projects 27 Proved Gas Reserves Wyoming and Colorado comprised 10% and 7%, respectively, of EIA’s estimated total proved US gas reserves of 183.5 Tcf as of 12/31/01. Wyoming had the largest increase in proved reserves, by state or federal region, from 2000 to 2001 at 2.2 Tcf. (Total US reserves increased by 6 Tcf.)

29. FERC Office of Energy Projects 28 Rocky Mountain Pipelines Source: RDI Power Map and Capacity Volumes from Energy and Environmental Analysis Inc’s (EEA) April 2002 Base Case. Eleven interstate pipelines are located within the four states that encompass the Rocky Mountain region. These 11 pipelines have total average pipeline capacity of 5,204 MMcf/d coming out of the Rockies as of May 2003.

30. FERC Office of Energy Projects 29 Opal Hub Cheyenne Hub 0.2 Bcf 2.2 Bcf 3.1 Bcf Source: RDI PowerMap and various flow diagrams on file at the FERC. Note: Williams Gas Pipelines Central Inc. is now Southern Star Central Gas Pipeline. Interstate Pipeline Capacity Out of Wyoming FERC 29

31. FERC Office of Energy Projects 30 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.

32. FERC Office of Energy Projects 31 Contact JEFF WRIGHT jeff.wright@ferc.gov 202-502-8617