1. FERC and the Development of an Alaska Natural Gas Pipeline Robert J. Cupina, Deputy Director Office of Energy Projects Federal Energy Regulatory Commission September 19, 2005

2. FERC Office of Energy Projects 2 Applies to any initial or voluntary expansion capacity on any Alaskan natural gas transportation project. Alaska Natural Gas Pipeline Act Open Season Provisions

3. FERC Office of Energy Projects 3 Regulations to be issued 120 days after passage Must cover procedures for the allocation of capacity and timing of any open seasons Alaska Natural Gas Pipeline Act Open Season Provisions

4. FERC Office of Energy Projects 4 Must promote competition in the, development of Alaskan natural gas Expansion open seasons must allow for transportation of natural gas from other production areas. Alaska Natural Gas Pipeline Act Open Season Provisions

5. FERC Office of Energy Projects 5 Alaska Natural Gas Pipeline Act Open Season Provisions Open season provisions were finalized in Order No. 2005, on February 9, 2005 Rehearing on open season provisions were considered in Order No. 2005-A, issued on June 1, 2005

6. FERC Office of Energy Projects 6 Months Open Season Begins Application Filed at FERC -12 -11 -10 -9 -8 -7 - 6 - 5 - 4 - 3 - 2 - 1 0 Alaska Pipeline Capacity Allocation Process Capacity Allocations Announced Allocations Challenged/ Contracts Signed Open Season Ends FERC Review of Open Season Plans

7. FERC Office of Energy Projects 7 Open Season Process in NOPR No advance notice Open season held for 90 days after 90 day prior notice period Capacity awarded Contracts signed Application filed

8. FERC Office of Energy Projects 8 Open Season Policy Considerations Balance encouragement of project construction with fair and open competition Rebuttable presumption for rolled-in rate treatment of costs of expansions Balance appropriate oversight with letting market forces work

9. FERC Office of Energy Projects 9 Alaska Natural Gas Pipeline Act FERC Process Under Section 103 or 110 Retains NGA duties Issues open season regs in 120 days Establishes rates, terms and conditions of tariff May approve or require future expansion May provide access to Alaska royalty gas Cooperate with Federal Coordinator and other agencies

10. FERC Office of Energy Projects 10 Alaska Natural Gas Pipeline Act FERC Process Under Section 110 Review previous certificate; determine level of info needed to satisfy terms and conditions Change previous certificate, as needed Issue final order, no timeframe Lead agency determined by DOE Secretary

11. FERC Office of Energy Projects 11 Alaska Natural Gas Pipeline Act FERC Process Under Section 103 Normal review process with 2 exceptions: –Presumption of public need –Presumption of adequate downstream capacity “Over-the-top” route prohibited Lead agency for NEPA review Issue DEIS 12 months after application Issue FEIS 6 months after DEIS

12. FERC Office of Energy Projects 12 -18 -12 MONTHS -6 0 Approve Pre-Filing Request Public Scoping, Community Outreach, and Native Alaskan Consultation Review Draft Resource Reports Complete Application Filed Evaluation of Application Issue Draft EIS Issue Final EIS Final Order Complete Application Filed Analysis and Documentation Receive and Respond to Comments 0 6 MONTHS 12 18 20 Environmental Review Process for a Section 103 Project

13. FERC Office of Energy Projects 13 Pre-Filing Process About 18 months from Green Light to Complete Application Two field seasons Parallel Activities of Staff and Sponsor

14. FERC Office of Energy Projects 14 Pre-Filing Process FERC Staff Activity –Route recognizance –Community outreach and public scoping –Native Alaskan consultation –Identify issues and resolve conflicts

15. FERC Office of Energy Projects 15 Pre-Filing Process Project Sponsor Activity –Stakeholder identification –Open Houses –Route studies and field surveys –Prepare FERC and other permit applications

16. FERC Office of Energy Projects 16 Application Review Verify and Document Data Coordinate Agency Analyses Develop Mitigation Issue Draft and Final EIS

17. FERC Office of Energy Projects 17 Post-Certification Activities Two to three years of preparation prior to construction –Financing –Fabrication of Equipment and Supplies Two to three years for construction –Primarily winter construction

18. FERC Office of Energy Projects 18 Activities to Date Memoranda of Understanding (MOU) –FERC and National Energy Board of Canada (5/10/04) –FERC and Regulatory Commission of Alaska (1/24/03) –Under development with DOE, DOI, and 11 other federal agencies

19. FERC Office of Energy Projects 19 Activities to Date Toured the pipeline route and met with stakeholders. Meetings with U.S. federal, state, and Canadian agencies

20. FERC Office of Energy Projects 20 Alaska Gasline Port Authority LNG Project 800 mile, 48” pipeline parallel to TAPS route from Prudhoe Bay to Valdez 125 mile lateral line for deliveries to South Central and Kenai areas Liquefaction plant/terminal in Valdez Destination: West Coast regas terminals in Canada, Lower 48 or Mexico FERC implications: –Yukon Pacific 1995 authorization for export terminal –TAGS line would require certificate

21. FERC Office of Energy Projects 21 Alaska Pipeline Construction Timeline – Example Case Timeline assumes Canada completes permitting within same timeframe. Stranded Gas Act award Dec ’05 Mar ‘06 Jun ‘06 Dec ‘07 Jun ‘09 Application filed EIS FERC Order Aug ‘09 Obtain permits, Purchase pipe, compressors, etc. Aug ‘12 Staging of camps, bridges, roads, and delivery of pipe Aug ‘15 Construction In service Aug ‘16 Beginning of open season process Preparation time assumes the producer’s 52” pipe About 1 year to produce and treat gas and fill the pipeline 18- Month Pre- Filing Process Begins End of open season process Sep ‘06 Aug ‘10

22. FERC Office of Energy Projects 22 US Natural Gas Balance