FERC Office of Energy Projects 1 Federal Energy Regulatory Commission FERC’s Natural Gas Pipeline...

1

FERC

Office of Energy Projects

Federal Energy Regulatory Commission

FERC’s Natural Gas Pipeline Certification ProgramInterstate Pipeline Regulatory

Committee

October 9, 2003Berne L. Mosley, Director

Division of Pipeline Certificates

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FERC


FERC Organizational Structure

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FERC


DirectorJ. Mark RobinsonDeputy DirectorRobert J. Cupina

Division of Pipeline Certificates

Director - Berne L. MosleyDeputy Dir. - Vacant

Division of Gas- Environment & Engineering

Director - Richard R. HoffmannDeputy Dir. - Vacant

Division of Hydropower-Environment & Engineering

Director – Ann F. MilesDeputy Dir. – Lon R. Crow

Division of HydropowerAdministration & ComplianceDirector – Joseph D. Morgan

Deputy Dir. – Vacant

Division of Dam Safety& Inspections

Director – Constantine TjoumasDeputy Dir. – Daniel J. Mahoney

Energy InfrastructurePolicy Group

Jeff C. Wright

Assistant DirectorManagement & Operations

Thomas Dewitt

Certificates Branch 1Michael McGehee

Certificates Branch 2William L. Zoller

Gas Branch 1Robert K. Arvedlund

Gas Branch 2Lauren H. O’Donnell

Gas Branch 3Lonnie A. Lister

Hydro East Branch 1Vince Yearick

Hydro East Branch 2Edward A. Abrams

Hydro West Branch 1Jennifer Hill

Hydro West Branch 2Timothy Welch

Land Resources & Reg.Compliance Branch

Hossein Ildari

Engineering &Jurisdiction Branch

Akbar Tahiry

Biological ResourcesBranch

George H. Taylor

Washington OfficeWilliam H. Allerton

Atlanta RegionalOffice

Jerrold W. Gotzmer

Chicago RegionalOffice

Peggy A. Harding

New York RegionalOffice

Anton J. Sidoti

Portland RegionalOffice

Harry T. Hall

San FranciscoRegional Office

Takeshi Yamashita

OEP Organizational Structure

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FERC


Office of Energy Projects - Functions

• OEP has the engineering and environmental expertise to: certificate new gas pipeline projects, authorize and monitor hydroelectric projects, and analyze energy infrastructure needs and policies.

• OEP focuses on: project siting and development, balancing environmental and other concerns, ensuring compliance, safeguarding the public, and providing infrastructure capacity information.

• Other FERC Offices

– OGC has corresponding hydro and pipeline legal responsibilities– OMTR, OMOI, OED, and OEA also have input to our products

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FERC


Gas Pipeline Program

• Evaluate applications for facilities to import, export transport, store or exchange natural gas

• Authorize the construction and operation of facilities for such services

• Approve abandonment of such facilities• Conduct environmental reviews of proposals

involving construction, modification, or abandonment

• Implement NEPA Pre-Filing Process• Conduct inspections of LNG facilities and

pipeline construction

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FERC


Natural Gas Act (NGA)

Natural Gas Policy Act (NGPA)

Regulation of Interstate Construction

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FERC


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

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FERC


Natural Gas Act

NATURAL GAS ACT

Section 3 Import/Expor

t

CaseSpecific

CaseSpecific

BlanketAuthority

Automatic PriorNotice

Section 7(c)Interstate

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FERC


• Automatic Authorization• Cost of facilities is less than $7.6 million

• Facilities are “eligible” facilities

• Prior Notice• Cost is between $7.6 and $21.2 million

• 45-day notice period prior to construction

• Facilities are “eligible” facilities

Natural Gas Act

• Blanket Certificate

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FERC


• 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

Natural Gas Act

• Case Specific Section 7(c) Certificate

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FERC


How Does FERC Evaluate All Of These Major Projects?

What Are The Criteria Used inThis Evaluation?

Project Evaluation

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FERC


Balancing Interests

People Like... But They Also Want...

Due Process Expedited Process

Smaller Government Effective Government

Less Regulation Assurance of Fair Markets

Market-dictated OutcomesProtection from Market

Dysfunctions, Unexpected Risk,and Unjust Rates

Protection for the Environment andProperty Interests

Ample Supplies ofLow-cost Energy

Due Process Expedited Process

Smaller Government Effective Government

Less Regulation Assurance of Fair Markets

Market-dictated OutcomesProtection from Market

Dysfunctions, Unexpected Risk,and Unjust Rates

Protection for the Environment andProperty Interests

Ample Supplies ofLow-cost Energy

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FERC


FERC’s Internal Review Process

• Initial review for completeness (10 days)

• Issue notice of application• Assign review team

– Environmental– Certificates– Rates– Attorney– Markets

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Environmental Review Public Interest Review

Notice of Intent

Data Requests

Analysis

Agency Coordination

Scoping Meetings

& Site Visit

Data Requests

Analysis

Interventions

Protests

Notice of Application

Preliminary Determination

(Optional)

Authorization / Rejection

Tech Conference

(Optional)

Cryogenic Design &

Safety Review

DEIS

FEIS

FERC

Review

Process

(Traditional Process)

LNG

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FERC


Traditional vs. NEPA Pre-Filing Process

AnnounceOpen

Season

AnnounceOpen

Season

Develop

StudyCorrido

r

DevelopStudy

Corridor

Conduct

Scoping

Conduct

Scoping

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

Review DraftResource Reports& Prepare DEIS

IssueDraftEIS

IssueDraftEIS

FileAt

FERC

IssueOrder

IssueOrder

FileAt

FERC

Prepare ResourceReports


IssueFinalEIS

IssueFinalEIS

(months)

Traditional - Applicant

Traditional - FERC

NEPA Pre-Filing - Applicant

NEPA Pre-Filing - FERC

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FERC


AnnounceOpen

Season

AnnounceOpen

Season

Develop

StudyCorrido

r

DevelopStudy

Corridor

Conduct

Scoping

Conduct

Scoping

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

Review DraftResource Reports& Prepare DEIS

IssueDraftEIS

IssueDraftEIS

FileAt

FERC

IssueOrder

IssueOrder

FileAt

FERC



IssueFinalEIS

IssueFinalEIS

(months)

Traditional - Applicant

Traditional - FERC

NEPA Pre-Filing - Applicant

NEPA Pre-Filing - FERC

Traditional vs. NEPA Pre-Filing Process

NOT A SHORTCUT

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FERC


How to “Expedite”the NEPA Pre-Filing Process

• Projects Can Be Expedited Only If– The company follows the NEPA Pre-

Filing guidelines;– Public involvement is made an integral

part of the project planning process;– The company works in partnership with

the agencies; and– The project is READY to move forward.

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FERC


NEPA Pre-Filing Process –Completed Projects

• Kern River Expansion 2002 (720 miles,

looping)

– approved in 11 months

• Greenbrier Pipeline (280 miles, new pipe)

– approved in 9 months

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FERC


NEPA Pre-Filing Process – Pending Projects

• FY03– Cheyenne Plains - CIG– Picacho Pipeline - PacTex– Grasslands Expansion - Williston Basin– Weavers Cove LNG - Dominion– Long Beach LNG Project - Sound Energy

Solutions – Ruby Project - CIG– San Juan 2005 Expansion - Transwestern

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FERC


Lessons Learned by FERC

• Project teams should be ready and able to make commitments necessary to move forward as partners in the process

• Participating agencies should be contacted as early as possible

• FERC has to work harder to bring agencies together

• Stakeholder involvement must proceed according to a well-defined plan supported by management

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FERC


Lessons Learned by FERC

• Early in the process, projects are works in progress, routing and documentation will change

• Both the company and FERC need to hold focused meetings with stakeholders

• Project information must be readily available, easily accessible, and updated regularly.

• Changes in routing and mitigation should be tracked and reported frequently to stakeholders

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FERC


New Directions for NEPA Pre-Filing

• Not just for Pipelines

– Currently being used for two LNG terminals

– Lots of LNG work on the horizon

– Expected to be large portion of future

workload

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FERC


New Directions for NEPAPre-Filing

• Not just for EISs

– Process can work for major EAs

– No third-party contractor required, but may

be requested by staff at a later date

– Currently have one project approved that

will file an applicant prepared draft EA

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FERC


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!

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FERC


Contributing to Success

• Interagency Agreement May 2002– FERC as lead agency

• Public Outreach Efforts– Last meeting - 10/02/03, Roanoke VA

• Other Cooperative Efforts– DOT CATS Program

– NASFM Case Study

– BLM Training

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FERC


Interagency Communication

• Interagency Agreement - August 2002– FERC, ACHP, BLM, BIA, BOR, CEQ,

COE, DOT, EPA, Forest Service, FWS, MMS, NPS, and NOAA Fisheries

– Concurrent review– Concurrent issuance of necessary

approvals

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FERC


Agencies Agree To…

• Coordinate early and often – proactive, informal

• Develop a workable schedule with lead agency– FERC, in most cases

• Support FERC’s NEPA Pre-Filing Option

• Share data

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FERC


Implementationof the Agreement

• Establish Working Group

• Assist in developing draft guidance for each agency

• Evaluate the Agreement’s effectiveness

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FERC


What This Means

• 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

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FERC


Gas Outreach Efforts

• Ongoing• 5th Workshop held on October 2 in

Roanoke, VA• Plan to have another meeting

before end of the year• Companies are taking stakeholder

involvement seriously

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FERC


Nat

ura

l G

as P

ipel

ines

Storage and Vaporization

Facility

Liquefaction and Storage

Facility

Natu

ral Gas P

rod

uctio

n

Do

ck

Do

ck

LNG Supply Stream -- From Production to Distribution

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Economic Oversight – Access to LNG Terminal

LNGShip

Natural Gas Pipelines

Liquid to Vapor Flow

FERC


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Storage and Vaporization

Facility

Do

ck

New FERC Policy – Hackberry CaseNO oversight for access, rate or tariff for LNG terminals;

vaporized LNG competes with unregulated domestic supply.

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FERC


Benefits of theNew LNG Policy

• Stimulates development of new LNG terminals

• Accommodates various business models

• Increases gas supplies to the U.S.

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FERC


Alaskan Natural Gas Pipeline

• Long lead time and high cost for delivery to market

• Producers say that Alaskan project is uneconomic at this time

• Sensitivity in Canada, DC and Alaska• U.S. Government has been monitoring and

standing ready to help or act• New legislation for Alaskan Gas Project is

pending

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FERC


Pending U. S. Energy Bill re Alaskan Gas

• Final outcome of bill is uncertain• Most likely - Provisions to streamline

regulatory and legal process• Probably - Some limit or ban on the

“Over-the-Top” route (above 68 degrees North)

• Possibly - Some type of financial assistance: loans or tax credits

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FERC


Other Gas Initiatives

• Emergency Reconstruction Rule• Regional Energy Infrastructure

Conferences• The “Last Mile”• Other Outreach Efforts

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FERC


Emergency Reconstruction Rule

• The Rule allows pipelines to begin work on restoration projects under the blanket certificate program

• Construction begins after notification to the Commission

• Landowner advance notice required• No cost cap• Rearrangements w/ Compression =

OK

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FERC


THE LAST MILE

• High Pressure Needed In/Near Cities

• Congestion/ In-Street Construction

• Environmental Justice

• State Involvement– CZMA? 401?

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FERC


Other Outreach Efforts

• Southwestern Gas Storage Technical Conference, Docket No. AD03-11-000:Analysis of relevant market needs and regulatory options available to assure the appropriate development of southwestern natural gas storage facilities

• Gathering Conference, Docket No. AD03-13-000:Reexamination of our gathering policies, and whether our gathering policies provide sufficient incentives to develop offshore gas supplies needed to meet the country's demand for natural gas

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FERC Office of Energy Projects 1 Federal Energy Regulatory Commission FERC’s Natural Gas Pipeline...

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