Natural Gas Transmission Networks:
So You Want To Build A Pipeline?
Raymond James, Infrastructure
Office of Energy ProjectsFederal Energy Regulatory
CommissionAt
Wyoming Pipeline Authority Monthly Meeting
August 2003Casper, Wyoming
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FERC
Office of Energy Projects
What Does FERCRegulate?
• Natural Gas Industry– Interstate transportation rates and
services– Interstate gas pipeline construction and
oversee related environmental matters
• Electric Power Industry – Interstate transmission rates and
services– Wholesale energy rates and services– Corporate transactions, mergers,
securities issued by public utilities
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FERC
Office of Energy Projects
What Does FERCRegulate? (con’t)
• Oil Pipeline Industry– Interstate transportation rates and
services of crude oil and petroleum products
• Hydroelectric Industry– Licensing of nonfederal hydroelectric
projects– Oversee related environmental
matters– Inspect nonfederal hydropower
projects for safety issues
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FERC
Office of Energy Projects
Natural Gas Act (NGA)
Natural Gas Policy Act (NGPA)
Regulation of Interstate Construction
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FERC
Office of Energy Projects
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
Office of Energy Projects
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
Office of Energy Projects
• Automatic Authorization• Cost of facilities is less than $7.6 million
• Facilities are “eligible” facilities
• Prior Notice• Cost is between $7.5 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
Office of Energy Projects
• 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
Office of Energy Projects
How Does FERC Evaluate All Of These Major Projects?
What Is The Criteria Used inThis Evaluation?
Project Evaluation
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FERC
Office of Energy Projects
PL99-3-000Certificate Policy
• Apply Threshold Test
– Subsidization Incremental Rates
– No Subsidization Rolled-in Treatment
– System improvements for existing customers Rolled-in Treatment
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FERC
Office of Energy Projects
PL99-3-000Certificate Policy
• Develop Record– Adverse Impacts on
• Existing Customers and Pipelines• Landowners• Communities
– Specific Benefits– Need and Market– Condemnation Impact
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FERC
Office of Energy Projects
Adverse Impacts
NeedsandBenefitsRecord
n Balance Benefits and Impactsn Complete Traditional Environmental Process
PL99-3-000Certificate Policy
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FERC
Office of Energy Projects
Commission Action on Pipeline Projects in the
Rockies
• Since mid-1999, the Commission has approved 17 projects to increase pipeline capacity to move gas out of the Rockies– 3.8 Bcf per day of capacity– 1,788 miles of pipeline– 394,689 horsepower of
compression
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FERC
Office of Energy Projects
Major Pipeline Projects Certificated (MMcf/d)
January 2002 to July 2003
7.3 BCF/D Total2,225 Miles
Transco(359) Southern (330)
Kern River
(886)
CIG(272,92)
North Baja (500)
Tuscarora(96)
Northwest(162)
Kern River (282)
Iroquois(70)
TETCO(250)
Northwest(224)
NFS/DTI(150)
GeorgiaStraits (96)
1. Algonquin (285) 2. Islander East (285) 3. Iroquois (85) 4. Columbia (165,270)
SCG Pipeline (190)
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3
4
Northwest(175)
East Tennessee (510)
Tennessee (320)
TETCO (197)
Greenbrier (600)
El Paso (320)
WBI(80)
ANR(220)
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FERC
Office of Energy Projects
OpalHub
CheyenneHub
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
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FERC
Office of Energy Projects
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.
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FERC
Office of Energy Projects
Major Pipeline ProjectsPending (MMcf/d)
July 2003
4.0 BCF/D Total580 Miles
Calypso(832)
Maritimes (400)
Ocean Express(842)
Columbia(135)
Texas Eastern(223)
Algonquin(200)
El Paso (140) Cove Point(445)Cheyenne Plains
(560)
CIG(118)
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FERC
Office of Energy Projects
Major Pipeline Projectsin Pre-filing (MMcf/d)
August 2003
1.2 BCF/D Total Pipeline Capacity
1.1 BCF/D Deliverability Capacity
1,570 Miles
Picacho Pipeline (1,000)Pacific Texas
Grasslands Expansion (120)(WBI) Weaver’s Cove Energy LNG
(400)
Sound Energy Solutions LNG (700) (Mitsubishi)
Ruby Pipeline (125)
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FERC
Office of Energy Projects
Planned Projects To MoveGas in the Rockies
• Staff is aware of 15 projects to move Rockies’ gas that would have a potential capacity of 7.3 Bcf per day.
• In addition, there is a project in planning that would reverse flow on a Rockies’ pipeline, allowing for more flexibility in moving Rockies’ gas
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FERC
Office of Energy Projects
NEPA Pre-Filing Guidelines
• Applicant Must:
– File a written request
– Explain reasons and timing considerations
– Verify other major state and federal agencies support the process
– Describe consultations completed to date
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FERC
Office of Energy Projects
• Applicant Must:
– Propose options for third-party
contractor
– Agree to file complete application
– Preliminary route maps (if possible)
– Prepare a Public Participation Plan
NEPA Pre-Filing Guidelines
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FERC
Office of Energy Projects
You Need a Planfor Public Participation
• A Plan is required for NEPA Pre-filing and is
strongly encouraged in the traditional process
• Must be an intentional Component
• The Plan may include setting up a Website, a
toll-free 800 telephone number, quarterly
newsletter, a commitment to place all filings
and information in libraries, and holding
community-style “Open Houses”
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FERC
Office of Energy Projects
• FERC will assign a PF docket number
• Issue a scoping notice
• Examine alternatives
• Attend site visits and meetings
• Initiate preparation of NEPA document
• Review draft resource reports
NEPA Pre-Filing GuidelinesStaff Activities
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FERC
Office of Energy Projects
• Identify affected parties– Landowners– Agencies– Others
• Facilitate:– Issue identification– Study needs– Issue resolution
NEPA Pre-Filing Guidelines Staff
Activities
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FERC
Office of Energy Projects
Timeline Traditional vs. NEPA Pre-
filing
AnnounceOpen
Season
AnnounceOpen
Season
DevelopStudy
Corridor
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
Prepare ResourceReports
IssueFinalEIS
IssueFinalEIS
(months)
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FERC
Office of Energy Projects
PROPOSED PIPELINE LOOPING
An Example:Kern River Expansion
XPROPOSED COMPRESSOR STATION
• 716 miles of pipeline looping through CA, NV, UT, WY
• 3 New Compressors• $1.2 Billion • 885.6 MMcf/day of additional
capacity– Doubles Kern River’s
capacity from 845.5 MMcf/day to 1.7 Bcf/day
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FERC
Office of Energy Projects
Kern River Expansion Environmental Highlights
• Environmentally Acceptable– New pipe parallels initial right-of-way.– Mitigation measures minimize potential impacts.
• First Major Project to utilize NEPA Pre-Filing– Order issued less than 1 year from initial filing
date - Final EIS completed in June 2002 which was 11 months from filing date.
– In comparison, FEIS and certificate for Gulfstream required 16 months from initial filing date; Kern River’s initial greenfield project required 30 months for the FEIS.
– Interagency cooperation contributed to meeting Federal and state environmental requirements.
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FERC
Office of Energy Projects
An Example:Greenbrier Project
– 279 miles of pipeline through WV, VA, and NC– 2 New Compressors Stations– $0.5 Billion – 600 MMcf/d of new capacity– Order issued 10 months after initial filing– FEIS issued 8 months after initial filing
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FERC
Office of Energy Projects
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
Office of Energy Projects
What It All Means to You
• Things will be perfect forevermore!• 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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