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The Future of LNG and the Permit Process Dan Kirschner, Executive Director, Northwest Gas Association National Waterways Conference September 8, 2006 Gas Consumption (Tcf) Growth in Gas Demand by Region An Interconnected Market Gas Prices The Price of Oil Has an Impact… Production per Rig Gas Production by Region Productive Capacity Source: Energy and Environmental Analysis, Inc. Putting It All Together: Growing Demand + Slowing Supply = LNG? Why LNG? Large reserves with little or no local market. Pipelines to markets impractical (Source: BP Statistical Review of World Energy, 2005) LNG enables long distance shipping It Must Make Economic Sense Pacific Basin Sources of LNG Northwest LNG Proposals A Bit About Process… FERC is lead agency; consults w/state agencies USCG serves as subject matter expert for maritime safety and security for EIS USCG validates Waterways Suitability Analysis (WSA) Provide USCG and Maritime Stakeholder input USCG issues Letter of Recommendation (LOR) Waterways Suitability Analysis Risk-based analysis: Identify risks that arise from introduction of LNG operations into port What can go wrong? What is the likelihood? How severe are consequences? The goals: Understand individual risks in terms of: probabilities, threats, vulnerabilities, consequences Use info to develop effective risk management strategies WSA Includes: Transportation through the vessel’s arrival in US waters to LNG facility Navigation and environmental safety issues Safety and security issues that might affect entire port; detailed review of specific points of concern Questions? * * Source: EIA, projections are for WA-OR 5335 SW Meadows Rd., #220 Lake Oswego, OR 97035 (503) 624-2160 NWGA Members: Avista Corporation Cascade Natural Gas Co. Intermountain Gas Co. NW Natural Puget Sound Energy Duke Energy Gas Transmission Terasen Gas TransCanada’s GTN System Williams NW Pipeline Source: EIA Annual Energy Review 2005 Source: EIA 2006 Annual Energy Outlook Source: EI

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