Pipelines: Delivering Benefit

1

• Pipelines Delivering Benefit
• for British Columbians
• B.C. Oil Gas Opportunities Summit
• Victoria, British Columbia
• February 27, 2007

2
CEPA Members

• Full
• TransCanada
• Enbridge
• Spectra
• Alliance
• Kinder Morgan Canada
• TransGas
• ATCO
• Trans-Northern
• Foothills
• Trans Québec Maritimes
• Technical
• Pembina Pipelines
• BP Canada Energy Company
• Maritimes Northeast Pipeline

• Transport 97 of the crude oil and natural gas
  produced in Canada
• Oil pipeline system near capacity
• New natural gas supply needs to be connected to
  existing pipeline systems
• Collective assets must double in next 15 years

3

• British Columbia Facts
• 3,962 kilometres of pipeline
• 3.1 billion in assets
• 97 million paid in property taxes (2006)
• 80 million in operating and maintenance
  investment (2006)
• 25 million in capital investments (2006)

Spectra
CEPA Members British Columbia
4
Canadian Natural Gas Facts 2005 17.1 billion
cubic feet/day total production 10 billion
cubic feet/day total exports 36.6 billion
(CDN) value of total exports 57 trillion cubic
feet total reserves (as of Jan 1,
2007) (Source EIA/EUB/NEB)
Spectra
Member Natural Gas Pipelines Critical Part of
North Americas Prosperity Infrastructure
5
Canadian Oil Facts 2005 2.51 million
barrels/day total production 1.58 million
barrels/day total exports 30.2 billion (CDN)
value of total exports 179 billion barrels
total reserves (as of Jan 1, 2007) (Source
EIA/EUB/NEB)
Pembina
Edmonton
Enbridge
Hardisty
Spectra
Kinder Morgan
BP
Trans-Northern
Coffeyville
Big Spring
Longview
Houston
Member Liquids Pipelines Critical Part of North
Americas Prosperity Infrastructure
6
Natural Gas Demand IncreasingConnecting New
Supply to Market Crucial
Billion cubic feet
Billion cubic feet
Canada U.S. Demand Sources
Canada U.S. Supply Sources
Sources EIA Annual Energy Outlook 2005 (US
Data), NEB Supply Push Outlook (Canadian Data)
7
Alaska Pipeline 4 6 bcf capacity 2014
in-service 20 billion US cost 115 Tcf reserves
(proven and possible)
Mackenzie Pipeline 1.2 1.8 bcf capacity 2012
in-service 7.5 billion CDN cost 123 Tcf reserves
(proven and possible)
Lloydminster
Edmonton
Vancouver
Hardisty
Anacortes
Kerrobert
Seattle
Regina
Spokane
Portland
Clearbrook
Montreal
St. Paul
Sarnia
Nanticoke
San Francisco
Avon
Warren
Chicago
Lockport
Lima
Canton
Bakersfield
Santa Maria
Patoka
Torrance
Los Angeles
Long Beach
Memphis
El Dorado
Big Spring
Longview
New Orleans
Port Arthur
Houston
Three Rivers
Freeport
Corpus Christi
Proposed Natural Gas Pipeline Projects Connecting
frontiers to existing pipeline systems
8
Oil Demand IncreasingAdditional Oil Sands
Production Key
Million Bbl/d
Thousand Bbl/d
Canada and U.S. Oil Demand
Canada and U.S. Oil Supply
40
United States - Total
30
Canada
20
Canada - Total
Canada - Oil Sands
10
United States
Canada - Conventional
Sources NEB, EIA, BP Statistical Review, CAPP
9
Oil Pipeline System Near CapacityNew Pipeline
Capacity Urgently Needed
Sources TransCanada, Purvin Gertz
10
Enbridge Gateway Incremental Capacity..400,000
bpd In Service Date.2012-2014
Kinder Morgan Corridor Incremental
Capacity..240,000 bpd In Service
Date..2009
Zama
Enbridge Canadian - Waupisoo Incremental
Capacity350,000 bpd In Service
Date..2008
Kinder Morgan Trans Mountain TMx1/Anchor Increment
al Capacity75,000 bpd In Service
Date2007/08
Fort Saskatchewan
TransCanada Keystone Incremental
Capacity435,000 bpd In Service
Date..2009
Kinder Morgan Additional Proposals Trans
Mountain and Northern Route Options
TMx2.100,000 bpd (2011) Complete TM
Loop...400,000 bpd (2013) or North
Route450,000 bpd (2013-15)
Enbridge Alberta Clipper Incremental
Capacity400,000 bpd In Service
Date..2009
TQM Interconnection
Portland
Boston
Sarnia
Kinder Morgan Expansion to Express
Platte Platte expansion.15,000 bpd
(2010) Express expansion55,000 bpd (2010)
Enbridge USA Southern Access Incremental
Capacity400,000 bpd In Service
Date...2007-2009
Enbridge Kinder Morgan (2 proposals) Alberta to
US Gulf Coast Direct Incremental
Capacity.400,000 bpd In Service
DateTBD/2010
Gulf Coast
Reversal
Proposed Crude Oil Pipeline Expansions Critical
to getting new supply to market
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Miles of Experience A History of Safe,
Environmentally Sound Practices
Miles
Miles/year (1996 2020), Canada United States,
Natural Gas and Oil Sands
Sources INGAA, Altex, Enbridge, Kinder Morgan
Canada, TransCanada
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Pipelines Delivering BenefitContributing to
Quality of Life

• Career Business Opportunities
• Engineers
• Accountants
• Process and field operators
• Electricians
• Instrumentation specialists
• Welders
• Equipment operators
• Building trades
• Information systems
• Geotechnical
• Wildlife monitoring
• Traditional knowledge specialists
• Land owner relations specialists
• Equipment supply/maintenance
• Charter air services
• Catering and accommodation
• Camp and site security services

• A typical 1,000 kilometre pipeline project will
  benefit all Canadians
• Creates 12,000 person years of work
• Adds almost (CDN) 1 billion to Canadas GDP
• Demonstrated commitment to health, safety and
  environment
• No ruptures or leaks on member transmission
  pipeline systems under NEB regulation (2003-2005)
• Pipeline companies invest locally through
  employment, taxes and goods and services
  purchases
• Two-thirds of the energy used by Canadians is
  carried by CEPA member pipelines

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Pipelines Delivering BenefitLeaders in safety
environmental protection
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Pipelines Delivering BenefitCEPA Introduces
Integrity First

• Integrity First program emphasizes continuous
  improvement and regular reporting on key
  operational issues
• Health Safety (employee and public)
• Environmental performance
• Innovation in materials, processes and service
  delivery

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Pipelines Delivering Benefit Development Context
Changing

• Health, Safety Environmental
• Air, water and soil quality
• Climate change
• Fair-Share Issues
• Costs vs Benefits
• Access fatigue
• F/P/T revenue sharing
• Prosperity Infrastructure
• Refining, upgrading and pipelines
• Labour availability
• Community infrastructure

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Pipelines Delivering BenefitKey Project
Development Issues

• Land Access
• Aboriginal land claims, consultation and capacity
• Land-use planning guidelines
• Development benefits information
• Regulatory Policy
• Effective and efficient
• F/P/T overlap and duplication
• Agency/Department capacity
• Investment Innovation
• Skills and HR development
• R,DD
• Foreign and domestic direct investment

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Pipelines Delivering BenefitRegulatory Process
Complexity
1
7
2
13
8
Planning
Environmental Assessment Process
Permitting
Follow-up
14
3
9
37
Canadian Environmental Assessment Act CEA Agency
15
21
32
Participants DFO / EC / TC / NRCan / HC
38
33
4
16
10
22
National Energy Board Act NEB
39
5
17
Participants DFO / EC / TC
36
23
11
34
27
Species at Risk Act EC/DFO
24
6
18
12
28
25
19
Metal Mining Effluent Regulations EC/DFO
29
26
20
Explosive Act - NRCan
30
Fisheries Act - DFO
31
NWPA - TC
40
35
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Pipelines Delivering BenefitEnergy Policy
Issues Too Often Siloed
Labour and Material Supply
Technology R, D D
Policy and Regulatory Capacity
Competitive Fiscal Regimes
Air, Water and Soil Quality
Regulatory Efficiency
Aboriginal Relations
Information and Data
Climate Change
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Pipelines Delivering BenefitPolicy Framework
Emphasizes Coherence
Labour and Material Supply
Technology R, D D
Policy and Regulatory Capacity
Competitive Fiscal Regimes
Air, Water and Soil Quality
Regulatory Efifciency
Information and Data
Aboriginal Relations
Climate Change
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Pipelines Delivering BenefitPolicy Framework
Enables Opportunities

• Investment achieves
• Modern infrastructure
• Diversity of options
• Improved skills
• Better information

Investment

• Good Governance achieves
• Clear priorities
• Improved approval processes
• Intergovernmental cooperation
• Protection of physical integrity

• Innovation achieves
• Environmental performance
• New technologies
• Energy productivity
• Customer choice

Source Energy Dialogue Group
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Energy Infrastructure Investment Forecast
16 trillion US Global energy sector, next 30
years 1
155 billion US North America, pipelines only,
next 20 years 2 Sources 1 IEA, 2003 2
NPC, 2003
ALASKA
PIPELINE
MacKENZIE VALLEY PIPELINE
CORRIDOR EXPANSION
GATEWAY
WAUPISOO ATHABASCA EXPANSION
TMX
ALBERTA CLIPPER
BEAR HEAD TERMINAL
KEYSTONE
GROS CACOUNA
RABASKA
CANAPORT TERMINAL
SOUTHERN ACCESS
SOUTHERN LIGHTS
LEBANON CONNECTOR
ALBERTA TO US GULF COAST DIRECT
Liquid
Gas
LNG Terminal
Proposed Pipeline Capacity Expansions Crude Oil,
Natural Gas, and LNG
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For more information, please contact David
MacInnis,President Canadian Energy Pipeline
Association Suite 1860, 205 - 5th Avenue S.W. Bow
Valley Square II Calgary, Alberta T2P 2V7 Tel
[phone] Fax [phone] dmacinnis_at_cepa
.com www.cepa.com