Transcript Generic title slide

Conference of Western Attorneys General
Regulatory Predictability
Sean McMaster – TransCanada Corporation
February 16, 2012
Forward Looking Information
This presentation may contain certain information that is forward-looking and is subject to important risks and
uncertainties. The words "anticipate", "expect", "believe", "may", "should", "estimate", "project", "outlook",
"forecast" or other similar words are used to identify such forward-looking information. Forward-looking
statements in this presentation are intended to provide TransCanada security holders and potential investors with
information regarding TransCanada and its subsidiaries, including management’s assessment of TransCanada’s
and its subsidiaries’ future financial and operational plans and outlook. Forward-looking statements in this
presentation may include, among others, statements regarding the anticipated business prospects, and financial
performance of TransCanada and its subsidiaries, expectations or projections about the future, strategies and
goals for growth and expansion, expected and future cash flows, costs, schedules (including anticipated
construction and completion dates), operating and financial results, and expected impact of future commitments
and contingent liabilities. All forward-looking statements reflect TransCanada's beliefs and assumptions based on
information available at the time the statements were made. Actual results or events may differ from those
predicted in these forward-looking statements. Factors that could cause actual results or events to differ materially
from current expectations include, among others, the ability of TransCanada to successfully implement its strategic
initiatives and whether such strategic initiatives will yield the expected benefits, the operating performance of the
TransCanada’s pipeline and energy assets, the availability and price of energy commodities, capacity payments,
regulatory processes and decisions, changes in environmental and other laws and regulations, competitive factors
in the pipeline and energy sectors, construction and completion of capital projects, labour, equipment and material
costs, access to capital markets, interest and currency exchange rates, technological developments and economic
conditions in North America. By its nature, forward-looking information is subject to various risks and
uncertainties, which could cause TransCanada's actual results and experience to differ materially from the
anticipated results or expectations expressed. Additional information on these and other factors is available in the
reports filed by TransCanada with Canadian securities regulators and with the U.S. Securities and Exchange
Commission (SEC). Readers are cautioned not to place undue reliance on this forward-looking information, which is
given as of the date it is expressed in this presentation or otherwise, and not to use future- oriented information or
financial outlooks for anything other than their intended purpose. TransCanada undertakes no obligation to update
publicly or revise any forward-looking information, whether as a result of new information, future events or
otherwise, except as required by law.
Leading North American
Energy Infrastructure Company
• Competitively positioned in pipeline and energy
infrastructure
• Approximately $50 billion of premium pipeline and energy
assets
• Employs over 4,200 people in nearly 50 professions,
trades and fields, located in 7 provinces and 32 states
3
Corporate Statistics
TransCanada Corporation (TRP) listed TSX and NYSE
(Financial figures are unaudited and in Canadian dollars, at December 31, 2011)
•
Total assets
•
Net income (attributable to common
shares)
$49.0 billion
$1.5 billion or $2.18 per share
•
Comparable Earnings
$1.6 billion or $2.23 per share
•
Funds generated from operations
$3.7 billion
•
Dividends declared per common share
$1.76
4
Our Vision and Values
Our Vision
Our Values
• TransCanada will be the leading
energy infrastructure company
in North America
Integrity
• With a strong focus on pipelines
and power generation
opportunities
Responsibility
Collaboration
Innovation
• Located in regions where we
enjoy or can develop significant
competitive advantage.
5
TransCanada Corporation
(TSX/NYSE: TRP)
• Natural Gas Pipelines
•
57,000 km (35,500 mi)
wholly owned
•
11,500 km (7,000 mi)
partially owned
•
250 Bcf of regulated natural
gas storage capacity
•
Average volume of 14 Bcf/d
• Oil Pipelines
•
Keystone* 1.4 million Bbl/d
ultimate capacity
• Energy
•
19 power plants, 10,800 MW
•
Diversified portfolio, including
wind, hydro, nuclear, coal and
natural gas
•
130 Bcf of non-regulated
natural gas storage capacity
*
Phases 1 and 2 in operation,
Phases 3 and 4 in development
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Natural Gas Pipelines
• 57,000 km (35,500 mi) of
wholly owned natural gas
pipeline
• Interests in an additional
11,500 km (7,000 mi) of
natural gas pipeline
• 250 Bcf of regulated natural
gas storage capacity
• Unparalleled connections from
traditional and emerging basins
to growing markets
• Average daily volume of
approximately 14 Bcf
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Oil Pipelines
•
Keystone Pipeline - 2,154miles, transporting crude oil
from Alberta to markets at
Wood River in Illinois and at
Cushing Oklahoma
•
Proposed Keystone XL Pipeline
Project – a proposed 1,661mile pipeline from Alberta to
serve markets at Cushing,
Oklahoma and Port Arthur,
Texas
•
1.4 million Bbl/day ultimate
capacity
•
Bakken and Cushing Marketlink
Projects would provide
opportunity to transport U.S.
crude production
•
Proposed Houston lateral would
expand capacity to the US Gulf
Coast refining center
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Keystone Oil Pipeline - Linking Growing
Crude Oil Supply to Large U.S. Markets
3.7
1.2 1.4
8.4
PADD II*
5.1
Canadian Imports
Total Foreign Imports
Refining Capacity
0.1
PADD III*
* millions of barrels per day
Source: 2009 EIA Actuals
9
Keystone Oil Pipeline - Linking Growing
Crude Oil Supply to Large U.S. Markets
WCSB Supply Outlook
MMb/d
History
Forecast
6
5
4
Bitumen Blend
3
2
1
Upgraded Light
Conventional Heavy
Conventional Light
0
3.7
2005
2010
2015
2020
2025
1.2 1.4
8.4
PADD II*
5.1
Canadian Imports
Total Foreign Imports
Refining Capacity
0.1
PADD III*
* millions of barrels per day
Source: 2009 EIA Actuals
10
Keystone Oil Pipeline - Linking Growing
Crude Oil Supply to Large U.S. Markets
WCSB Supply Outlook
MMb/d
History
Forecast
6
5
4
Bitumen Blend
3
2
1
Upgraded Light
Conventional Heavy
Conventional Light
0
3.7
1.2 1.4
8.4
PADD II*
5.1
MMb/d
2010
2015
2020
2025
Williston Basin Production
1.2
History
Forecast
1
0.8
Canadian Imports
Total Foreign Imports
Refining Capacity
0.6
0.4
0.2
0.1
PADD III*
* millions of barrels per day
2005
Source: 2009 EIA Actuals
0
2005
2010
2015
2020
11
Keystone Oil Pipeline - Linking Growing
Crude Oil Supply to Large U.S. Markets
WCSB Supply Outlook
MMb/d
History
Forecast
6
5
4
Bitumen Blend
3
2
1
Upgraded Light
Conventional Heavy
Conventional Light
0
3.7
1.2 1.4
8.4
PADD II*
5.1
MMb/d
2010
2015
2020
2025
Williston Basin Production
1.2
History
Forecast
1
0.8
Canadian Imports
Total Foreign Imports
Refining Capacity
0.6
0.4
0.2
0.1
PADD III*
* millions of barrels per day
2005
Source: 2009 EIA Actuals
0
2005
2010
2015
2020
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Benefits of Keystone Project
• The United States will derive significant benefits from the
Keystone projects:
•
Energy Security
•
National Security
•
Economic Stimulus
•
Job Creation
•
Tax revenue
•
Promotes domestic crude oil production and improved netback
pricing to domestic producers vis a vis rail/truck transport
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Keystone XL Major Permitting Processes
• State Permitting
•
South Dakota – Energy Conversion and Transmission
Facilities Act permit
•
Public informational meetings and formal evidentiary hearing
•
Considers impacts of proposed route but not alternative
routes; not a siting process per se
•
12-month mandatory timeline from application to Order
•
Application filed March 12, 1009
•
Order issued March 12, 2010
•
Keystone filed Motion for limited reconsideration – April 14,
2010
•
Amended Order issued – June 29, 2010
•
Highly predictable and reliable process!
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Keystone XL Major Permitting Processes
• State Permitting, continued
•
Montana – Major Facilities Siting Act (MFSA)
•
Detailed application to Montana Department of Environmental
Quality
•
MDEQ used DOS NEPA process to satisfy Montana
Environmental Quality Act obligation, as permitted by statute
•
Application filed December 18, 2008
•
Multiple rounds of information requests
•
Application deemed complete April 2010
•
Final EIS issued August 26, 2011
•
In December 2011, Governor Schweitzer announced MFSA
certificate would be issued shortly
•
MDEQ working on final details of MFSA Certificate
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Keystone XL Major Permitting Processes
• State Permitting, continued
•
Nebraska – No siting statute prior to November 2011
•
Public concern over route across Sandhills region led Governor
Heineman to call a Special Session of the Legislature in
November 2011 (notwithstanding Final EIS approval of
Sandhills route)
•
Legislature enacted Major Oil Pipeline Siting Act
•
Requires formal process before State Public Service
Commission; regulations yet to be promulgated
•
Legislation authorized Nebraska Department of Environmental
Quality to work with Dept. of State and Keystone to develop
alternate route to avoid Sandhills region
•
State Dept. denial of Presidential Permit temporarily
suspended DEQ process, pending new legislative direction in
2012 session.
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Keystone XL Major Permitting Processes
• Federal
•
Presidential Permit from US Department of State under
Executive Order 13337 authorizing border crossing
•
State Dept. conducts environmental review under NEPA
•
State Dept. conducts “National Interest” review considering
wide array of factors
•
Numerous federal agencies participate in NEPA and NID
reviews. Montana Department of Environmental Quality
also served as cooperating agency in NEPA review
•
US Army Corps of Engineers – wetland and waterbody
permitting under Clean Water Act
•
Bureau of Land Management – Grant of Right-of-Way and
Temporary Use Permit for ~42 miles of federal lands crossed
•
US Fish & Wildlife Service – Consultation with Dept. of State
under Endangered Species Act re impacts to Threatened and
Endangered Species
•
State Dept. and State Historic Preservation Offices reviewed
impacts to cultural resources under National Historic
Preservation Act.
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Keystone XL Major Permitting Processes
• Delays in the Federal Approval Process
•
•
Keystone planned its permitting schedule based on the State
Department processing of two similar Presidential Permit
applications that were processed between 2006 and 2009.
•
Keystone I -- 23 months from application to permit
•
Alberta Clipper -- 27 months from application to permit
Instead, the DOS process took 40 months, from September
2008 to January 2012 to get to a decision. The decision only
occurred in January 2012 because of a Legislative deadline
• A number of factors impacted the DOS review timeline:
•
EPA criticism of the Draft and Supplemental Draft EIS
•
BP Gulf of Mexico Spill
•
San Bruno explosion
•
ExxonMobil Yellowstone spill
• Issues around scope and process were generally resolved
in favor of broader scope and more process
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Keystone XL Major Permitting Processes
• January 18, 2012 - Decision to Deny Presidential Permit
•
60 day deadline imposed by Congress in Payroll Tax Relief
Extension bill is insufficient time for State Dept. to obtain and
assess additional information it needed
•
DOS needed additional information about potential route
alternatives in Nebraska to avoid Sandhills
•
In light of the Nebraska reroute there is incomplete
information about potential environmental, socioeconomic,
environmental justice, and cultural resources impacts
•
The project – as presented and analyzed at this time – would
not serve the National Interest
•
The determination does not preclude any subsequent permit
application or applications for similar projects
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Thank you.