Jordan Cove Energy Project, LP's CD containing their application to site, construct and operate a natural gas liquefaction and liquefied natural gas etc under CP13-483. Part 1 of 2. CD 1 of 3.

WHITEPAPER: ANALYSIS OF THE EIA EXPORT REPORT EFFECT OF INCREASED NATURAL GAS EXPORTS ON DOMESTIC ENERGY MARKETS DATED JANUARY 19, 2012 Prepared for: Jordan Cove Energy Project, L.P. Navigant Consulting, Inc. 3100 Zinfandel Drive Suite # 600 Rancho Cordova, California 95670 (916) 631-3200 www.navigantconsulting.com February 13, 2012 2012 Navigant Consulting, Inc. Disclaimer: This report was prepared by Navigant Consulting, Inc. for the benefit of Jordan Cove Energy Project, LP. This work product involves forecasts of future natural gas demand, supply, and prices. Navigant Consulting applied appropriate professional diligence in its preparation, using what it believes to be reasonable assumptions. However, since the report necessarily involves unknowns, no warranty is made, express or implied. 2012 Navigant Consulting, Inc. EIA Report Overview On January 19, 2012, the Energy Information Administration (EIA) of the U.S. Department of Energy released a report (Effect of Increased Natural Gas Exports on Domestic Energy Markets, or Report) presenting estimated impacts of liquefied natural gas export scenarios on certain aspects of the domestic energy markets. EIA performed the analysis pursuant to a request by the Office of Fossil Energy of the Department of Energy, which is responsible for evaluating applications to export liquefied natural gas. The main findings of the Report included the following: Increased natural gas exports lead to increased natural gas prices. The source of the gas volumes needed for the increased exports would be about two-thirds from increased natural gas production, with most of the balance provided by decreased natural gas consumption. Most of the increased production would be from shale gas sources, and most of the decreased consumption results from coal-for-gas fuel switching in electric generation. EIAs approach was to start with four baseline cases taken from the 2011 Annual Energy Outlook (AEO2011), which was released in April 2011; the four baseline cases are the AEO2011 Reference case, and the Low Shale EUR 1, High Shale EUR, and High Economic Growth cases. Against these four baseline cases, EIA performed four alternative export scenarios, as follows: Name Export Level Ramp-Up Low/Slow 6 Bcfd +1 Bcfd per year (or 6 years) Low/Rapid 6 Bcfd +3 Bcfd per year (or 2 years) High/Slow 12 Bcfd +1 Bcfd per year (or 12 years) High/Rapid 12 Bcfd +3 Bcfd per year (or 4 years) Thus, the Report analyzed 16 different case-scenario combinations, with emphasis on presenting production, consumption, producer revenue and consumer expenditure metrics for the four export scenarios under the Reference case baseline, and also natural gas pricing estimates under all 16 case- scenario combinations. Media reporting has already focused ...