![](media/image1.jpeg){width="8.5in"
height="3.5027777777777778in"}**U.S. DEPARTMENT OF ENERGY**

**Office of Energy Assurance**

**ENERGY ASSURANCE DAILY**

**October 25, 2004**

**Highlights / Major Developments**

**Oil and Natural Gas Hit New Record Highs on NYMEX before Sliding**

On the New York Mercantile Exchange, both oil and natural gas markets
hit record highs Monday morning before sliding in the afternoon. The
November natural gas future set a new contract high of \$8.26 per mmBtu,
while the December crude oil future hit a new all-time high of \$55.67
per barrel. Reuters, 1431 October 25, 2004

**Electricity**

**CA Energy Commission Report Warns of Energy Woes** A report by the
California Energy Commission says Southern California could see severe
electricity shortages as early as summer 2006 and Northern California
could follow two years later. WHY?: The state\'s transmission system
needs major repairs and upgrades; its fleet of aging power plants are on
the brink of retirement and new plants aren\'t being built fast enough.
Also, Southern California\'s electricity use has grown 6 percent since
last year \-- an increase three times higher than what was expected. THE
TO-DO LIST: To encourage conservation, the commission recommends rolling
out \"real-time\" pricing so electricity users pay more for power when
supplies are tightest. Commissioners also want state regulators to
loosen restrictions on the one- to five-year contracts utilities have
with independent generators. Streamlining the process for upgrading the
transmission system is also recommended.
<http://www.energycentral.com/centers/news/daily/article.cfm?aid=5211104>

**Reliant Reduces Output at Ormond Beach 1 Gas-fired Unit in CA**

Houston-based Reliant Energy Inc. reduced the power output at its
750-megawatt Ormond Beach 1 gas-fired generating station in southern
California by about 490 MW by early Monday due to unplanned reasons, the
California Independent System Operator said in a report. Reuters, 1158
October 25, 2004

**Duke\'s Moss Landing 6 & 7 Gas-fired Units in CA Back On-line**

North Carolina-based Duke Energy Corp.\'s two 755-megawatt Moss Landing
6 and 7 natural gas-fired power units in California returned to service
by late Sunday, the California Independent System Operator said in a
report. The units shut on about Oct. 18 to reroute the electric line
from the generator to the switchyard because the lines ran through five
old units that the plant\'s prior owner, San Francisco-based PG&E
Corp.\'s Pacific Gas and Electric Co. subsidiary, shut in the early
1990s.

Reuters, 0821 October 25, 2004

**TXU\'s Martin Lake 1 Coal-fired Unit in TX Shut**

Dallas-based energy company TXU Corp. shut its 750-megawatt Martin Lake
1 coal-fired power unit in Texas on Oct. 24 for boiler tube leak
repairs, the company told Texas regulators in a report. Reuters, 0829
October 25, 2004

**Alliant\'s Duane Arnold Nuclear Unit in Iowa Is Shut for Repairs**
Alliant Energy Corp.\'s 565-megawatt Duane Arnold 1 nuclear unit in
Palo, Iowa, was shut early this morning to repair a tube leak in the
main condenser. Bloomberg News, 1005 October 25, 2004

**Four Coal-fired Units in Ontario, Canada Return from Outages**

In Ontario, four units operated by OPG (Atikokan, Lakeview 1, Lambton 3
and Lennox 2) returned to service over the weekend.

Reuters, 1431 October 25, 2004

**California Company Plans 120 MW Wind Farm in Eastern New Mexico**
<http://pro.energycentral.com/professional/news/power/news_article.cfm?id=5211023>

**Petroleum**

**Hurricane Ivan Oil Production Shut-in Statistics**

Shut-in oil production is equivalent to 25.07% of daily production of
oil in GOM, which is approximately 1.7 million BOPD.  The 426,172
barrels per day that is currently shut-in is approximately 2.16% of the
19.7 million barrels consumed in the U.S. each day. The cumulative
shut-in oil production for the period 9/11/04-10/25/04 is 23,846,139
bbls, which is equivalent to 3.941% of the yearly production of oil in
the GOM which is approximately 605 million barrels.

<http://www.mms.gov/ooc/press/2004/press1025.htm>

**Marathon Reduces Fuel Output During Repairs at Ohio Refinery**
Marathon Ashland Petroleum LLC, the largest refiner in the U.S. Midwest,
said gasoline and diesel production will be reduced at its Canton, Ohio,
refinery for a few weeks during equipment repairs. Bloomberg News, 1118
October 25, 2004

**Oil-Tanker Rates From Middle East Surge to Record** Oil-tanker rates
for shipping crude from the Middle East to Asia reached a record high
for a fourth week as refiners boosted fuel imports ahead of the northern
hemisphere winter amid soaring oil prices. Bloomberg, 0931 October 25,
2004

**Crude Oil Prices Fall as Norway\'s Government Ends Labor Dispute**
Crude oil futures in New York fell, after reaching a record, as
Norway\'s government intervened to end a labor conflict that threatened
output from the world\'s third-biggest oil exporter. The intervention
comes after ship and rig owners today threatened a lockout of workers
next month that would have halted all of Norway\'s
3-million-barrel-a-day oil output.
<http://biz.yahoo.com/rb/041025/markets_oil_4.html>
<http://www.forbes.com/energy/2004/10/25/cx_da_1025topnews.html?partner=yahoo&referrer>=
Bloomberg News, 1217 October 25, 2004

[**Reserve Is Eyed as Heating Oil Price
Soars**](http://www.energyintel.com/DocumentDetail.asp?document_id=133635)\
Soaring heating oil prices are prompting Northeastern lawmakers to prod
the Department of Energy to consider using the Northeast Heating Oil
Reserve if the price level turns dire for consumers. For three
consecutive weeks \-- since the official onset of the heating oil season
this month \-- prices have been setting records. Oil Daily, October 25,
2004

**Petroleos Venezuela Suspends Union Contract Talks** Petroleos de
Venezuela SA, South America\'s largest oil producer, said it suspended
labor talks on a new contract covering 50,000 workers while it asks the
Supreme Court to decide a dispute among its five unions. Petroleos de
Venezuela\'s contract with its 50,000 workers, both direct and
subcontracted employees, expired Oct. 21. Bloomberg News, 1328 October
25, 2004

**Natural Gas**

**Hurricane Ivan Gas Production Shut-in Statistics**

Shut-in gas production is equivalent to 12.33% of the daily production
of gas in the GOM, which is approximately 12.3 BCFPD.  The 1,517.08 MMCF
per day that is currently shut-in is approximately 2.52% of the 60.184
BCF consumed in the U.S. each day.** ** The cumulative shut-in gas
production 9/11/04-10/25/04 is 98.671 BCF, which is equivalent to 2.217%
of the yearly production of gas in the GOM which is approximately 4.45
TCF.

<http://www.mms.gov/ooc/press/2004/press1025.htm>

**Media Advisory: Construction begins on Bear Head LNG Terminal Oct 28**
Anadarko Canada Corporation will conduct a ground-breaking ceremony for
its Bear Industrial Park Liquefied Natural Gas (LNG) Terminal in Point
Tupper, Nova Scotia on Thursday, October 28, 2004.
[http://powermarketers.netcontentinc.net/newsreader.asp?ppa=8knpp%5EZklkrwpnXUhd%23%3A%40%24bfej%5B%21](http://powermarketers.netcontentinc.net/newsreader.asp?ppa=8knpp^ZklkrwpnXUhd%23%3A@$bfej%5B!)

**Other News**

[***New Law Yields Energy
Incentives***](http://www.energyintel.com/DocumentDetail.asp?document_id=133718)

On Friday President Bush signed into law a bill passed by the U.S.
Senate on October 11 that provides a variety of tax incentives for
production of renewable energy as well as for traditional fossil fuel
energy sources.

Oil Daily, October 25, 2004

**Energy Prices**

+-------------------------------+-----------+-----------+------------+
|                               | **Latest  | **Week    | **Year     |
|                               | (10       | Ago**     | Ago**      |
|                               | /25/04)** |           |            |
+-------------------------------+-----------+-----------+------------+
| **CRUDE OIL**                 | 56.17     | 53.59     | 29.99      |
|                               |           |           |            |
| **West Texas Intermediate     |           |           |            |
| US**                          |           |           |            |
|                               |           |           |            |
| \$/Barrel                     |           |           |            |
+-------------------------------+-----------+-----------+------------+
| **NATURAL GAS**               | 7.17      | 5.64      | 4.78       |
|                               |           |           |            |
| **Henry Hub**                 |           |           |            |
|                               |           |           |            |
| \$/Million Btu                |           |           |            |
+-------------------------------+-----------+-----------+------------+

> Source: Reuters

**This Week in Petroleum** from the Energy Information Administration
(EIA)

[*http://tonto.eia.doe.gov/oog/info/twip/twip.asp*](http://tonto.eia.doe.gov/oog/info/twip/twip.asp)

Updated on Wednesdays

**Weekly Petroleum Status Report** from EIA**\
**[*http://www.eia.doe.gov/oil_gas/petroleum/data_publications/weekly_petroleum_status_report/wpsr.html*](http://www.eia.doe.gov/oil_gas/petroleum/data_publications/weekly_petroleum_status_report/wpsr.html)

Updated after 1:00pm (Eastern time) on Wednesdays

**Natural Gas Weekly Update** from EIA

[*http://tonto.eia.doe.gov/oog/info/ngw/ngupdate.asp*](http://tonto.eia.doe.gov/oog/info/ngw/ngupdate.asp)

Updated after 2:00 pm (Eastern time) on Thursdays