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

**Office of Energy Assurance**

**ENERGY ASSURANCE DAILY**

###### August 11, 2004

**Highlights/Major Developments**

**UPDATE - ChevronTexaco Shuts In Crude, Natgas Production in Gulf\
**ChevronTexaco Corp today shut in 48,000 barrels per day (bpd) of crude
oil production and 72 million cubic feet per day of natural gas
production in the Gulf of Mexico because of Tropical Storm Bonnie. In
addition, 618 workers deemed not essential to the production platforms
have been evacuated since Tuesday from the Typhoon and Genesis fields
which lie due south of Morgan City, Louisiana, in the Gulf of Mexico.
The production shut-ins occurred overnight.

Reuters Wednesday August 11, 10:26

<http://biz.yahoo.com/rc/040811/energy_chevron_storm_2.html>

**Marathon Shuts More Natgas in Gulf Due to Bonnie**\
Marathon Oil Co. today shut an additional 44 percent of natural gas
production in preparation for Tropical Storm Bonnie in the Gulf of
Mexico. Marathon shut 128 to 130 million cubic feet per day of natural
gas production, up from 90 mmcfd on Tuesday It also boosted its shut
crude production to 7,000 barrels per day from 2,000 bpd. The increase
in shut production occurred overnight.\
Reuters: August 11, 2004, 10:02.\
<http://biz.yahoo.com/rc/040811/energy_marathon_usgulf_1.html>

**Apache Says Evacuates 185 in Gulf of Mexico**\
Apache Corp. according to a company spokesman has evacuated 185 platform
workers in the eastern Gulf of Mexico as a precaution because of
oncoming storms. Apache\'s production is concentrated in the central and
western portions of the Gulf. On Tuesday, Apache announced \"mininum
production shut-in\".\
Reuters August 11, 9:57.\
<http://biz.yahoo.com/rc/040811/energy_apache_storm_2.html>

**Anadarko Shuts In Natgas, Crude Output In Gulf Due to Storm**\
Anadarko Petroleum Corp. on Wednesday shut 28,000 barrels per day (bpd)
of crude oil production and 22 million cubic feet per day of natural gas
production in the Gulf of Mexico because of Tropical Storm Bonnie. The
company also evacuated 13 workers from the Marco Polo platform. The
company initially announced an evacuation at its Marco Polo field in the
U.S. Gulf and had indicated that the evacuation would not affect
production. The duration of the shutdown was not known.\
Reuters: August 11, 9:44.\
<http://biz.yahoo.com/rc/040811/energy_anadarko_storm_1.html>

**Electricity**

# 

# CMS Shut Palisades Nuke for Work CMS Energy Corp. shut the 789 megawatt Palisades nuclear unit in Michigan late Tuesday to replace two control rod drive seals. A company spokesman said the company would return the unit to service after the work was completed, but could not say how long it would take due to competitive reasons. The Palisades station is located in South Haven, Michigan, about 60 miles southwest of Grand Rapids, Michigan. **Wednesday August 11, 7:18 am ET** [**http://biz.yahoo.com/rc/040811/utilities_cms_palisades_2.html**](http://biz.yahoo.com/rc/040811/utilities_cms_palisades_2.html)

#### Two Units at AEP\'s Welsh Coal Power Plant Shut

American Electric Power Co Inc.'s 528 megawatt units 2 and 3 at the
Welsh coal-fired power station in Texas were shut for repairs and
maintenance, Texas regulators said in a report Wednesday. The reports
said unit 3 shut on Aug. 10 for maintenance of the boiler and
precipitator, but was expected to restart from Aug. 11-15. Unit 2,
meanwhile, was forced out of service due to a boiler tube leak. The
repairs of which were expected to last until about August 12.

Reuters 8/11/04 8:58

**Nuclear Energy Institute Calls Exelon-DOJ Used Fuel Settlement
\'Hugely Significant\'\
**Exelon Corp. and the U.S. Department of Justice announced today they
have reached a settlement under which the government will reimburse
Exelon for costs associated with storage of used nuclear fuel at the
company\'s nuclear power stations pending the Department of Energy\'s
fulfillment of its contractual obligations to accept used nuclear fuel.
The agreement is very important, and will be closely reviewed by other
utilities, according to a statement by statement by Nuclear Energy
Institute Executive Vice President Angie Howard.\
[http://powermarketers.netcontentinc.net/newsreader.asp?ppa=8knpp%5EZjmimpnqWTebt%3EEvbfej%5Bv](http://powermarketers.netcontentinc.net/newsreader.asp?ppa=8knpp^ZjmimpnqWTebt>Evbfej%5Bv)

#### US DOE, Utilities to Install Enhanced Grid Monitoring System

The Phasos Project a joint project by the US Dept. of Energy and several
utilities will allow allow grid operators to see conditions in other
regions that could affect operations in their territory. The DOE
believes that it will play a large role in preventing another blackout
like the one that occurred in August of 2003. Ameren, TVA, AEP Entergy
are among the utilities where the project will begin later this month.
The project is designed to cover major transmission corridors and it
samples grid conditions on a much faster basis than existing systems.
Future system could allow for automated control of grid operations,
leading to the type of \"self-healing grid,\" a goal that many in the
electric industry have been pursuing for years.

[http://www.platts.com/Electric%20Power/headlines.jsp](http://www.platts.com/Electric Power/headlines.jsp)

**Petroleum**

#### Saudi says its oil installations safe from attack

Top world oil exporter Saudi Arabia moved to calm soaring world crude
oil markets on Wednesday, reassuring customers its oil installations
were safe from terror attacks amid concerns about Middle East security.
Saudi Arabia foreign affairs adviser Adel al-Jubeir said that the
possibility of an attack on his nation\'s crude oil production and
refining infrastructure is \"very very far-fetched.\" After hitting a
record \$45.04 on Tuesday, partly on news of a surpise draw on U.S.
commercial crude stockpiles last week, September oil futures on the
NYMEX were down 14 cents to \$44.40 in afternoon trading on Wednesday.
\"The oil fields and the oil facilities are very well protected,\"
al-Jubeir said in a conference call with reporters. \"The facilities are
heavily engineered \-- they have redundancies built into them.\"

12:40 11Aug2004 Reuters

#### Iraq Pumps Oil Despite Chaos in South

Iraqi crude continued to flow Tuesday, although at reduced rates, as
Iraqi oil officials and the country\'s interim government struggled to
control the southern oil province and the country\'s revenue lifeline.
Supporters of rebel Shiite cleric Moqtada al-Sadr continued to wreak
havoc in the region, threatening to split the south from the central
government, Iraqi and industry sources said. U.S. marines said on
Wednesday they were preparing a final assault on Iraqi Shi\'ite militia
in the holy city of Najaf, after a radical cleric ordered his men to
keep fighting even if he was killed. \"If the U.S. forces attacked Najaf
tonight, we will blow up the oil pipelines,\" Sheikh Asaad al-Basri, the
Basra leader of the Mehdi Army militia loyal to Moqtada al-Sadr, told
Reuters in the southern city of Basra.

Reuters, August 11, 2004, various stories

<http://www.energyintel.com/PublicationHomePage.asp?publication_id=8>

#### Iraqi Oilfields Pumping 40,000 Bbl/Hour to Southern Storage Tanks

Iraq\'s southern crude fields are continuing to pump some 40,000
bbl/hour, about 960,000 b/d into storage tanks. The fields resumed
production on Tuesday, after being forced to shut-in Monday by threats
to the Southern Oil Company from Shiite militiamen. The level of
pipeline deliveries from the oilfields through the pipeline continued to
be less than the amount of oil being loaded into ships. Pumping was at
the rate of 40,000 b/hour, ships were being loaded at a rate of about of
70,000 b/hour.

Platts August 11 2004

<http://www.platts.com/Oil/Resources/>

# Natural Gas

#### Liquefied Natural Gas Plant Could Ease New England Demand

A proposed liquefied natural gas plant to be located New Brunswick could
meet nearly half of New England\'s demand for gas has won key regulatory
approvals. The development could impact plans for other such facilities
in the northeast. The \$570 million New Brunswick project of Irving Oil
Corp is now closer to construction than most proposals in New England.
Some officials doubt the Irving plan could eliminate the need for
increased LNG capacity in southern New England. Massachusetts Energy
Resources Commissioner David L. O\'Connor said the Irving project
\"won\'t significantly alter the need for continued deliveries of LNG to
the region, but it could be a small but beneficial addition to the
supply of vapor gas.

Boston Globe August 10 2004

<http://pro.energycentral.com/professional/news/gas/news_article.cfm?id=5042987>

#### NYMEX Natgas Sinks Midday as Storm Fears Fade

NYMEX natural gas futures sold off sharply midday Wednesday, pressured
by moderate U.S. weather forecasts and fading concerns that storms in
the Gulf of Mexico and the Caribbean would significantly disrupt
offshore gas production, traders said. At 12:50 p.m. EDT, September
futures slumped 19.1 cents, or 3 percent, to \$5.60 per million British
thermal units after trading between \$5.565 and \$5.70. October was 17.9
cents lower at \$5.74. Other months were down 0.9 to 12.1 cents. While
the track of Bonnie takes it through key production zones in the eastern
Gulf, traders noted the storm was still small and was only packing winds
of about 50 mph, so it was not likely to significantly threaten output.
In addition, traders said Tropical Storm Charley, which was located
about 110 miles south-southeast of Jamaica with maximum sustained winds
near 70 mph, was now expected to head towards Florida instead of
straight into the Gulf, lessening its threat to oil and gas production.
Gas pipeline operators on Wednesday reported only minimal cuts so far
from the storms, with Williams reporting 300 mmcfd cut on Transco and 60
mmcfd shut on Gulfstream and El Paso reporting about 130 mmcfd of
reduced supply on Southern Natural gas.

12:59 11Aug2004 RTRS

**Other**

# MPSC Approves Recovery of \$20.2 Million in Enhanced Security Costs 

The Michigan Public Service Commission on Tuesday approved a settlement
agreement that authorizes Consumers Energy Company to recover
\$20,203,509 in enhanced security costs for the period Sept. 11, 2001
through Dec. 31, 2005. The Customer Choice and Electricity Reliability
Act, as amended in 2003, allows for the recovery of costs of new and
enhanced security measures incurred before Jan. 1, 2006 that are
required by federal or state regulatory security requirements issued
after Sept. 11, 2001 or determined to be necessary by the Commission to
provide reasonable security from an act of terrorism. In this regard,
the settlement notes that the Nuclear Regulatory Commission issued
orders to the electric industry after Sept. 11, 2001 dealing with
facility access authorization, vehicle barrier systems, an increase in
the design basis threat and sites with an existing dry cask storage
system.

<http://www.energycentral.com/centers/news/daily/article.cfm?aid=5042796>

**Energy Prices**

+-------------------------------+-----------+-----------+------------+
|                               | **Latest  | **Week    | **Year     |
|                               | (8        | Ago**     | Ago**      |
|                               | /11/04)** |           |            |
+-------------------------------+-----------+-----------+------------+
| **CRUDE OIL**                 | 44.72     | 42.73     | 31.91      |
|                               |           |           |            |
| **West Texas Intermediate     |           |           |            |
| US**                          |           |           |            |
|                               |           |           |            |
| \$/Barrel                     |           |           |            |
+-------------------------------+-----------+-----------+------------+
| **NATURAL GAS**               | 5.64      | 5.70      | 5.08       |
|                               |           |           |            |
| **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