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

**Office of Electricity Delivery and\
Energy Reliability**

**ENERGY ASSURANCE DAILY**

**October 31, 2005**

## Highlights/Major Developments

**Update: Hurricanes Katrina, Rita, and Wilma**

For the latest damage assessment and restoration efforts concerning
hurricanes, see the latest Gulf Coast Hurricanes situation report from
the Office of Electricity Delivery and Energy Reliability (OE) of the
U.S. Department of Energy @
[[http://www.oe.netl.doe.gov]{.underline}](http://www.oe.netl.doe.gov/).
For the statistics on shut-in oil and gas production in the Gulf of
Mexico, please click on the following link:
[[http://www.mms.gov/]{.underline}](http://www.mms.gov/). For statistics
on shut-in oil and gas production and pipeline status in Louisiana,
please click on the following link:
<http://dnr.louisiana.gov/sec/execdiv/pubinfo/daily-onshore-prod.ssi>

**Damage Assessment Updates**

**Devon Anticipates that Storm Damage Will Reduce Fourth Quarter
Production by 3 Million BOE**

On October 28, Devon Energy announced that it expects as a result of
damage from hurricanes Katrina and Rita that its production for the
fourth quarter of the year will be approximately 3 million boe less than
originally projected.

[http://powermarketers.netcontentinc.net/newsreader.asp?ppa=8kowu%5D%5BfdkminmRUnj%23%3A%40%24bfek%5Cv](http://powermarketers.netcontentinc.net/newsreader.asp?ppa=8kowu%5D%5BfdkminmRUnj%23%3A@$bfek\v)

**Update: Borco Terminal in Bahamas Partially Reopened**

The Borco Oil Terminal in the Bahamas that declared force majuere
following significant damage from Hurricane Wilma, partially reopened on
October 31. The facility was open only to small craft (containing up to
40,000 tons of fuel or are a maximum of 650 ft in length). PDVSA, owner
of the facility provided no indication when the terminal would resume
full-scale operations.

Reuters 13:41, October 31, 2005.

**Update: FPL St Lucie Unit 2 Back at Full Power**

The 839 MW unit 2 at FPL's St Lucie nuclear generating station in
Florida returned to full power by early on October 31. The unit had been
taken off line in preparation for the approach of Hurricane Wilma.

Reuters 8:02, October 31, 2005.

######## Electricity

**FPL Rejected Warnings from State Regulators that Inspection of Utility
Poles was Inadequate**

In July 2005, the Florida Public Service Commission issued a report
critical of the efforts by Florida Power and Light (FPL) to inspect its
power poles. FPL rejected the criticism at the time but has indicated
that pole failure was a major factor in the power outages caused by
Hurricane Wilma. The company is investigating the cause of the pole
failures.

Source: South Florida Sun-Sentinel, October 28, 2005

[http://powermarketers.netcontentinc.net/newsreader.asp?ppa=8knpp%5E%5Bfdjlowy%5BUnj%23%3A%40%24bfek%5Cv](http://powermarketers.netcontentinc.net/newsreader.asp?ppa=8knpp^%5Bfdjlowy%5BUnj%23%3A@$bfek\v)

**Transformer Fire Shuts Unit 1 at Hatch Nuclear Generating Station**

A fire in a transformer shut down the 869 MW unit 1 at Southern
Company's Hatch nuclear generating station in Baxley, Georgia. The fire
occurred in a transformer outside the turbine building, the cause of the
fire is under investigation. The company gave no indication when the
unit would return to service.

Bloomberg 9:31, October 31, 2005.

**Peach Bottom Unit 3 Down to 71 Percent of Capacity**

Output at the 1,112 MW unit 3 at Exelon's Peach Bottom nuclear
generating station in Pennsylvania dropped to 71 percent of capacity by
early morning October 31 according the daily report of the Nuclear
Regulatory Commission.

Reuters 7:30, October 31, 2005.

**Dominion's Surry Unit 1 Exits Outage**

Dominion's 810 MW unit 1 at the Surry nuclear generating station exited
an outage and had ramped up to 80 percent of capacity by early morning
October 31. The unit was shut on October 19 to investigate a vibration
in a cooling pump.

Reuters 8:17, October 31, 2005.

**Update: Entergy's Pilgrim Back at Full Power**

The 684 MW Pilgrim nuclear generating station in Massachusetts returned
to full power by early morning October 31. Entergy reduced output at the
facility last week to perform a thermal condenser backwash cleaning
following a storm with unusually rough seas that forced debris into the
system.

Reuters 7:24, October 31, 2005.

**Update: Turkey Point 3 to remain at about 60 percent through midweek
-- FPL**

FPL announced that unit 3 at the Turkey Point nuclear generating station
would remain at 60 percent of capacity while debris is removed from a
cooling canal at the facility. FPL estimated that the work would be
completed by midweek. The company also indicated that unit 4 would
restart once unit 3 has been restored to full capacity.

Reuters 16:23, October 31, 2005

For information on damage and restoration efforts to the electricity
infrastructure and the number of power outages due to Hurricanes Wilma,
Rita and Katrina, please see the Gulf Coast Hurricane situation report
from the Office of Electricity Delivery and Energy Reliability (OE) of
the U.S. Department of Energy at the following link:
[http://www.oe.netl.doe.gov](http://www.oe.netl.doe.gov/)

######## Petroleum

**Oil Drops Below \$60/bbl, Lowest in Three Months**

The price of crude oil on the NYMEX closed below \$60 for the first time
since July 27. The drop was attributed to a combination of reduced
demand and unusually warm weather. The price closed at \$59.76 (down
\$1.46/bbl).

Reuters 15:38, October 31, 2005.

EIA's Long-term Forecast Calling for Mideast Oil Supply to Nearly Double
by 2025 Seen as Unrealistic by Some

The latest long-term forecast by the Energy Information Administration
calls for the supply of oil from the Middle East to climb to 39 million
b/d by 2025, nearly doubling the current output. Petroleum Intelligence
Weekly reports that the ability of the six producing countries to meet
the projected jump in output is seen by some to be unrealistic.

PIW, October 31, 2005

**Update: Strike Begins at Largest Refinery in Europe**

Workers at Shell's 418,000 b/d Pernis refinery in the Netherlands began
a strike over a dispute concerning pension benefits. Operations at the
largest refinery in Europe began to be scaled down at 18:00 local time
when an ultimatum from Shell expired. Although the strike poses no
immediate threat to winter supplies, if the labor action persists over
an extended period, supplies of gasoline and winter heating oil could be
impacted.

Reuters 13:22, October 31, 2005.

**Statoil Sees Startup of Kristen Field Soon**

On October 31, Statoil announced that it anticipates production to begin
at its Kristin field this week. The gas and condensate field is located
in the Norwegian Sea and is expected to produce some 18 million cubic
meters of gas and 126,000 b/d of condensate per day.

Reuters 8:27, October 31, 2005.

**Russia Forecasts Growth in Oil Production to Slow in 2006**

The head of the Federal Energy Agency in Russia announced on October 31
that an optimistic forecast for oil production in 2006 is for growth to
slow to about 2.0 percent, down from 2.5 percent achieved during 2005.

Reuters 4:22, October 31, 2005.

For information on damage and restoration efforts to the petroleum
infrastructure due to Hurricanes Wilma, Rita and Katrina, please see the
Gulf Coast Hurricane situation report from the Office of Electricity
Delivery and Energy Reliability (OE) of the U.S. Department of Energy at
the following link:
[http://www.oe.netl.doe.gov](http://www.oe.netl.doe.gov/).

######## Natural Gas

### Natural Gas Futures Price Falls 6 Percent on Storage and Warm Weather

A combination of unusually warm weather, falling spot prices, and a
robust amount of gas in storage contributed to a drop of some 6 percent
in the near month contract for natural gas. December natural gas closed
at \$12.205 /million Btu, a drop of 85¢/million Btu, to reach the lowest
price in four weeks.

Reuters 15:22, October 31, 2005.

### Open Season for Williams Sentinel Expansion Project Announced

On October 31, Williams announced an open season for the Sentinel
Expansion Project on its Transco natural gas pipeline system. The
project will serve the northeast and is expected to be in operation in
November 2008. The expansion will provide between 200,000 and 300,000
dth/d of gas, the final size of the expansion to be determined by the
response to the open season.

<http://biz.yahoo.com/prnews/051031/dam022.html?.v=28>

**Cove Point LNG Project Gets Favorable Draft Report from FERC**

On October 28, the Federal Energy Regulatory Commission released a draft
environmental report on the plan by Dominion Resources to expand the
Cove Point LNG import terminal in Maryland. The Commission will now take
comments on the report as the staff begins to draft the final report.

<http://pro.energycentral.com/professional/news/gas/news_article.cfm?id=6055729>

[http://powermarketers.netcontentinc.net/newsreader.asp?ppa=8kowu%5D%5BfdkminmRUnj%23%3A%40%24bfek%5Cv](http://powermarketers.netcontentinc.net/newsreader.asp?ppa=8kowu%5D%5BfdkminmRUnj%23%3A@$bfek\v)

**Public Service Commission Cites New York Gas LDC for Inaction on
Storage**

The New York Public Service Commission took what it called
"extraordinary actions" regarding a local distribution company for lack
of preparedness and issues of reliability. The actions (including an
order to demonstrate why a temporary operator should not be appointed
for the utility) stemmed from the failure of the Corning Natural Gas
Corp. to have an adequate supply of gas in storage for the coming
winter.

Natural Gas Intelligence, October 28, 2005

[http://powermarketers.netcontentinc.net/newsreader.asp?ppa=8kowu%5D%5BfdkminmRUnj%23%3A%40%24bfek%5Cv](http://powermarketers.netcontentinc.net/newsreader.asp?ppa=8kowu%5D%5BfdkminmRUnj%23%3A@$bfek\v)

**New \$375 Million Texas-Louisiana Gas Pipeline Planned by
CenterPoint**

CenterPoint Energy Inc will construct a 168-mile \$375 million natural
gas pipeline from Carthage, Texas to Perryville Louisiana. The new line,
connecting to CenterPoint's Hub in Perryville will provide access to
markets in the Midwest and northeast. Pending regulatory approval, the
new line with a capacity of approximately 1Bcf is expected to be in
operation as early as the winter season of 2006-7.

<http://www.gadsdentimes.com/apps/pbcs.dll/article?AID=/20051029/APF/510290718&template=variable>

For information on damage and restoration efforts to the natural gas
infrastructure due to Hurricanes Wilma, Rita and Katrina, please see the
Gulf Coast Hurricane situation report from the Office of Electricity
Delivery and Energy Reliability (OE) of the U.S. Department of Energy at
the following link:
[http://www.oe.netl.doe.gov](http://www.oe.netl.doe.gov/).

######## 

######## Other News

**New Biofuel Plant Has Unique Approach to Energy Needs and Recycling**

The proposed E3 Biofuels Complex to be constructed near Mead, Nebraska
will be the first plant in the U.S. to be built in conjunction with a
cattle feed lot. The plant will run on the methane produced from cattle
manure. The cattle will be fed on byproducts from the corm used to make
the ethanol. The company estimates that the plant will produce 20
million gallons of ethanol annually and that the cost of the fuel
produced will range from between 30 to 50 cents less per gallon because
of the fuel source and recycling aspects of the project.

[http://powermarketers.netcontentinc.net/newsreader.asp?ppa=8knpp%5E%5BfdirpihRUnj%23%3A%40%24bfek%5Cv](http://powermarketers.netcontentinc.net/newsreader.asp?ppa=8knpp^%5BfdirpihRUnj%23%3A@$bfek\v)

######## Energy Prices 

+-------------------------------+-----------+-----------+------------+
|                               | **Latest  | **Week    | **Year     |
|                               | (10       | Ago**     | Ago**      |
|                               | /31/05)** |           |            |
+-------------------------------+-----------+-----------+------------+
| **CRUDE OIL**                 | 59.80     | 60.93     | 50.10      |
|                               |           |           |            |
| **West Texas Intermediate     |           |           |            |
| US**                          |           |           |            |
|                               |           |           |            |
| \$/Barrel                     |           |           |            |
+-------------------------------+-----------+-----------+------------+
| **NATURAL GAS**               | 12.18     | 12.95     | 6.98       |
|                               |           |           |            |
| **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