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

**Office of Energy Assurance**

**ENERGY ASSURANCE DAILY**

###### July 7, 2004

**Highlight / Major Developments**

**Substation Fire Poses Blackout Threat in Phoenix**\
Phoenix faces the threat of rolling blackouts on Wednesday after a fire
at a major power substation reduced the amount of electricity that could
be moved into the city, a utility spokesman said. With temperatures in
Phoenix seen climbing to around 109 to 110 degrees Fahrenheit on
Wednesday. Arizona Public Service and the Salt River Project are asking
customers to conserve electricity during peak-use hours, 3 p.m. and 6
p.m., to avoid blackouts. The fire broke out at the West Wing substation
in the metropolitan Phoenix area on Sunday. Authorities suspect the
fires and an explosion Sunday at the substation were caused by a
mechanical problem. APS and SRP say they have adequate energy to meet
the electricity needs of the Phoenix area. The problem is finding ways
to route it to homes and businesses while the substation is shut down.
It took until late Tuesday evening to totally control the blaze and put
it out. APS spokesman Bunnell said the utility lost five of the 14
transformers at the substation due to the fire. It is currently
operating at about one-third of its normal capacity. He added it would
probably remain at one-third capacity at least through the end of the
week, adding APS was aggressively contacting other utilities seeking to
either borrow or purchase replacement equipment. West Wing is one of
four major substations which support the entire Phoenix area.
<http://biz.yahoo.com/rc/040706/utilities_aps_phoenix_1.html>
<http://kvoa.com/Global/story.asp?S=2002822>

**Two Louisiana Ports Ordered Shut Over Security**\
The U.S. Coast Guard has ordered the closure of two facilities in
Louisiana that handle natural gas liquids and petroleum products for
failure to comply with new maritime security codes, the Coast Guard said
on Wednesday. An NGL fractionation plant operated by Enterprise Products
Partners LP and a products terminal operated by El Paso Corp., both
located in Geismar, Louisiana, were closed for their non-compliance with
the new stringent port security laws, the Coast Guard\'s Lt. Aaron Demo
said. The closures are not expected to have much impact on the NGL or
oil products markets, according to one of the operating companies.
Enterprise said it would send the 30,000 barrels per day of NGLs the
plant typically handles through an alternative pipeline for
fractionation elsewhere until the facility becomes compliant. \"We have
some things that we need to do at the fractionation plant (to make it
compliant). But our operations really are not affected because we have
the pipeline,\" said company spokesman Randy Burkhalter. He estimated it
would take about two weeks to bring the fractionation plant into
compliance.
<http://biz.yahoo.com/rc/040707/energy_security_ports_1.html>

**Electricity**

**Power Outage Delays Flights in Boston**

A power outage at a Logan International Airport terminal shut down
security screening systems and other equipment on the afternoon of
Monday, July 5, delaying dozens of flights. The outage lasted more than
four hours and was caused by a problem at two electric substations,
according to Phil Orlandella, a spokesperson for Boston\'s Massachusetts
Port Authority. The outage shut down security screening systems, the
equipment used to process passengers and luggage, as well as elevators
and escalators in Terminal E, Orlandella said. It also delayed 15
international flights and 13 domestic flights, he said. The
Transportation Security Administration screened passengers and checked
luggage by hand before power was restored Monday evening, Orlandella
said. The cause of the outage was under investigation.\
[*http://hosted.ap.org/dynamic/stories/B/BRF_AIRPORT_OUTAGE?SI
TE=VTRUT&SECTION=HOME&TEMPLATE=DEFAULT*](http://hosted.ap.org/dynamic/stories/B/BRF_AIRPORT_OUTAGE?SITE=VTRUT&SECTION=HOME&TEMPLATE=DEFAULT)

**Entergy's Vermont Yankee Nuke Exits Outage**\
Entergy Corp.'s 510 megawatt Vermont Yankee nuclear unit in Vermont
exited a work outage and ramped up to 37 percent of capacity by early
Wednesday, the Nuclear Regulatory Commission said in its power reactor
status report. The unit had been shut since about June 18 when a fire
damaged the outside of the units main transformer. One MW can power
1,000 homes.
<http://biz.yahoo.com/rc/040707/utilities_entergy_vermontyankee_1.html>

**Southern Raises Power at Ga. Hatch 1 Nuke**\
Southern Co. said Wednesday it was increasing power at its 924 megawatt
Hatch 1 nuclear unit in Georgia after reducing the unit to look at a
problem in the transmission switchyard. A spokeswoman at Southern,
Regina Waller, said the company reduced power due to a voltage
fluctuation in the switchyard that caused one of the breakers to act
slower than normal. The company reduced power to check on the breaker
and found that everything was \"fine\", she said. The unit was operating
at about 62 percent of capacity early Wednesday, down from full power on
Tuesday. One megawatt powers about 1,000 homes.
<http://biz.yahoo.com/rc/040707/utilities_southern_hatch_2.html>

**Dominion Starts 1,180 MW Pa. Gas-fired Power Plant**\
Dominion Resources Inc. unit Dominion Generation said Wednesday its
1,180 megawatt Fairless Energy natural gas-fired power plant in
Pennsylvania began commercial operation in time for peak summer demand.
The Fairless Energy plant, in Falls Township, Pennsylvania, consists of
two gas-fired, combined-cycle units, each capable of generating 590 MW.
<http://biz.yahoo.com/rc/040707/utilities_dominion_plant_1.html>

**Siemens Is Awarded Three Transmission Projects From Entergy
Corporation**

Entergy Corporation has awarded three high voltage transmission projects
to Siemens Power Transmission & Distribution, Inc. The new installations
will help Entergy increase reliability and capacity on its power
transmission system to help meet increasing demand in its Western
Service Area. The three FACTS (Flexible AC Transmission Systems)
projects will include two Static VAR Compensators (SVC) and one Fixed
Series Capacitor (FSC) that will be built at three primary Entergy
substations in Texas and Louisiana.

Numerous system upgrades are underway in Entergy\'s Western Service Area
including a new 230kV transmission line from China, TX to Porter, TX,
about 25 miles north of Houston. The Fixed Series Capacitor (FSC) will
be installed at the mid-point of this transmission line, and will
improve power flow and provide for 70% compensation of the line.

[http://www.prnewswire.com](http://www.prnewswire.com/)

**Petroleum**

**Gas Price Below \$1.90, Lowest in 9 Weeks**\
The average price U.S. drivers pay for gasoline fell below \$1.90 a
gallon for the first time in nine weeks, but crude oil costs are on the
rise, the government said on Tuesday.
<http://biz.yahoo.com/rb/040706/energy_gasoline_price_1.html>
<http://money.cnn.com/2004/07/06/markets/gasoline_price.reut/index.htm?cnn=yes>

**Chevron Plans Restart of El Segundo Refinery Reformer**\
ChevronTexaco Corp. pans to restart a steam methane reformer that
produces hydrogen for use in gasoline and jet fuel at its
273,000-barrel-per-day refinery in El Segundo, California, this week,
sources familiar with refinery operations said on Wednesday. he
reformer\'s shutdown last week pushed Los Angeles spot gasoline prices
up 7 cents. The reformer was shut to make unplanned repairs to the unit,
which mixes methane with steam at high temperatures and pressures in the
presence of a catalyst to extract hydrogen.
<http://biz.yahoo.com/rc/040707/energy_chevron_elsegundo_2.html>

# US Restricts 3 Oil Tankers in Security Crackdown

The United States restricted operations of three oil tankers calling at
its ports from July 1 to July 5 under new United Nations maritime
counter-terrorism laws but did not deny them entry, the U.S. Coast Guard
said on Wednesday. The tankers were the Kuwait-flagged 106,000-tonne
crude carrier the \"Album\" steaming from Skikda, Algeria; the
17,500-tonne petroleum product tanker \"Lake Eva;\" and the smaller
7,000-tonne Panamanian-flagged Golden Craig. It was not known whether
the tankers were fully loaded or what they were carrying.

Reuters, July 7, 2004 1544

**Oil Drops as Nigeria Returns, Hike Seen**\
Total Friday stopped production of all its 235,000 barrels a day and 187
million cubic feet of gas after a worker dispute over reorganization.
The company tried to restart production Tuesday, but backed off after
the union threatened to strike. Total SA has declared force majeure on
its crude oil and natural gas production in Nigeria, a company
spokeswoman said Tuesday. Oil prices fell on Wednesday after top
producer Saudi Arabia confirmed the OPEC oil cartel would go ahead with
plans to increase output and as a Nigerian union agreed to resume oil
production after a five-day halt. French oil major Total\'s 225,000 bpd
of Nigerian oil production will resume immediately, after the company
agreed to the union\'s key demand of more senior jobs for Nigerians, a
union source said. <http://biz.yahoo.com/rb/040707/markets_oil_6.html>

<http://pro.energycentral.com/professional/news/gas/news_article.cfm?id=4970809>

**Premcor Crude Unit at Port Arthur is Down, Sources Say**\
The crude unit at Premcor Refining Group\'s 260,000 b/d facility in Port
Arthur, Texas, is down, according to sources. Traders outside the
company said they\'d been told the unit would be down for about a week.
The unit went off line Tuesday at about 6 a.m. when a heater leak
developed.\
OPIS Price Watch Alert, 1932 July 6, 2004 and 1035, July 7, 2004

**Basra Oil Terminal Loading Near Full Capacity: Port Agents**

Iraq\'s key Basra Oil Terminal is loading crude oil at near full
capacity, port agents said Wednesday. \"The pipelines that lead to the
terminal were tested yesterday (Jul 6) at 1530 hours local time (1130
GMT) and two tankers \[Neptune and British Pioneer\] are now loading,\"
one agent said. A senior Iraqi oil official confirmed the 48-inch
pipeline had been repaired and loadings have resumed. Each terminal is
operating with a flow rate of 37-mil b/hour, the port agent said.
Excluding time for berthing and preparing to sail, typically taking
around two days, this means the daily loading rate at the Persian Gulf
terminal is around 1.76-mil b/d. An explosion Jul 3 caused a brief
disruption to loadings and cut loading capacity in half. The daily
loading rate last week from Basra was around 1-mil b/d, according to
port sources. <http://www.platts.com/Oil/News/3972026.xml?S=n>

# Natural Gas

**FERC OKs El Paso Unit\'s Expanded Natgas Pipeline**\
The Federal Energy Regulatory Commission said it approved on Wednesday
ANR Pipeline Co.\'s plan to expand the shipping capacity of its natural
gas pipeline in Wisconsin. ANR is a subsidiary of El Paso Corp. which
owns North America\'s largest natural gas pipeline system. The so-called
EastLeg expansion project will add about 142 million cubic feet of daily
gas transportation capacity along ANR\'s 30-inch diameter pipeline in
Wisconsin to provide fuel to new power plants. The gas would go to
Wisconsin Energy Corp. unit Wisconsin Electric Power Co.\'s 1,090
megawatt plant located in Port Washington and Calpine Corp.\'s 600
megawatt facility in Kaukauna. Both plants are set to come online in the
summer of 2005. The \$18.7 million project includes replacing or adding
about 8 miles of pipe and modifying an existing compressor station to
pull the additional gas. ANR plans to complete the project by autumn
2005. <http://biz.yahoo.com/rf/040707/energy_ferc_natgas_1.html>

**Other**

Nothing to report.

**Energy Prices**

+-------------------------------+-----------+-----------+------------+
|                               | **Latest  | **Week    | **Year     |
|                               | (7        | Ago**     | Ago**      |
|                               | /07/04)** |           |            |
+-------------------------------+-----------+-----------+------------+
| **CRUDE OIL**                 | 39.18     | 36.92     | 30.08      |
|                               |           |           |            |
| **West Texas Intermediate     |           |           |            |
| US**                          |           |           |            |
|                               |           |           |            |
| \$/Barrel                     |           |           |            |
+-------------------------------+-----------+-----------+------------+
| **NATURAL GAS**               | 6.27      | 6.03      | 5.20       |
|                               |           |           |            |
| **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