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

**Office of Energy Assurance**

**ENERGY ASSURANCE DAILY**

**February 25, 2004**

**Highlights / Major Developments**

**Limited Traffic Okayed for Southwest Pass on Mississippi River**\
The Coast Guard has just authorized limited traffic for the Southwest
Pass of the Mississippi River following the removal of the Lee III from
the channel just a couple of hours ago. One-way traffic may now resume
immediately but all vessel movement through the Southwest Pass must be
coordinated through the U.S. Coast Guard\'s Vessel Traffic Center in New
Orleans. \"The Coast Guard is continuing to work with the various pilot
associations to ensure that the vessels waiting to enter and depart the
Mississippi River\
via the Southwest Pass do so in as safe a manner as possible,\" said a
statement. Weather remains an issue in the area as heavy fog continues
to hamper visibility. Port officials estimate that it will take two to
three days once the channel is completely reopened to clear the backlog
of ships for each day that the channel was closed. The backlog was over
100 ships by Tuesday afternoon. OPIS Price Watch Alert 14:48 February
25, 2004
<http://biz.yahoo.com/rm/040225/transport_mississippi_closure_2.html>
<http://biz.yahoo.com/rm/040225/mississippi_river_closure_1.html>

**Exxon Mobil Says its La. Plants OK Despite Shut River**\
Exxon Mobil Corp. said Wednesday afternoon its two Louisiana oil
refineries were not yet affected by the closure of the lower Mississippi
River after a weekend ship collision. The river had not yet opened when
the statement was made.
<http://biz.yahoo.com/rc/040225/exxon_mississippi_1.html>

**MAP Louisiana Refinery Cuts Runs on River Closure**\
Marathon Ashland Petroleum reduced production at a
115,000-barrel-per-day (bpd) gasoline unit after a ship collision forced
the closure of the Mississippi River, said a source with knowledge of
the operations. \"The fluid catalytic cracker (FCC) is operating at
about half because of a lack of feedstock,\" the source told Reuters.
The gas unit is in Marathon\'s 232,000-bpd refinery in Garyville,
Louisiana.
<http://biz.yahoo.com/rm/040225/energy_marathon_refinery_1.html>
<http://biz.yahoo.com/rc/040225/energy_mississippi_1.html>

**Electricity**

**Big Pacific Storm Cuts Power to Thousands in Calif.**\
A powerful Pacific wind and rain storm pounded Northern California on
Wednesday, cutting off electricity to about 115,000 customers of Pacific
Gas & Electric Co., the utility said. There was no early word on when
crews could get power restored. The storm also disrupted local air
traffic, with San Francisco International Airport reporting some
arriving flights were delayed an average of 90 minutes. The largest
number of power outages was concentrated in the San Francisco Bay Area,
with 63,000 customers in the dark in the East Bay, including Oakland.
<http://biz.yahoo.com/rc/040225/utilities_pg_e_storm_1.html>

Calif. Diablo Canyon Nukes Cutting Power Wed to 24 Percent due to Ocean
Swells

PG&E Corp. said on Wednesday that output from both units at its Diablo
Canyon nuclear plant in central California would be cut to 24 percent of
capacity later in the day. The company said in a recorded update that
the move was triggered by concern about high oceans swells associated
with a storm currently battering the California coast. Output is often
derated at the Californian nuclear plant during storms as high ocean
swells can dislodge large amounts of kelp and clog the plant\'s cooling
system. The unit will begin ramping down around 4 p.m. Pacific and
output will be cut gradually over three to four hours. PG&E said the
units will remain at 24 percent power at least until Friday morning when
a decision will be made about whether it is appropriate to ramp back up.
The plant can produce a total of about 2,200 megawatts of electricity,
enough for around two million homes.

Reuters 14:35 February 25, 2004

**Santee Begins Construction of Two Coal-Fired Units**

Santee Cooper, a major customer of East Kentucky coal, has begun
construction on two coal-fired units at its Cross plant in South
Carolina, a total of 1,160 MW of new capacity coming on line in 2007 and
2009. The company officially began construction on both units \[Cross 3
and 4\] yesterday, a spokesman said Tuesday. All permits are secured for
both units, the spokesman said. Expanded infrastructure, such as
transmission lines, a bigger switchyard and additional coal cars, will
be included in the expansion of the CSX-served plant. On Monday,
Santee's board approved the construction of the 580-MW Cross 4. The
\$720 million unit is scheduled to begin commercial operation in January
2009, the spokesman said.
[http://www.platts.com/Coal/News/Santee%20begins%20construction%20on%20two%20Cross%20units%20%201,160%20MW%20total.xml?S=n](http://www.platts.com/Coal/News/Santee begins construction on two Cross units  1,160 MW total.xml?S=n)
For a more detailed look see the story in The Post and Courier,
Charleston, S.C., February 24, 2004

**Petroleum**

#### Motiva Slows Operations at Delaware City Refinery After Leak 

Motiva Enterprises LLC said it slowed operations at its Delaware City,
Delaware, crude-oil refinery

following a gas leak yesterday. The company made a \`\`slight
reduction\'\' in the refinery\'s operating rates after propane and
propylene leaked from a line at arround 2 p.m. local time yesterday,
Motiva spokesman Spiros Mantzavinos said. The leak was stopped around
4:30 p.m. and was confined to the refinery site, Mantzavinos said.
Processing is expected to return to normal in the \`\`next few days,\'\'
he said. Propane and

propylene are byproducts of oil refining.

Bloomberg News, 10:33 February 25, 2004

Also see information in Highlights /Major Developments above.

**Natural Gas**

**Market Insight: Spring LNG Outlooker**

Toward the end of the winter period in which the US traditionally
receives scant LNG supply, the Lake Charles, Louisiana, terminal is,
indeed, experiencing a supply crunch. However, no similar problem is
afflicting the other three US receiving terminals. European buyers
appear to be amply supplied, as well \-- despite closure and partial
destruction of Algeria\'s Skikda export facility. The greatest apparent
tightness in LNG markets is in Asia. World Gas Intelligence, February
25, 2004

**Fall River, Mass., Leader Seeks Fervent Opposition to Liquid
Natural-Gas Port** City Councilor Joseph Camara has thrown more fuel on
the fiery opposition to a liquefied natural gas import terminal proposed
for the city\'s North End. Camara submitted a resolution for tonight\'s
regular council meeting, asking for the nine-member council to go on
record in opposition to the facility. Opposition so far has centered on
the possible public safety threat the \$250-million facility could pose,
as a potential terrorist target. Critics including the mayor and Camara
have said the development would disrupt economic development plans for
the waterfront and will intensify traffic concerns. By Jessica
Resnick-Ault, Providence Journal, R.I., February 24, 2004

**Other News**

#### U.S. DOE Official says NERC Measures May Need Improvement

Recent reliability enhancements adopted by the North American Electric
Reliability Council may need to be strengthened further to ensure the
country avoids major blackouts, said James Glotfelty, director of the
office of electric transmission and distribution at the Dept of Energy.
Glotfelty told the Senate Energy and Natural Resources Committee Tuesday
that NERC filed its enhancements, which were adopted by NERC earlier
this month, with the US-Canada task force investigating the August 14
blackout, and that the task

force may conclude they need to be \"expanded or strengthened.\" If so,
the task force will suggest appropriate changes to NERC, he said.
Glotfelty said a final report of the task force, including steps to
avoid blackouts, will be issued in March. Glotfelty said the industry is
currently operating the grid in a conservative fashion with a heightened
awareness of reliability because \"nobody want to be the cause of the
next blackout.\" NERC President and CEO Michehl Gent also noted that the
industry\'s heightened

focus on grid reliability will slip if Congress does not pass a bill
that includes provisions for establishing mandatory reliability rules.
Gent acknowledged that there are competing legislative measures that
would do that \-- a comprehensive energy bill and a stand-alone bill
dealing solely with reliability \-- and he declined to say which one
Congress should focus on.
[http://www.platts.com/Electric%20Power/News/US%20DOE%20official%20says%20NERC%20measures%20may%20need%20improvement.xml?S=n](http://www.platts.com/Electric Power/News/US DOE official says NERC measures may need improvement.xml?S=n)

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#### U.S. FERC Warns May Issue, Gas Quality, Interchangeability Standards 

If industry representatives fail to propose adequate solutions to gas
quality and interchangeability issues sometime soon, it\'s very likely
the US Federal Energy Regulatory Commission will step in and issue
generic standards, Commissioner Suedeen Kelly told the Natural Gas
Roundtable on Tuesday. Noting

that the Natural Gas Council plans to meet next week with several
organizations, such as the Edison Electric Institute and Gas Appliance
Manufacturers Association, Kelly said the commission recognizes that
industry representatives have a plan to deal with gas interchangeability
and quality. \"Industry is responding\" and \"we understand it\'s a
complex issue,\" she related. Still, there\'s a need for certainty,
Kelly said, pointing out that investment decisions need to be made
regarding liquefied natural gas. While FERC hopes the industry\'s
collaborative efforts will result in solutions, Kelly made clear that
the commission is ready to \"advance the ball on this issue.\" She
maintained that while FERC \"needs to take the time to act

intelligently on this issue,\" the commission does not want to \"take
any more time than we must.\"
[http://www.platts.com/Natural%20Gas/News/US%20FERC%20warns%20may%20issue%20gas%20quality,%20interchangeability%20standards.xml?S=n](http://www.platts.com/Natural Gas/News/US FERC warns may issue gas quality, interchangeability standards.xml?S=n)

**Unocal\'s Attaka Field Shut by Fire-Indonesia**

Production has been halted at Unocal Corp\'s offshore Attaka oil and gas
field in East Kalimantan following a fire, Indonesia\'s oil and gas
watchdog said on Tuesday. Officials could not say when production would
restart but insisted the stoppages at Indonesia\'s biggest oil and gas
field would not affect natural gas exports. Natural gas supply from
Attaka to liquefied natural gas plants at Bontang in East Kalimantan
were disrupted, Kartoatmodjo added. An industry source told Reuters the
disruption would not hit Indonesia\'s exports of liquefied natural gas
because both Unocal and French energy giant Total stored natural gas in
East Kalimantan for emergency needs. Reuters, February 24, 2004

**Nigeria Says it will Comply with OPEC Cuts**\
Nigeria said on Wednesday it was taking steps to comply with recent OPEC
supply cuts, but shipping sources said they saw no sign of any changes
to February or March export schedules.
<http://biz.yahoo.com/rm/040225/energy_nigeria_opec_1.html>

#### Algeria says Already Implementing OPEC Output Cuts

Algerian Energy Minister Chakib Khelil said on Wednesday that his
country was already implementing oil production cuts agreed earlier by
the OPEC cartel. OPEC this month agreed to cut production quotas by 1.0
million barrels per day (bpd) from April 1 and to rein in 1.5 million
bpd of production over existing quotas. \"Yes, we already did,\" he said
when asked if Algeria would cut production. When asked how much Algeria
planned to cut production he said, \"10 percent. Everybody needs to cut
that.\"

Reuters 10:32 February 25, 2004

Nothing to report.

**Energy Prices**

+-------------------------------+-----------+-----------+------------+
|                               | **Latest  | **Week    | **Year     |
|                               | (2        | Ago**     | Ago**      |
|                               | /25/04)** |           |            |
+-------------------------------+-----------+-----------+------------+
| **CRUDE OIL**                 | 37.28     | 35.42     | 36.06      |
|                               |           |           |            |
| **West Texas Intermediate     |           |           |            |
| US**                          |           |           |            |
|                               |           |           |            |
| \$/Barrel                     |           |           |            |
+-------------------------------+-----------+-----------+------------+
| **NATURAL GAS**               | 5.10      | 5.33      | 18.48      |
|                               |           |           |            |
| **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