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

**Office of Energy Assurance**

**ENERGY ASSURANCE DAILY**

###### July 15, 2004

**Electricity**

#### Palo Verde 2 Nuclear-Power Plant Remains Shut, Company Says

The Palo Verde 2 nuclear-power plant is undergoing unplanned
maintenance, according to plant owner Arizona Public Service Co. The
company said Heavy storms and winds forced the plant to shut down early
Wednesday morning. The 1,270 Megawatt plant should be back at full power
by the week-end.

Bloomberg, July 15, 2004, 1248

# Three Mile Island Nuclear-Power Plant at 90%, Company Says

The Middletown, PA Three Mile Island nuclear-power plant is operating at
reduced production, according to AmerGen Power Co. Power was reduced at
the 815 Megawatt plant to perform maintenance on a feed water heater
control valve.

Bloomberg, July 15, 2004, 1235

#### PSEG\'s N.J. Salem 2 Nuke Starts to Exit Outage

Public Service Enterprise Group Inc. said Thursday it fixed the 1,150
megawatt Salem 2 nuclear unit in New Jersey and restarted the reactor.
The unit was forced off line on June 13 due to low steam generator water
level. Many electricity traders said they did not expect the unit to
return to service until the weekend. In addition, PSEG spokesman Chic
Cannon, said the company repaired a packing leak on the service water
pump at its 1,100 MW Hope Creek reactor, and was increasing power at
that unit. Hope Creek was reduced to as low as 66 percent early Thursday
morning for the repairs. At between 4 a.m. and 8 a.m. EDT on Wednesday,
the unit was operating at 72 percent of capacity, according to the U.S.
Nuclear Regulatory Commission daily plant status report.

<http://biz.yahoo.com/rc/040715/utilities_pseg_salem_1.html>

#### Utility Tree Clearing to Improve Grid Reliability, FERC Says

U.S. utilities should be subject to enforceable standards on tree
trimming and overall grid reliability to avoid a recurrence of the Aug.
14 blackout, the largest ever in North America, federal regulators said.
In a draft report to Congress, the Federal Energy Regulatory Commission
found that tree trimming near high-voltage power lines "should produce
better grid reliability during the summer." Still, the report recommends
that Congress pass mandatory reliability standards that are enforceable
under federal oversight. A government report in November found that
Akron, Ohio-based FirstEnergy violated four voluntary industry
reliability rules before the blackout, including rules on keeping trees
away from power lines.

Bloomberg, July 15, 2004, 1442

**Petroleum**

# Oil Slips As OPEC Confirms Increasing Output, Cancels Meeting

U.S. oil prices eased on Thursday, after rising to a six-week high above
\$41 a barrel overnight and OPEC confirmed it would push through a
planned increase in output quotas without holding a planned ministerial
meeting next week. New York light crude futures were down 32 cents at
\$40.65, after surging more than a \$1.50 a barrel on Wednesday, after
weekly data showed an unexpected fall in U.S. crude and gasoline
inventories. The figures heightened concerns over possible supply
disruptions at a time when production capacity is being stretched by
rapidly growing demand \-- reckoned to be expanding at its fastest rate
in 24 years by the International Energy Agency. OPEC confirmed the
cartel would enforce a planned 500,000 bpd increase in formal quotas
starting Aug. 1. The group had been due to meet on July 21 in Vienna. It
has already raised output limits by 2 million bpd to 25.5 million bpd to
cool prices, which last month hit a 21-year high. There was no need for
this meeting because all of us have already decided to have 500,000
barrels per day from August 1," Kuwait\'s oil minister, Sheik Ahmad
al-Fahd al-Sabah, told Reuters in South Korea.

Reuters, July 15, 2004, 1409

**EIA Says Plenty of Time to Build US Heating Oil Stocks**

There is plenty of time to boost U.S. heating oil inventories before the
winter heating season arrives, so traders should not panic and bid up
fuel prices, the head of the Energy Information Administration said on
Thursday. The price for heating oil at the New York Mercantile Exchange
recently traded at high levels not normally seen for this time of year,
reflecting supply concerns. "I think it\'s much too early" to worry
about heating fuel supplies, EIA administrator Guy Caruso told
reporters. "As usual the market is always trying to anticipate, but
we\'ve got a lot of time left to rebuild the heating oil stocks," said
Caruso, speaking during a break at a congressional hearing on the U.S.
refining industry. Caruso admitted that the United States came out of
the spring with relatively low heating oil stocks. "We\'re watching it
closely," he said. But he said if U.S. crude oil imports continue to
average 10 million barrels per day and there are no major refinery
outages, heating oil stocks should be in the "normal zone" by November.
Caruso also said higher heating oil prices should encourage refineries
to switch some of their summer operations from gasoline production to
making heating oil, which will boost inventories.

Reuters, July 15, 2004, 1341

**Colonial Resumes Pipeline Operations s in Pennsylvania After Glitch**

Colonial Pipeline Co. said on Thursday it resumed normal operations on
its fuel lines in Pennsylvania after foul weather forced it to restrict
deliveries to terminals near Philadelphia and in Woodbury Junction. "As
far as I know there has been no significant impact on deliveries," said
a spokeswoman. Colonial reduced flows from area refineries into Woodbury
Junction and flows to Philadelphia-area terminals on Wednesday after
flooding and lightning storms triggered power outages and mechanical
trouble. The incident also impacted some local deliveries onto the
Colonial\'s main line into Linden, New Jersey \-- the line\'s northern
end-point \-- though long haul shipments were not hindered, Colonial
said in a bulletin obtained by Reuters. Colonial is the largest refined
products pipeline operator in the United States, running more than 2.3
million barrels per day of fuel between Texas and New York, and is owned
by a consortium of oil companies. It was not clear how long pipeline
operations in Pennsylvania would be affected by the recent foul weather.

Reuters, July 15, 2004, 1334

#### DOE Seeks 17 Million Barrels of Oil for U.S. Reserve 

The U.S. government is seeking offers for as much as 94,400 barrels of
oil a day to be added to the Strategic Petroleum Reserve from Oct. 1
through March 31, 2005. The Energy Department announced the solicitation
for a total of 17 million barrels of oil in a posting on its Web site.
President George W. Bush wants to fill the reserve to its 700 million
barrel capacity next year. The reserve now holds a record 663 million
barrels. The government is filling the reserve under its
"royalty-in-kind" program in which producers with federal exploration
leases in the Gulf of Mexico are able to pay lease royalties with crude
oil. Offers for the current tender are due on Aug 3. House and Senate
Democrats want Bush to suspend deliveries into the reserve in a bid to
lower crude-oil prices. U.S. Energy Secretary Spencer Abraham has said
the reserve should be used only in the event of supply disruptions and
not to manage prices. In March, the Senate voted to cancel the delivery
of 53 million barrels to the reserve in a non-binding budget blueprint
for 2005. "The President believes that the SPR should be used only for
protection against oil supply disruptions, and not to manipulate price,"
the Energy Department said in response to the Senate vote. "Filling the
SPR up to capacity will strengthen the long-term energy security of the
United States."

Bloomberg, July 15,004 1452

# Natural Gas

**Lease Sale 192 in Western Gulf Could Lead to 1.44 Tcf of Gas
Production**\
The Minerals Management Service (MMS) said Thursday in a *Federal
Register* notice that Lease Sale 192 in the Western Planning Area of the
Gulf of Mexico could result in production of 136 to 262 million barrels
of oil and 0.81 to 1.44 Tcf of natural gas. The lease sale is scheduled
for Aug. 18 at the Hilton New Orleans Riverside Hotel in Louisiana. (
[more](http://intelligencepress.com/subscribers/daily/news/story.emb?REF=29071)
)

[NGI\'s Daily Gas Price
Index](http://intelligencepress.com/subscribers/daily/), July 15, 2004

**Other**

Nothing to report

**Energy Prices**

+-------------------------------+-----------+-----------+------------+
|                               | **Latest  | **Week    | **Year     |
|                               | (7        | Ago**     | Ago**      |
|                               | /15/04)** |           |            |
+-------------------------------+-----------+-----------+------------+
| **CRUDE OIL**                 | 40.70     | 39.44     | 31.60      |
|                               |           |           |            |
| **West Texas Intermediate     |           |           |            |
| US**                          |           |           |            |
|                               |           |           |            |
| \$/Barrel                     |           |           |            |
+-------------------------------+-----------+-----------+------------+
| **NATURAL GAS**               | 5.92      | 6.19      | 5.17       |
|                               |           |           |            |
| **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