![](media/image1.jpeg){width="8.75in" height="3.6055555555555556in"}U.S.
DEPARTMENT OF ENERGY

**Office of Energy Assurance**

**ENERGY ASSURANCE DAILY**

###### April 28, 2004

**Electricity**

**Exelon\'s Ill. Dresden 2 nuke exits outage, up to 17 pct**\
Exelon Corp.\'s 800 megawatt Dresden 2 nuclear unit in Illinois exited a
work outage and ramped up to 17 percent of capacity by early Wednesday,
the Nuclear Regulatory Commission said in its power reactor status
report. The unit had been shut since about April 24 (See Energy
Assurance Daily April 26, 2004).
<http://biz.yahoo.com/rc/040428/utilities_exelon_dresden_1.html>

**PPL declares Unusual Event at Pa. Susquehanna Nuke**\
PPL Corp. said Wednesday it declared an \"unusual event\" at its 1,150
megawatt Susquehanna 2 nuclear unit in Pennsylvania because of an
electrical failure in a power distribution panel in the reactor
building. The affected distribution panel supplies power to the cooling
system for the main generator. Power also was disrupted to the system
that removes certain gases from the turbine\'s main condenser, without
which the unit cannot operate at full power, Herbert Woodeshick, special
assistant to the president for PPL Susquehanna, said in a statement.
\"The plant is stable, and we\'ve reduced power on Unit 2 to about 80
percent,\" he said, adding there was no radioactive release as a result
of the incident and repairs were underway on the affected equipment. An
unusual event is the lowest of the four emergency classifications
established by the U.S. Nuclear Regulatory Commission for nuclear power
plants. It means a minor problem is in progress or has occurred that
could reduce plant safety.
<http://biz.yahoo.com/rc/040428/utilities_ppl_event_1.html>

**Ohio Power Siting Board Approves Construction of New Electric
Transmission Line** The Ohio Power Siting Board (OPSB) today approved
the construction of a 138-kilovolt (kV) electric transmission line in
Franklin County. American Electric Power (AEP) will own and operate the
3.24 mile transmission line. The line will connect AEP's Davidson and
Dublin substations. The new transmission line will enhance AEP's
existing transmission network in the Dublin area. Construction of the
project is expected to begin in June 2004. The projected cost is
approximately \$15 million. Additional information regarding this
project is available on the OPSB Web site at
[www.OPSB.ohio.gov](http://www.OPSB.ohio.gov/)
<http://www.energycentral.com/centers/news/daily/article.cfm?aid=4813870>

####### Petroleum

**Iraq Halts Kirkuk Crude Flow to Ceyhan, Turkey**

Iraq has halted pumping of Kirkuk crude along the pipeline to the
Turkish Mediterranean port of Ceyhan, shipping agents said on Wednesday.
\"The pumping stopped very late on Monday night and has not resumed
since,\" an agent based in the region told Reuters. \"No reason was
given.\" State oil marketer SOMO had resumed the pumping on Sunday with
a flow rate of 450,000 barrels per day (bpd). Shippers said just under
one million barrels of Kirkuk lay in storage tanks in Ceyhan. Oil
companies have this week completed lifting the 7.6 million barrels that
SOMO sold in tender in April.

Reuters 0902 April 28, 2004

**Update -- Valero Confirms it Shut 25, 000 bpd Gasoline Unit at
Ardmore, OK**

Valero Energy Corp. on Tuesday said it shut a 25,00O-bpd gasoline-making
unit at Ardmore, Oklahoma. \"We have discovered a leak in a steam
generator in Ardmore,\" said Mary Rose Brown of Valero. \"We brought
down the FCC unit earlier (Tuesday) to effect repairs. We should have an
estimated repair timeline (Wednesday).\" Midwestern Group Three traders
spoke of the FCC outage earlier Tuesday as a reason for the 1-cent spike
in gasoline differentials in that marketing hub. The plant has a total
crude distillation capacity of about 85,000 bpd. Reuters 1631 April 28,
2004

**Oil Pushes Past Previous Iraq War Peaks**\
International crude prices hit their highest level for 3-1/2 years on
Wednesday, exceeding peaks hit during last year\'s Iraq war, after the
U.S. government reported a fall in stocks of green gasoline and violence
mounted in the Middle East. London\'s Brent crude (LCOc1) jumped 50
cents to \$34.78 a barrel, its highest since October 13, 2000, when it
reached \$35.07. U.S. light crude in New York (CLc1) rose 45 cents to
\$37.98 a barrel, within 20 cents of a 13-year closing high hit last
month. Low U.S. fuel inventories have combined with rising Chinese
demand, heavy buying from speculative hedge funds and Middle East
tensions to drive up international oil prices. Wednesday\'s rise
followed a report from the U.S. Energy Information Administration
showing a fall of 1.4 million barrels, or 5.5 percent, last week in
stocks of reformulated gasoline (RFG), sold at a third of U.S. pumps
mostly in smog-prone urban areas. Tight U.S. gasoline stocks have fueled
fears of a supply crunch when summer vacation demand kicks in.
Refineries are also struggling to make enough of a new environmental
grade of gasoline being introduced in some U.S. states.
<http://biz.yahoo.com/rb/040428/markets_oil_3.html>

**U.S. Oil Companies Planning to Return to Libya**

Marathon Oil is eager to reenter Libya after US-imposed sanctions shut
US companies out of the country two decades ago. Marathon President and
Chief Executive Clarence Cazalot said Tuesday the company plans on
working with its partners in Libya --- ConocoPhillips and Amerada Hess
--- to negotiate the terms of re-entry. Marathon, ConocoPhillips and
Amerada Hess make up what's known as the Oasis group. "Our teams have
been fully engaged in negotiating re-entry with respect to Oasis only
since late February when we were granted

those authorities by the US government," Cazalot said during a
conference call. Last week's lifting of Libya sanctions by President
Bush allows the companies of the Oasis group and Occidental Petroleum,
another US company with assets in Libya, to start developing their
frozen assets, which have been operated by state-run National Oil Corp.
since 1986. Oxy Chairman and Chief Executive Ray Irani is equally eager
to get back to Libya.

Oxy's frozen Libyan assets are currently producing at a gross rate of
85,000 barrels per day, a rate that has been declining rapidly due to a
lack of investment and the application of modern technology. Output at
the Oasis

group's Waha field complex is also in decline, with output falling to
250,000 b/d today from close to 1 million b/d some 20 years ago.

Oil Daily, April 28, 2004

**Qatar Says Momentum Is for Higher OPEC Price Target**

The Organization of Petroleum Exporting Countries, which pumps about 40
percent of the world\'s oil, is increasingly interested in boosting its
price target to reflect a weakening U.S. dollar, Qatar\'s oil minister
said.

\`\`The momentum is growing,\'\' Qatar\'s Abdullah bin Hamad al-Attiyah
said in an interview in Paris, where he is attending an industry
conference tomorrow. \`\`There are a lot of concerns about the weak
dollar. There are a lot of concerns about the value of the oil.\'\' OPEC
officially targets oil prices of \$22 to \$28 a barrel. Members
including Venezuela, Libya and Nigeria have said higher prices are
warranted. It\'s benchmark price was last at \$33.32 a

barrel, and has exceeded the \$28 ceiling since early December.

Bloomberg News, 0717 April 28, 2004

**Iraq Ability to Sustain Oil Output Questioned**\
Iraq is struggling to sustain oil output as funding shortages and
security problems delay repair and field development projects, according
to contractors familiar with the sector. While the oil ministry forecast
that crude exports will rise 20 percent to 2.3 million barrels per day
(bpd) by the end of 2004, private engineers say day-to-day production
problems are mounting. \"This is an industry that has not been serviced
since 1990. Critical problems keep showing, ranging from lack of power
to pump water into wells to spare parts shortages,\" said one. \"Not a
single ministry project has been implemented so far,\" he added. Oil
officials privately say the post-war oil ministry lacks funds for
crucial projects, such as pumps to raise exports from southern fields
and generators to pump water into oil wells. An export pipeline to Iran
was forecast to become operational before the end of the year. But Oil
Minister Mohammad Bahr al-Uloum said earlier this week the project,
which Iran had been expected to build, was still being studied. The
ministry\'s finances have recently improved, officials say, adding that
Uloum abandoned a project to borrow \$1 billion from international banks
as the finance ministry, which controls discretionary funding, began
releasing money. Uloum ordered his staff to issue tenders only for
projects whose funding was fully available, such as a \$100 million,
70-kilometre crude oil pipeline and 14 storage tanks in Kirkuk with a
140,000-barrel capacity. An international oil services company executive
said previous tenders, such as gas separation stations and new wells,
failed to attract significant bidders because they were concerned over
whether they would be ultimately paid. \"We did not want to commission
studies and reveal our price for nothing. Funding looks secure for the
new projects, but international companies will think twice before
bidding in this security situation,\" the executive said. Anti-U.S.
insurgents have stepped up operations in the last few weeks to include
kidnapping and more attacks on foreign civilian convoys. The violence
has spread to areas once seen as secure, such as the Shi\'ite Muslim
south, which accounts for most of Iraq\'s 2.5 million bpd output. Oil
ministry tenders are separate from U.S.-funded projects awarded to U.S.
companies such as Halliburton. Officials say rising attacks against
foreign contractors has hampered work on these projects, especially in
northern Iraq. <http://biz.yahoo.com/rm/040428/energy_iraq_2.html>

#### Natural Gas 

**Damage to Transco's Southeast Louisiana Lateral**

Transco said Tuesday it has completed evaluation of damage on its
24-inch Southeast Louisiana Lateral between Ship Shoal 332 and South
Timbalier 300 and determined that flow can resume from five shut-in
blocks, although at a lower operating pressure than normal, until
permanent repairs are undertaken. The reduced operating pressure is not
expected to prevent a resumption of normal flows, Transco said. It
accepted nominations for Wednesday\'s gas day from the affected
production locations (Ship Shoal 332 and 354, South Timbalier 316 and
317 and Green Canyon 205). Permanent repairs will be undertaken in about
four to eight weeks; this work will result in the same platforms being
shut in again for about a week.

For more information:
<http://www.1line.williams.com/webbi/ebb/index.jsp>

NGI Daily Gas Price Index, April 28, 2004

**Mechanical Failure at Clay Basin Storage Facility in Utah**

Questar reported experiencing a mechanical failure of unit #5 at its
Clay Basin storage facility Sunday evening, and as a result, injection
capacity was reduced by 20,000 Dth/d to 350,000 Dth/d for Tuesday\'s gas
day. The restriction will continue until repairs are completed.

NGI Daily Gas Price Index, April 28, 2004

####### Other

**U.S. Conditionally OKs ComEd Plan to Join PJM Grid**\
The Federal Energy Regulatory Commission (FERC) late on Tuesday gave
Exelon Corp.unit Commonwealth Edison Co. conditional approval to
transfer control of its giant transmission network to the Mid-Atlantic
grid operator effective May 1. The decision allows Chicago-based ComEd
to integrate its northern Illinois transmission system into the PJM
Interconnection, which now serves 25 million people in seven states and
the District of Columbia. The link-up puts PJM in control of power flows
across ComEd\'s roughly 5,000-mile system. FERC has encouraged utilities
to join super-regional networks with independent operators based on the
idea that third parties are less likely to discriminate against
competitors. PJM has calculated the integration will save consumers \$70
million annually, according to ComEd. PJM runs a competitive wholesale
power market and operates an electric grid that spans all or parts of
Delaware, Maryland, New Jersey, Ohio, Pennsylvania, Virginia, West
Virginia and the District of Columbia. ComEd serves about 3.5 million
northern Illinois customers. A plan by utility American Electric Power
Co. Inc. to join PJM has been held up by jurisdictional squabbles
between FERC and the states of Virginia and Kentucky.
<http://biz.yahoo.com/rc/040428/utilities_comed_1.html>

**Energy Prices**

+-------------------------------+-----------+-----------+------------+
|                               | **Latest  | **Week    | **Year     |
|                               | (4        | Ago**     | Ago**      |
|                               | /28/04)** |           |            |
+-------------------------------+-----------+-----------+------------+
| **CRUDE OIL**                 | 37.17     | 36.61     | 25.25      |
|                               |           |           |            |
| **West Texas Intermediate     |           |           |            |
| US**                          |           |           |            |
|                               |           |           |            |
| \$/Barrel                     |           |           |            |
+-------------------------------+-----------+-----------+------------+
| **NATURAL GAS**               | 5.80      | 5.52      | 5.30       |
|                               |           |           |            |
| **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