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

**Office of Energy Assurance**

**ENERGY ASSURANCE DAILY**

**September 21, 2004**

**Highlights/Major Developments**

**Hurricane Update from The Office of Energy Assurance Situation
Report**

To read Office of Energy Assurance's (OEA) latest Hurricane Situation
Reports click the following link.

[*http://www.ea.doe.gov/hurricane_ivan.html*](http://www.ea.doe.gov/hurricane_ivan.html)

**Electricity**

**TVA\'s Tenn. Watts Bar Nuke Starts to Exit Outage**

The Tennessee Valley Authority\'s 1,170-megawatt Watts Bar nuclear power
unit in Tennessee started to exit an outage and ramped up to 13 percent
of capacity by early Tuesday, the Nuclear Regulatory Commission said in
its power reactor status report.

The unit shut on about Sept. 19 due to an indication of dropped control
rods.

Reuters, 0704 September 21, 2004

**Elk Hills Gas-fired Plant Shut**

Sempra's 416 MW Elk Hills gas-fired unit was shut down on Tuesday.

Reuters, 1407, September 21, 2004

**Big Brown Coal Plant Expected Back On-line Tuesday**

TXU's 575 MW Big Brown 1 unit completed repairs for a boiler tube leak.

Reuters, 1407, September 21, 2004

**Parish 7 Coal Plant Back Expected On-line Tuesday**

Texas Gen's 560 MW Parish 7 unit is expected back on-line Tuesday
following tube leak repairs.

Reuters, 1407, September 21, 2004

**El Segundo 4 Shut Down Tuesday**

NRG/Dynergy's 335 MW El Segundo 4 gas-fired plant was shut down Tuesday.

Reuters, 1407, September 21, 2004

**La Paloma 3 Shut Tuesday**

NEGT's 232 MW La Paloma 3 gas-fired plant was shut on Tuesday.

Reuters, 1407, September 21, 2004

## Hydro Plants on Susquehanna Operating at Below Capacity

Some of the hydro plants along the Susquehanna River were operating at
reduced capacity due to debris in the river after the remnants of Ivan
crossed the river\'s headwaters.

Reuters, 1326, September 21, 2004

# PSEG Power, PJM ISO to Discuss Future Availability of Seven Generating Units Being Considered for Retirement [**http://pro.energycentral.com/professional/news/power/news_article.cfm?id=5131079**](http://pro.energycentral.com/professional/news/power/news_article.cfm?id=5131079)

**Petroleum**

**U.S. Oil, Gas Output Is Still Down Because of Ivan, Govt Says**

Oil output in the Gulf of Mexico was 39 percent below normal and gas
production was down 23 percent as

energy companies continued to work to return production platforms to
service after Hurricane Ivan last week, the government said. Oil
production was lower than normal by 665,665 barrels a day at 12:30 p.m.
New York time, according to a report from the U.S. Minerals Management
Service. Daily output yesterday was down 699,214 million barrels.
Production averages 1.7 million barrels on a normal day, the service
said. Natural-gas production was cut by 2.8 billion cubic feet a day
from the normal 12.3 billion cubic feet, the Washington-based agency
said. Output yesterday was down 2.9 billion cubic feet. Today\'s report
was based on information from 18 companies. Ivan trimmed oil production
by a total of 8.5 million barrels since last Monday, the report said.
Gas production losses totaled 36.1 billion cubic feet.

Bloomberg News, 1343 September 21, 2004

## Ivan Shut 8.5 Million bbls Oil, 36.2 bcf Natgas 

Nearly 8.5 million barrels of oil in the Gulf of Mexico and 36.2 billion
cubic feet of natural gas have been shut so far by Hurricane Ivan and
its wake, the federal Minerals Management Service said on Tuesday.
Nearly 666,000 barrels of oil per day and nearly 2.8 billion cubic feet
per day of gas remain shut in the Gulf of Mexico, MMS said. The gulf,
home to a quarter of U.S. oil and gas production normally produces about
1.7 million bpd of oil and 12.3 billion cfd of natural gas. Gulf
producers began precautionary shutdowns on September 13 ahead of Ivan.
Later in the week, Ivan swept east major productions sites, but not
before damaging five offshore drilling units and five fixed platforms
according to MMS. Reuters, 1659 September 21, 2004

## Kuwait Hopes to Boost Oil Output by 200,000 Bpd

Kuwait\'s oil minister said on Tuesday the country plans to increase its
oil production by 150,000 to 200,000 barrels per day by the middle or
end of October to help stabilize oil prices.

Reuters, 1620 September 21, 2004

## BP US Gulf Crude Output Seen Back in 2-3 Weeks

BP said on Tuesday that most of its 350,000 barrels per day Gulf of
Mexico crude production was still shut in but that in two to three weeks
the company will be back to full production after disruptions because of
Hurricane Ivan. No deepwater production was back by Tuesday, and the
company has about 300,000 bpd of deepwater production, said BP
spokeswoman Ayana McIntosh-Lee. Reuters, 1524 September 21, 2004

**Exports Slow at Venezuela\'s Amuay Refinery**

Loadings of oil products from Venezuela\'s giant 940,000 barrel-per-day
Amuay-Cardon refining complex slowed recently due to output difficulties
at the plant, shipping sources said. The difficulties could be related a
reduction in the twin refineries\' output, harbor and shipping officials
said.

Reuters, 1426, September 21, 2004**Valero Resumes Operations at
Louisiana Refinery**

Valero Energy Corp., the third-largest U.S. oil refiner, said it is
resuming operations at its Krotz Springs, Louisiana, refinery after
Hurricane Ivan forced a shutdown last week. The plant can process 85,000
barrels of oil a day. Bloomberg News, 1349 September 21, 2004

Reuters, 1110, September 21, 2004

**Heating Oil Rises Close to Record Before Expected Supply Drop**

Heating oil in New York surged close to an all-time high before a weekly
petroleum report that\'s expected to show supplies declined last week
after Hurricane Ivan forced production cuts from the Gulf of Mexico.

Bloomberg News, 1445 September 21, 2004

**Hovensa Resumes Operations at Virgin Islands Refinery Unit**

Hovensa Resumed operations at the coker at its U.S. Virgin Islands
refinery on Friday after Tropical Storm Jeanne caused a power failure
that shut the unit the previous day.

Bloomberg News, 1248 September 21, 2004

[**Oil Sanctions on Sudan Would Have Minimal Market
Impact**](http://www.energyintel.com/DocumentDetail.asp?document_id=131253)\
The United Nations\' Security Council adopted a resolution Saturday that
threatens Sudan with oil sanctions, but analysts said on Monday that
there was no cause for concern as the impact on the oil global market
\-- and particularly the US \-- would be minimal.

Oil Daily, September 21, 2004

<http://www.energyintel.com/PublicationHomePage.asp?publication_id=5>

[**Canada Firms Role as Top US Oil
Supplier**](http://www.energyintel.com/DocumentDetail.asp?document_id=131216)\
Canada was the largest crude supplier to the US in July at 1.650 million
barrels per day, consolidating its position as the number one supplier
for the first seven months of 2004 and moving to dethrone Saudi Arabia
from the top spot for the year \-- a position the kingdom has held since
1998. Oil Daily, September 21, 2004
<http://www.energyintel.com/PublicationHomePage.asp?publication_id=5>

**Williams Provides Update on Gulf Operations**\
Natural Gas throughput has returned to substantially normal levels on
Williams\' wholly-owned Transco natural gas pipeline system. Another
pipeline, Gulfstream, in which Williams has a 50-percent interest, is
beginning to see supplies of offshore production reinstated. Gulfstream
expects the offshore volumes to improve over the next several days. The
pipeline has been meeting customer demand with supplies from storage and
other alternate onshore sources.
<http://biz.yahoo.com/prnews/040920/dam059_1.html>

**Oil Hits \$47 as Supply Worries Linger**\
Oil prices hit a one month-high of \$47 a barrel on Tuesday as China
showed no let-up in its strong import growth and traders worried that
U.S. petroleum inventories had drawn down heavily due to Hurricane Ivan.
<http://biz.yahoo.com/rb/040921/markets_oil_10.html>
<http://www.newsday.com/business/ny-bzoil220904,0,7621440.story?coll=ny-business-headlines>

**Murphy Oil Says Hurricane Ivan Damaged One of Its Rigs, Which Could
Cause 5-Week Delay** <http://biz.yahoo.com/ap/040920/murphy_1.html>

**Diamond Offshore Updates Fleet Status Following Hurricane Ivan**\
Diamond Offshore Drilling Inc. today reported preliminary results of
inspections on-board five Company rigs that were operating in the path
of Hurricane Ivan. Examination of the jack-up rig Ocean Warwick revealed
damage to the unit\'s legs and jacking system. Crews are currently
making initial repairs before moving the rig to a shipyard to complete
the inspection and perform any necessary work. Total downtime for the
Warwick cannot be determined until the inspections are complete. Four
additional units were also in the storm\'s path. The semisubmersible
rigs Ocean Star and Ocean America, which parted their mooring during the
height of the hurricane, have both been moved to a shallow-water
location where crews are working to replace anchor chain and wire lost
during the storm. All necessary materials are on hand and estimated
downtime for each rig is approximately 10 to 21 days, depending on
weather and other conditions. Efforts to recover the lost anchor chain
and wire are expected to commence as soon as weather and other
conditions permits. The jack-up rig Ocean Drake experienced essentially
no damage to the unit, but wave action from the storm destabilized the
drill site, and the Company is currently working with the operator to
develop a course of action. The jack-up Ocean Columbia was essentially
undamaged and is proceeding to its next drilling location. Diamond
Offshore is a leader in deep water drilling. The Company\'s fleet of 45
offshore drilling rigs consists of 30 semisubmersibles, 14 jack-ups and
one drillship. The fleet operates in the waters of six of the world\'s
seven continents. <http://biz.yahoo.com/bw/040920/206051_1.html>

**Chevron Finds Damaged Platforms in Wake of Hurricane**

ChevronTexaco said on Monday crews discovered structural damage at
\"numerous\" oil and gas production platforms on its Bay Marchand field
in the Gulf of Mexico following Hurricane Ivan. A spokesman for the
company added that an oil storage tank on the far Southeast tip of
Louisiana containing 3,148 barrels of crude oil was apparently crushed
during the storm with all of the oil dispersing. Reuters, 1706,
September 21, 2004

**Oil and Gas Producer Nabors Says One Offshore Rig Damaged by Hurricane
Ivan** Oil and gas producer Nabors Industries Ltd. said Monday that one
of its offshore platform rigs was extensively damaged by Hurricane Ivan.
<http://biz.yahoo.com/ap/040920/nabors_ivan_1.html>

**Devon to Meet Production Guidance, Despite Ivan**

Devon Energy Corp. said on Tuesday Hurricane Ivan is estimated to have
reduced its production by 650,000 to 750,000 barrels of oil equivalent
in the third quarter, but the company still expects to meet its previous
production forecast. Despite this reduction, the said it still expects
third quarter production to be between 61.5 million to 62.5 million
barrels of oil equivalent, in line with previous estimates. Devon is
based in Oklahoma City.

Reuters, 1701 September 21, 2004

**Natural Gas**

**FERC Draft Report Calls Risk of LNG Accident \"Negligible\"**

<http://pro.energycentral.com/professional/news/gas/news_article.cfm?id=5131562>

**PG&E California Calls Operational Flow Order for Tomorrow**

The operational flow order was called because of high inventory on the
system. Shippers who exceed their nominated volumes by more than 4
percent will face a \$1 per dekatherm penalty on the excess quantity.
Bloomberg News, 1145 September 21 2004

## US Agency Seeks Comment on Exxon Mobil LNG Terminal

U.S. energy regulators (FERC) on Tuesday asked for final public comments
on the environmental impact of a proposed liquefied natural gas (LNG)
terminal and associated pipeline to be built in Texas and owned by an
affiliate of Exxon Mobil Corp. The import terminal, would be able to
deliver up to an average 2 billion cubic feet of gas a day and have a
peak capacity of 2.7 billion cubic feet a day (Bcfd). Reuters, 1643
September 21, 2004

**US Spot Natgas Firms Again on Damaged Rig Concerns**

U.S. spot natural gas prices rose sharply again on Tuesday, driven by
concerns that some

U.S. Gulf of Mexico rigs damaged last week by Hurricane Ivan might
result in longer-term cuts in supply, traders said. \"It\'s knowing
there was damage (from the storm), but not knowing the extent that\'s
got people nervous. The U.S. Minerals Management Service said that as of
early Tuesday the storm had forced U.S. Gulf producers to shut in a
cumulative total of about 36 billion cubic feet of gas. MMS said there
was still about 2.8 bcf of gas shut in on Tuesday, down by about 100
million cubic feet from Monday. Shut in gas volumes represent more than
20 percent of the total produced in the Gulf.

Reuters, 1517, September 21, 2004

## El Paso Says 270 mmcf of Gas Cut on Tenn. Line from Ivan

El Paso Corp. on Tuesday said producers still had about 270 million
cubic feet of natural gas shut-in on its Tennessee Gas pipeline system
due to damage caused by Hurricane Ivan last week. Before the storm, a
company spokeswoman said producers shut in about 800 mmcfd on the 6.5
billion cubic feet per day Tennessee pipeline as a precaution against
the storm. \"Tennessee has isolated the leak on the 36 inch line and is
currently testing the line,\" the company said in a Web site notice this
morning.

Reuters, 1426, September 21, 2004

## NYMEX Natgas Jumps Midday on US Gulf Rig Concerns

NYMEX natural gas futures moved up sharply midday Tuesday, propelled by
a firmer cash market amid concerns some of the gas shut in by Hurricane
Ivan last week may not be restored soon, industry sources said.

Reuters, 1253, September 21, 2004

**Other News**

Nothing to report.

**Energy Prices**

+-------------------------------+-----------+-----------+------------+
|                               | **Latest  | **Week    | **Year     |
|                               | (9        | Ago**     | Ago**      |
|                               | /21/04)** |           |            |
+-------------------------------+-----------+-----------+------------+
| **CRUDE OIL**                 | 47.11     | 44.62     | 29.93      |
|                               |           |           |            |
| **West Texas Intermediate     |           |           |            |
| US**                          |           |           |            |
|                               |           |           |            |
| \$/Barrel                     |           |           |            |
+-------------------------------+-----------+-----------+------------+
| **NATURAL GAS**               | 5.43      | 5.15      | 4.33       |
|                               |           |           |            |
| **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