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

**Office of Energy Assurance**

**ENERGY ASSURANCE DAILY**

###### August 19, 2004

**Highlight / Major Developments**

***NYMEX Oil Up Near \$49 to New Peak on Iraq Violence and China/India
Demand***\
Oil prices struck a fresh record just under \$49a barrel on Thursday,
spurred higher by renewed violence in Iraq and fresh evidence that
strong demand growth in China and India has not been slowed by higher
energy costs. U.S. light crude on the New York Mercantile Exchange
jumped \$1.48 to \$48.75 a barrel, a record in the 21 years that oil
futures have traded on NYMEX, before the September crude contract
settled at \$48.70, up \$1.43 for the day. In Baghdad, a mortar bomb hit
the roof of the U.S. embassy, slightly wounding two American employees,
a U.S. spokesman said. Earlier, fierce fighting persisted in the Iraqi
town of Najaf as rebel Shiite cleric Moqtada al-Sadr defied an Iraqi
government threat of attack on his stronghold and rejected demands that
he end his uprising. The resumption of violence in southern Iraq forced
the country to keep its main southern pipeline shut for the 10th day on
Thursday. That has halved Iraq's exports to 1.0 million barrels per day.
Also in Iraq, a domestic oil pipeline near Iraq's northern Kirkuk fields
was hit by an explosion. This did not affect the northern pipeline to
Turkey.
[*http://biz.yahoo.com/rc/040819/markets_energy_nymex_6.html*](http://biz.yahoo.com/rc/040819/markets_energy_nymex_6.html)

**Hurricane Charley:** **Over 2,075,000 Lost Power in Florida and the
Carolinas** For detailed coverage of the location and number of outages
and the impacts on the energy infrastructure see the situation reports
and background materials at the Office of Energy Assurance web site:
<http://www.ea.doe.gov/hurricane_charley.html> See also the websites of
the major utilities in Florida affected by the hurricane: Florida Power
and Light's Website: [www.FPL.com](http://www.FPL.com/); Progress
Energy's Website: <http://www.progress-energy.com/storm>; Tampa
Electric's Website: <http://www.tampaelectric.com/>

**Status of Power Outages in Florida**

  -------------------- ------------- -------------- ------------- ----------------
                       **Total       **Restored**   **Still Out** **As of**
                       Outages**                                  

  **FPL**              **874,000**   **761,000**    **113,000**   **0600 19 Aug**

  **Progress Energy**  **502,000**   **390,225**    **111,775**   **1100 19 Aug**

  **Tampa Electric**   **78,000**    **78,000**     **0\***       **PM 18 Aug**

  **Municipalities**   **212,000**   **150,000**    **62,000**    **AM Aug 19**

  **Coops**            **200,000**   **164,000**    **36,000**    **AM Aug 19**
  -------------------- ------------- -------------- ------------- ----------------

**Sources: Office of Energy Assurance situation report, 1500 August 19
and FPL, Progress Energy, and Tampa Electric websites**

\*On August 18, Tampa Electric announced," its team has repaired all of
its damaged circuits and restored power to customers with known power
outages, with the exception of those customers with damage to their
homes and infrastructure that prohibits restoration." See also
<http://biz.yahoo.com/bw/040819/195216_1.html>

**ADVISORY/FPL Staging Site Operations Story Opportunity for Your
Reporters Covering Electric Restoration Efforts In Southwest Florida**\
Thursday August 19, 1:52 pm ET

WHAT: FPL has set up four staging sites in the Southwest Florida

area to serve as \"field headquarters\" for restoration

operations within a particular area. Everything necessary

to direct and support this massive restoration \-- including

the needs of the army of more than 10,000 workers from FPL

and 10 other utilities \-- is available at these locations

where it is needed the most. Operations at these and other

FPL staging sites and service centers have provided the

following in support of the systemwide restoration effort

to date:

Materials:

\-- Hundreds of power poles

\-- 2.3 million feet of wire

\-- 1,050 transformers

\-- 10,000 switches and arrestors

\-- 836,000 pole hardware parts

Support to field crews:

\-- 75,000 gallons of fuel for 7,000 vehicles per night

(also on-site vehicle repair and maintenance)

\-- Procure/lease 300 vehicles (from passenger vans to

specialized equipment such as 100-ton cranes)

\-- 25,000 meals per day

\-- 25,000 gallons of water per day

\-- 55,000 pounds of ice per day

WHERE: The staging sites are:

\-- Charlotte County Airport, 4398 E. Henry St., Punta Gorda

(Coordinators: Elise Campbell and Eric Anderson)

\-- Metro Mall, 2855 Colonial Blvd., Ft. Myers (Coordinator:

George Quintanilla)

\-- Arcadia Peace River Citrus, 4104 SR 72, Arcadia

(Coordinator: Ronnie Kyser)

\-- Port Charlotte Town Center, 1441 Tamiami Trail, Port

Charlotte

CONTACT: FPL\'s corporate communications dept. is available to assist

your reporters with visuals and interviews related to

staging site operations. Ask for the media coordinator at

these locations for assistance, or contact 305-552-3888 to

speak to a media relations specialist. We also have media

relations representatives in the Southwest Florida area

available to coordinate visits to locations where

significant rebuilding of the electric system is underway.

**Electricity**

**See Highlights / Major Developments above concerning Hurricane Charley
outages.**

**TXU's Texas Martin Lake Power Units Back; Monticello 1 Still Out**\
TXU Corp.'s 750 megawatt coal-fired Martin Lake units 2 and 3 returned
to service by late Wednesday, a company spokesman said Thursday. Both
units shut on Aug. 16 and had been expected to return by Wednesday or
Thursday. Meanwhile, the company's 565 megawatt Monticello 1 coal-fired
unit in Texas, which was shut Wednesday, remained shut Thursday to
repair a boiler tube leak.
<http://biz.yahoo.com/rc/040819/utilities_txu_martinlake_1.html>

**TXU\'s Texas Monticello 1 Power Unit Seen Back Soon**\
TXU Corp.\'s 565 megawatt Monticello 1 coal-fired unit in Texas will
likely exit a work outage on Aug. 19-20, Texas regulators said in a
report. The unit shut for boiler tube leak repairs on about Aug. 18.
<http://biz.yahoo.com/rf/040819/utilities_txu_monticello_1.html>

**DTE\'s Mich. Fermi 2 Nuke Up to 75 Pct Power**\
DTE Energy Co.\'s 1,130 megawatt Fermi 2 nuclear unit in Michigan ramped
up to 75 percent of capacity by early Thursday, the Nuclear Regulatory
Commission said in its power reactor status report. On Wednesday, the
unit was operating at 24 percent of capacity after exiting an outage
begun on about Aug. 9 to work on an emergency diesel generator.
<http://biz.yahoo.com/rc/040819/utilities_dte_fermi_1.html>

**Progress\' N.C. Brunswick 1 Nuke Exits Outage**\
Progress Energy Inc.\'s 872-megawatt Brunswick 1 nuclear unit in North
Carolina exited an outage and ramped up to 67 percent of capacity by
early Thursday, the Nuclear Regulatory Commission said in a power
reactor status report. On Wednesday, the unit was operating at 8 percent
of capacity after exiting an outage begun on Aug. 14 when the remnants
of Hurricane Charley blew across the plant site and knocked out the
plant\'s off-site power supply.
<http://biz.yahoo.com/rc/040819/utilities_progress_brunswick_1.html>

**Exelon\'s Pa. Peach Bottom 2 Nuke Up to 98 Pct Power**\
Exelon Corp.\'s 1,110-megawatt Peach Bottom 2 nuclear unit in
Pennsylvania ramped up to 98 percent of capacity by early Thursday, the
Nuclear Regulatory Commission said in its power reactor status report.
On Wednesday, the unit was operating at 73 percent of capacity.
<http://biz.yahoo.com/rc/040819/utilities_exelon_peachbottom_1.html>

**Palisades, MI Nuclear-Power Plant at Full Power, Company Says**
Consumers Energy's 789 MW Palisades 1 nuclear unit is back to full power
following maintenance on 2 control rod drive mechanism seals. Bloomberg
News, 1523 August 19, 2004

**San Antonio\'s JT Deely 1 Coal Unit Expected to Shut Thursday**

The plant will close to repair a tube leak. The unit will likely return
on about Aug. 22, Texas regulators said in a report.

Reuters, 1403 August 19, 2004

**Petroleum**

**See Highlights / Major Developments about record prices for crude
oil**

**Resid hydrotreater Shut at BP Texas City Refinery**\
A residual hydrotreater was shut at BP Plc\'s 470,000 barrel-per-day
(bpd) refinery in Texas City, Texas, after a blowout and fire on
Wednesday afternoon, according to a filing with the Texas Commission on
Environmental Quality, the state\'s environmental regulator. A Texas
City Fire Department spokesman said firefighters responded to a small
fire at the plant, but company firefighters were already battling the
blaze. \"It was a small fire,\" the spokesman said. \"They had it under
control in 30 minutes.\" No other units at the refinery were affected by
the fire, the spokesman said. The incident was reported at 1:30 p.m.
CDT. <http://biz.yahoo.com/rc/040818/energy_bp_texascity_2.html>

**First U.S. Refinery Since 1976 May Be Built as Fuel Prices Soar**
Glenn McGinnis hikes up a dusty ridge off Interstate 8 near Wellton,
Arizona, to show off a barren patch of scrubland that may become home to
a rarity: the first U.S. oil refinery to be built in almost three
decades. There will be more hills to climb. McGinnis, 55, chief
executive officer of Phoenix-based Arizona Clean Fuels LLC, must secure
two dozen government permits for the \$2.5 billion project, close a deal
for crude from Mexico and pull together investors that may include Saudi
Arabia\'s state-owned oil company. In the last 25 years, the number of
U.S. refineries has fallen by half, from 308 in 1979 to 146, according
to the U.S. Department of Energy. The last one built was Marathon Oil
Corp.\'s plant in Garyville, Louisiana, dedicated in 1976. The challenge
of getting all the needed permits and the reluctance of investors make
the chances for a new U.S. refinery \`\`very slim,\'\' says Colm
McDermott, a refining analyst at John S. Herold Inc., a Norwalk,
Connecticut-based consulting firm. Republican-backed legislation to
expedite permit approvals for new refineries passed the House 239 to 192
on June 16. It hasn\'t been introduced in the Senate. Democrats say the
measure would weaken clean-air and clean-water enforcement by giving the
Department of Energy authority to override state and federal
environmental laws. Arizona Clean Fuels, which is closely held and
declines to name its investors, already has spent \$30 million to plan
the new refinery and seek permits. Construction is set to start in 2006
and refining to begin in 2009. The refinery would have the capacity to
process 150,000 barrels a day, above the U.S. average of about 115,000
barrels. Last year, Arizona Clean Fuels abandoned a site near Phoenix
after residents objected and Governor Janet Napolitano, a Democrat,
expanded ozone-pollution restrictions to include the refinery site.
Bloomberg News, 0001 August 19, 2004

**Norwegian Oil-Drillers Will Lock Out Rig Workers** The owners of oil
rigs off the coast of Norway will lock out workers, threatening to halt
the drilling of exploration and production wells, to end a seven-week
strike. Four mobile rigs and fixed installations at five fields will
halt operations, the Norwegian Shipowners Association said in an e-mail
statement. Drilling wells to maintain and increase output. Oil and gas
provide more than half of Norway\'s exports. It pumps about 3 million
barrels of oil a day, most of which is sold abroad. The U.S., the
world\'s largest oil importer, bought 60 million barrels of its crude,
the U.S. Energy Department said. About 300 out of 850 members of the OFS
union will have to cease working because of the lockout, which starts at
midnight Sept. 2. About 200 members have previously gone on strike.
Bloomberg News, 1056 August 1, 2004

**Iraq Oil Exports Unchanged After Basra Attack**

Iraq\'s oil exports are still flowing at one million barrels per day
through southern terminals despite an attack on the South Oil Company
headquarters on Thursday, an oil official at the company said. Scores of
gunmen attacked the headquarters in the city of Basra and looted the
eight-story building before setting it on fire. Exports have been
running at one million bpd, or half of normal, since saboteurs attacked
one of two pipelines feeding the offshore terminals on Aug. 9.

Reuters, 1530 August 19, 2004

# Natural Gas

# 

# Texas Gas Facility Explodes, Dozens Evacuated

An explosion early Thursday at an underground gas storage facility
forced dozens of residents from their homes, authorities said. Duke
Energy Corp. said the fire early Thursday shut its 16 billion cubic feet
Moss Bluff salt cavern natural gas storage facility in Texas. Duke
Energy customers depending on natural gas to flow through five
interconnected pipelines in south Texas continue to be served after a
fire rocked one of the utility\'s storage facilities early Thursday, a
spokeswoman said. No one was reported injured in the explosion, but
roads were closed and houses within a one-mile radius were ordered
evacuated after natural gas exploded at the Duke Energy site at about 4
a.m. Witnesses said in broadcast reports that they saw a ball of fire
from a bridge over the Trinity River. One person inside the storage site
at the time of the blast was able to escape, said Capt. Bill Tidwell of
the Liberty County Sheriff\'s Department. \"Everybody\'s been accounted
for,\" he said. Crews decided to let the gas burn itself out, and two
other storage chambers at the facility are not thought to be threatened,
he said. Emergency crews remained on the scene well past daybreak. The
cause of the explosion was not determined. Moss Bluff is about 40 miles
northeast of Houston. The area is dotted with manmade caverns inside
salt domes, which are the world\'s largest storage site for explosive
hydrocarbons. One underground gas leak in 1980 forced 72 families from
their homes in nearby Mont Belvieu for almost five months.
<http://www.cnn.com/2004/US/Southwest/08/19/gas.explosion.ap/index.html>
<http://biz.yahoo.com/rc/040819/utilities_duke_mossbluff_1.html>
[http://www.marketwatch.com/news/yhoo/story.asp?source=blq/yhoo&siteid=yhoo&dist=yhoo&guid=%7B68D51382%2D9B66%2D4573%2DBB60%2DDAABA3C13012%7D](http://www.marketwatch.com/news/yhoo/story.asp?source=blq/yhoo&siteid=yhoo&dist=yhoo&guid={68D51382-9B66-4573-BB60-DAABA3C13012})

**Other**

**Cybersecurity for Power Grid Proceeds Slowly** It's been a year since
the major northeast blackout, and efforts to protect the power grid
against computer-based threats have proceeded slowly. The North American
Electric Reliability Council (NERC) has released a list of measures to
shore up electric grid reliability, and topping the cybersecurity
portion of the list, the council recently voted to renew for one year a
set of rules called the Urgent Action Cyber Security Standard 1200,
setting minimum cybersecurity requirements for utility companies in the
U.S. and Canada. The standard applies only to utility control centers,
and specifically exempts substations, power plants, and the remotely
operated control systems and relays sprinkled throughout the grid. The
reason the standards don\'t reach further is a pragmatic one: the
industry didn\'t want to impose requirements on itself that it couldn\'t
meet, Lou Leffler, NERC cybersecurity chief, told SecurityFocus. \"There
are some areas where the technology doesn\'t exist at this point in time
to provide all the protection that we\'d like,\" Leffler said.\
[http://searchsecurity.techtarget.com/originalContent/0,28914
2,sid14_gci1000896,00.html](http://searchsecurity.techtarget.com/originalContent/0,289142,sid14_gci1000896,00.html)

**Energy Prices**

+-------------------------------+-----------+-----------+------------+
|                               | **Latest  | **Week    | **Year     |
|                               | (8        | Ago**     | Ago**      |
|                               | /19/04)** |           |            |
+-------------------------------+-----------+-----------+------------+
| **CRUDE OIL**                 | 48.66     | 45.52     | 30.76      |
|                               |           |           |            |
| **West Texas Intermediate     |           |           |            |
| US**                          |           |           |            |
|                               |           |           |            |
| \$/Barrel                     |           |           |            |
+-------------------------------+-----------+-----------+------------+
| **NATURAL GAS**               | 5.34      | 5.46      | 4.99       |
|                               |           |           |            |
| **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

).