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

**Office of Energy Assurance**

**ENERGY ASSURANCE DAILY**

###### June 24, 2004

**Electricity**

#### Crews Clean Up After Storms in Wisconsin Crews worked to restore power and clear debris Thursday after tornado-spawning storms tore through Wisconsin, killing one person and causing millions of dollars in damage. The storms moved through the state Wednesday evening, downing trees and knocking out power to about 11,000 customers. More than 4,000 were still in the dark early Thursday, utilities said. [**http://www.newsday.com/news/nationworld/wire/sns-ap-severe-weather,0,2279376.story?coll=sns-ap-nationworld-headlines**](http://www.newsday.com/news/nationworld/wire/sns-ap-severe-weather,0,2279376.story?coll=sns-ap-nationworld-headlines)

**Update -- Limerick 2 Nuke Exiting Outage, Exelon Investigating Cause
of Scram**

Limerick-2 is coming back on line Thursday. The plant was out of service
after a scram\*, Exelon Nuclear said on Wednesday. The reactor shut down
automatically Tuesday afternoon after a breaker failed during switchyard
maintenance, Exelon Nuclear spokeswoman Ann Mary Carley said on
Wednesday. Exelon is investigating the cause of the breaker failure and
determining appropriate repairs, she said. Carley did not say when
repairs would be completed, but other electric market sources told
Platts today that Limerick-2 is expected to be back in service Thursday.

\*According to the Nuclear Regulatory Commission, a scram is the sudden
shutting down of a nuclear reactor, usually by rapid insertion of
control rods, either automatically or manually by the reactor operator.
May also be called a reactor trip. It is actually an acronym for
\"safety control rod axe man," the man assigned to insert the emergency
rod on the first reactor (the Chicago pile) in the U.S.
<http://www.platts.com/Nuclear/News/3697139.xml?S=n>

<http://www.nrc.gov/reading-rm/basic-ref/glossary/scram.html>

Reuters 1320, June 24, 2004

**Salem 1 at 19% Following Unplanned Maintenance, Company Says**

PSEG's 1,150 Megawatts Salem 1 nuclear unit is down to19% power. The
plant was taken offline yesterday as a grid disturbance led to slightly
higher vibrations on the main turbine generator pedestal. A bolt was
repaired and power can now be increased. Traders guessed that the unit
would be fully back on-line in a couple of days.

Bloomberg News, 1536 June 24, 2004

Reuters 1320, June 24, 2004

**Entergy's Vermont Yankee Nuke Plant May be back by July 4^th^
Weekend**

By the long U.S. July 4th weekend, traders said, Entergy\'s Vermont
Yankee plant would likely exit an outage following a fire that damaged
the outside of the unit\'s main transformer.

Reuters, 1320 June 24, 2004

**Florida Governor and Cabinet Rule in Favor of New Power Line and
Route**

Florida Power & Light Company today announced that the state\'s governor
and Cabinet ruled in favor of the company\'s plan to add an electric
transmission line to serve southwest Florida and to build it on a new
route separate from an existing transmission line corridor in the
region. The 54-mile transmission line will cost approximately \$24
million.

[*http://biz.yahoo.com/bw/040624/245534_1.html*](http://biz.yahoo.com/bw/040624/245534_1.html)

**Power Grid Upgrades Approved in CA**

The California Independent System Operator, which manages most of the
state power grid, on Thursday said it approved three projects costing
\$224 million to add new power lines and other equipment to the
transmission system. The biggest project is a \$148 million job to
install transformers and upgrade power lines running from new natural
gas-fired power plants in Arizona and Nevada to customers in the service
areas of Sempra Energy\'s San Diego Gas & Electric unit and Southern
California Edison, a subsidiary of Edison International. The other two
projects are a \$46 million line for Southern California Edison
customers in the Central Valley, and a \$30 million line and substation
in the Napa-Sonoma wine-producing region served by the Pacific Gas &
Electric unit of PG&E Corp. The jobs are expected to be completed in
2006.

Reuters, 1524 June 24, 2004

####### 

####### 

####### Petroleum

**Calif. Spot Gasoline up 6 Cents on Refinery Troubles**

Gasoline in the Los Angeles and San Francisco Bay markets on Thursday
was offered 6 cents higher over Wednesday\'s prices because of known and
rumored refinery problems in the San Francisco Bay area. San Francisco
Bay area refineries owned by Shell Oil Co. Shell and Valero Energy Corp.
were known to be repairing on Thursday units involved in the gasoline
production process.

Reuters, 1311 June 24, 2004

**Valero Repairing Naphtha Unit at Benicia, California, Refinery**

Valero Energy Corp., the third-largest U.S. refiner, said it is
repairing a naphtha hydrotreater unit at its 175,000 barrel-a-day
refinery in Benicia, California, northeast of San Francisco. For the
repairs, a new reactor is expected to be delivered, installed and
started up \`\`by the beginning of July,\'\' according to a statement
received by e-mail late yesterday from Valero spokeswoman Joanna Weidman
in San Antonio, Texas. \`\`Because we\'ve purchased and built
inventories of gasoline blending components, the impact on finished
gasoline production is expected to be minimal,\'\' the statement said.
Valero said on June 4 that it was shutting a naphtha reformer unit,
which processes desulfurized feedstock into high-octane gasoline
blending components, for 10 days to repair a steam leak, reducing the
refinery\'s gasoline production by 20,000 barrels a day. Bloomberg News,
0401 June 24, 2004

Reuters, 126 June 24, 2004

**Norway Oil Firms Declare Offshore Lock-out from Midnight Jun 28**

The Norwegian Oil Industry Association (OLF) said Thursday it planned to
impose a lockout for all the members of the Federation of Oil Workers
Trade Unions (OFS) and the Norwegian Association for Supervisors from
midnight June 28. The lockout, which follows the announcement of planned
escalation by striking offshore workers, means that almost all
production from the Norwegian continental shelf will cease. With the
workers now warning of further escalation, we see no other option for
ending the dispute than to impose a lockout,\" OLF director general Per
Terje Vold said in a statement. The OLF said every company affected by
the present strike was supporting the lockout. The strike, now in its
seventh day, is currently affecting at least 370,000 b/d, or over 13% of
the country\'s oil production. Statoil, one the operators hardest hit by
the strike, said it was now planning a controlled shut-down of its
production facilities and \"return of personnel to land.\"

<http://www.platts.com/Oil/News/6418566.xml?S=n>

<http://biz.yahoo.com/rb/040624/energy_norway_lockout_1.html>

<http://biz.yahoo.com/rb/040624/markets_oil_6.html>

**Norwegian Oil Workers Would Return to Work If Strike Declared Illegal:
OFS**

Norway\'s main oil workers\' union the Federation of Oil Workers Trade
Unions (OFS) expects the government to step in to halt an ongoing
offshore workers strike which is threatening to shut in practically all
Norway\'s oil and gas

production from midnight June 28, OFS president Terje Nustad said
Thursday. \"For now we will continue the strike but we believe the
government will intervene tomorrow,\" Nustad told Platts. The government
has so far stayed on the sidelines of the dispute between unions and
employers which is now in its seventh day and affecting over

370,000 b/d of oil production. Nustad said strike escalation which was
scheduled to take ExxonMobil\'s 85,000 b/d Ringhorne oilfield off line
from early Thursday failed to shut the field after ExxonMobil \"broke
the law\" by

pressuring the workforce to continue. Unions, who want better pension
rights, pledged Wednesday a major escalation to the strike which would
shut in over a quarter of the country\'s 2.9-mil b/d oil production and
a third of its 200-mil cu m/day gas output from midnight June 27. The
last time the Norwegian government intervened to halt an oil workers\'
strike was in June 2000 after oil firms announced a complete lockout of
offshore staff on the eleventh day of a strike which shut in about
220,000 b/d. At that time government forced a solution between the
unions and oil firms after a total 13 days of strike action.

<http://www.platts.com/Oil/News/8915337.xml?S=n>

**Norwegian Oil Outage Merely Mops Up Market Surplus**

Striking oil workers shutting off more than a third of a million barrels
per day of Norwegian production have done little to support North Sea
physical crude markets, and traders say the outage has so far merely
helped mop up plentiful supply that could otherwise have dragged prices
even lower.

Reuters, 0518 June 24, 2004

[**Chevron CEO Slams US Downstream
Barriers**](http://www.energyintel.com/DocumentDetail.asp?document_id=124839)\
ChevronTexaco CEO David O\'Reilly on Wednesday blamed regulatory
barriers rather than poor returns on investment for oil companies not
building new refineries in the US.

Oil Daily, June 24, 2004

**Nigeria Tells Oil Operators to Pump at Full Tilt**

Nigeria has told foreign oil companies to pump as much as they can this
month after OPEC sanctioned a production hike earlier this month,
foreign oil officials said on Thursday. Executives at multinational oil
companies, which produce all of Nigeria\'s crude oil on behalf of the
West African state, said the instruction should lead to steadily rising
exports over the next few weeks as tankers are booked to lift the oil.
Nigeria pumped an all-time record of 2.74 million barrels per day (bpd)
of oil in March, according to central bank data, but operators said
output fell in April and May as quota curbs tightened.

Reuters, 0718 June 24, 2004

**Iraq South Oil Export Pipeline Nearly Done**

Repairs have started on a sabotaged oil pipeline in southern Iraq which
could allow full exports from the country\'s offshore Gulf terminals to
resume on Friday once work is completed, an oil official said.

Reuters, 1258 June 24, 2004

[*http://biz.yahoo.com/rc/040624/energy_iraq_1.html*](http://biz.yahoo.com/rc/040624/energy_iraq_1.html)

**Saudi Ready to Replace Drop in Norway Oil, OPEC Says**

Saudi Arabia, the world\'s largest oil exporter, is ready to meet any
shortage caused by a strike in the

Norwegian oil industry provided the disruption lasts into next week, an
OPEC delegate said. The kingdom, which is pumping 9.1 million barrels a
day this month, retains about 1.5 million barrels a day of idle capacity
and is willing to use it to ensure that all consumers needs are met,
said the OPEC delegate, who asked not to be identified.

Bloomberg 0549, June 24, 2004

#### OPEC Will Proceed With Plan to Boost Output Quota as of Aug. 1

OPEC President Purnomo Yusgiantoro said the oil-producing group will
proceed with a plan to increase

output quota as planned on Aug. 1 as fuel demand stays high during
summer.

Bloomberg News, 0127 June 24, 2004

#### Natural Gas 

**House Panel Urges Development of \'Template\' to Get LNG Projects to
Market Quickly**\
Rep. Doug Ose (R-CA), chairman of the House Government Reform
Committee\'s subcommittee on energy policy, recommended Tuesday that
FERC and the U.S. Coast Guard develop a \"programmatic template\" so
that companies interested in developing liquefied natural gas (LNG)
projects would know exactly what is required of them to achieve agency
approval and swift processing. He also supported the concept of the
Commission picking the most preferable sites for the location of onshore
LNG facilities. Natural Gas Intelligence, June 24, 2004
[http://powermarketers.netcontentinc.net/newsreader.asp?ppa=8kowu%5DZipurmsqRUie%7DGL%7Dbfej%5B%21](http://powermarketers.netcontentinc.net/newsreader.asp?ppa=8kowu%5DZipurmsqRUie}GL}bfej%5B!)

####### Other

Nothing to report.

**Energy Prices**

+-------------------------------+-----------+-----------+------------+
|                               | **Latest  | **Week    | **Year     |
|                               | (6        | Ago**     | Ago**      |
|                               | /24/04)** |           |            |
+-------------------------------+-----------+-----------+------------+
| **CRUDE OIL**                 | 37.81     | 38.51     | 30.05      |
|                               |           |           |            |
| **West Texas Intermediate     |           |           |            |
| US**                          |           |           |            |
|                               |           |           |            |
| \$/Barrel                     |           |           |            |
+-------------------------------+-----------+-----------+------------+
| **NATURAL GAS**               | 6.41      | 6.57      | 5.84       |
|                               |           |           |            |
| **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