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

**Office of Energy Assurance**

**ENERGY ASSURANCE DAILY**

###### May 18, 2004

**Electricity**

# Chances Slim for Power Outage in Nevada, Experts Claim 

Don\'t worry about a power outage leaving you sweating in the dark this
summer, electric industry experts say. But don\'t be surprised if Nevada
Power Co. needs a rate increase next year to cover higher costs for fuel
and purchased power it needs this summer. That\'s the assessment of
Nevada Power executives and industry observers. \"I think we\'re in very
reasonable shape for this summer,\" said Roberto Denis, vice president
of energy supply.

G. Edwards, Las Vegas Review-Journal \-- May 15, 2004
<http://www.energycentral.com/centers/news/daily/article.cfm?aid=4860040>

**Interstate Power and Light Company Commissions Iowa Power Plant**\
Interstate Power and Light Company (IPL), the Iowa utility subsidiary of
Alliant Energy Corp. announced today the commissioning of its
565-megawatt (MW) Emery Generating Station, a natural gas-fired,
combined-cycle power plant near Mason City. On schedule, this completes
one phase of IPL\'s utility generation plan outlined in December 2003.
Emery Generating Station is the first new power plant constructed in
IPL\'s service territory since 1981 when Ottumwa Generating Station came
online. When asked why IPL would build a natural gas plant during a
period of price volatility, Aller\'s answer was reliability.
<http://biz.yahoo.com/prnews/040518/cgtu007_1.html>

**US Power Grid Still Vulnerable -Energy Secretary**

The U.S. power grid is in better shape than before last August\'s
massive blackout but remains vulnerable this summer, Energy Secretary
Spencer Abraham said on Tuesday. But Abraham said there still could be
problems this summer if owners of the nation\'s 160,000 miles of
high-voltage grid neglect suggested improvements from NERC and others.
He also said, though, that many upgrades have been made since the
blackout last August that left 50 million people in the dark. "We also
know that if somebody is not operating their system the right way there
could be problems,\" Abraham told reporters at a news briefing. A
comprehensive energy bill now stalled in the U.S. Senate would give the
Federal Energy Regulatory Commission (FERC) the power to enforce
mandatory reliability rules that NERC plans to finalize early next year.
In the meantime, FERC has warned that California faces \"very
troublesome conditions\" this summer because of above-average
temperatures and low hydropower supplies. NERC, the industry-funded
watchdog, last week warned that unanticipated equipment problems and
extremely hot weather could cause problems in California and New York.
Without the legislation, FERC and other agencies will have fewer options
to address reliability, Abraham said. He dismissed calls by some
Democrats for Congress to pass a stand-alone bill with electric
reliability rules.

Reuters, 1609 May 18, 2004

**Reliability Watchdog Supports Cross-Sound Cable**\
The electric reliability watchdog for northeastern North America said
Tuesday it supported the operation of the Cross-Sound cable to help keep
the lights on Long Island, New York, this summer. In an assessment, the
watchdog, Northeast Power Coordinating Council, said there was enough
energy available to meet the region\'s air conditioning demand this
summer but supplies on Long Island would be tight. That assessment,
however, included the operation of the Cross-Sound cable. The loss of
the cable, NPCC said in a release, would further exacerbate Long
Island\'s tight supply situation. The 24-mile cable, shut on May 7 by
the U.S. Department of Energy, can carry 330 megawatts under the Long
Island Sound from New Haven, Connecticut, to Shoreham, New York.
<http://biz.yahoo.com/rc/040518/utilities_hydroquebec_crosssound_1.html>

####### 

####### Petroleum

**BP Slows Texas Refinery-Unit Operations for Repairs**

BP plans slowed operation of a unit at its refinery in Texas City,
Texas, for repairs, according to the Texas Commission on Environmental
Quality. The company on Sunday reduced processing rates for the
alkylation unit, which produces a gasoline-blending component that
improves the antiknock value of the fuel. The unit will

resume normal operations on Thursday, according to a report BP filed
with the state commission. Repairs will be made to a condenser at the
refinery that resulted in a leak into the cooling tower water system,
the state

regulator said.

Bloomberg News, 1628 May 18, 2004

**Exxon Mobil Slowed Gasoline Unit at Texas Refinery**

Exxon Mobil Corp. slowed a gasoline-making unit at its refinery in
Beaumont, Texas, according to state regulators.

Output from the fluid catalytic cracker, which process vacuum gasoil
into gasoline and other fuels, was slowed Sunday after a boiler failure
that may have been caused by a leak in a tube, according to a report
Exxon Mobil filed with the Texas Commission on Environmental Quality.
The company is devising a maintenance plan to repair the

boiler, according to the report posted on the commission\'s Web site.

Bloomberg News, 1555 May 18, 2004

**Update \-- Exxon Mobil Louisiana Plant Had Compressor Failure**

Exxon Mobil Corp. experienced a compressor failure last week at its
refinery in Chalmette, Louisiana, according to state regulators. \`\`The
gas compressor tripped causing sulfur dioxide to be flared, or burned,
into the air,\'\' said Rodney Mallett, a spokesman for the Louisiana
Department of Environmental Quality in Baton Rouge. \`\`It didn\'t slow
operations because the substitute compressor was used in its place.\'\'
The incident occurred last Wednesday, Mallett said.

Bloomberg News, 1602 May 18, 2004

**US Regular Unleaded Soars 7.6 Cents to Record \$2.017/Gal: EIA**

Average US retail regular-grade gasoline prices broke the \$2/gal mark,
surging 7.6 cts over the past week to set a fresh record,
non-inflation-adjusted, of \$2.017/gal, the US Energy Information
Administration said Monday. Nationwide average pump prices, which have
risen 17.3 cts/gal over the past two weeks, are now 51.9 cts/gal higher
than the corresponding week a year ago, although they are still well shy
of the US all-time, inflation-adjusted mark near \$3/gal in 1981 and the
pump prices regularly seen in Europe. Prices in every region of the
country hit record highs. West Coast regional average pump prices, the
highest in the nation, increased 4.3 cts for the week ended May 17 to
average \$2.243gal. Midwest regular prices increased the most
week-to-week, rising 9.2 cts to average \$2.003/gal. East Coast retail
prices surged 8.8 cts to average \$1.981/gal. Gulf Coast pump prices
averaged \$1.885/gal for the week, up 6.7 cts, while Rocky Mountain
prices averaged \$1.987/gal, up 1.9 cts.
<http://www.platts.com/Oil/News/2807446.xml?S=n>

<http://money.cnn.com/2004/05/18/pf/autos/gas_prices/index.htm?cnn=yes>

**Mexico \'Likely\' to Boost Exports if OPEC Hikes Output: Calderon**

Mexico will \"likely\" raise its crude export level, currently at
1.86-mil b/d,

if OPEC decides to increase its formal production ceiling, Mexican
Energy

Secretary Felipe Calderon said Monday. But Calderon, during a press
conference on the sidelines of the 13th Latin American Energy Conference
here, cautioned that any increase would be \"marginal.\"
<http://www.platts.com/Oil/News/6033736.xml?S=n>

**Normal Crude Exports from Southern Iraq Ports \"Very Soon\":SOMO**

A key crude oil pipeline in southern Iraq has been repaired and is being
tested before normal exports resume from Iraq\'s Persian Gulf ports,
SOMO director general Shumkhi Farraj said Tuesday. Farraj told Platts by
telephone from Baghdad that the pipeline feeding Basra terminal was
being tested for leaks and that he hoped exports would return to their
normal level of 1.8-mil b/d \"very soon.\" He said: \"The pipeline is
pumping to the terminal but exports are not fully back to normal. They
have to first check whether there are any problems or leaks.\" The
pipeline was hit by an explosion and fire May 9. Exports resumed a day
later but have been running at around half the 1.7-1.8-mil b/d that Iraq
had achieved in recent weeks. Farraj also said that unspecified
\"problems\" with the northern pipeline from the Kirkuk oilfields had
halted the flow of crude oil to storage tanks in the Turkish port of
Ceyhan, adding that there were no immediate plans to issue a new tender
for Kirkuk.

<http://www.platts.com/Oil/News/6823208.xml?S=n>

**UAE Says Ready to Hike Oil Output if Needed**\
Key Gulf oil producer the United Arab Emirates said on Tuesday it stands
ready to boost crude output, if needed, in support of any OPEC output
increase. Leading OPEC producer Saudi Arabia has proposed a minimum 1.5
million barrels per day (bpd) rise in OPEC\'s output ceiling in a bid to
cool oil prices which have shot to 21-year highs. The UAE is one of the
few OPEC members with spare production capacity. Its official cartel
quota is 2.05 million bpd versus capacity of about 2.45 million.
<http://biz.yahoo.com/rm/040518/energy_emirates_opec_1.html>

**Update \-- Marathon Mogas Customers OK after Minn. Plant Outage**

Marathon Ashland Petroleum\'s customer needs have been met despite last
week\'s shutdown of a 20,000 barrels per day (bpd) gasoline-making fluid
catalytic cracking unit at the company\'s refinery in St. Paul,
Minnesota, a source familiar with the plant\'s operation said Tuesday.
The FCC went down May 13 and will be down at the 70,000-bpd refinery for
at least two weeks, the source said. Still, with purchases from the
nearby Flint Hills Resources LP in Pine Bend, Minnesota, customers\'
needs have been met, said the source who declined to be identified.

Reuters, 1504 May 18, 2004

#### 

#### Natural Gas 

**Natural Gas Futures Fall, Tracking Drop in Competing Oil Fuels Natural
gas traded in** New York fell 4.2 percent, the biggest drop in more than
three months, as a decline in crude oil cut prices for competing
petroleum-based fuels. Gas for June delivery fell 27 cents to \$6.154
per million British thermal units on the New York Mercantile Exchange.
It was the biggest one-day drop since Feb. 5. Crude oil in New York fell
\$1.01, or 2.4 percent, to \$40.54 a barrel, leading prices for oil
products lower. Bloomberg News, 1425 May 18, 2004

####### 

####### Other

Nothing to report.

**Energy Prices**

+-------------------------------+-----------+-----------+------------+
|                               | **Latest  | **Week    | **Year     |
|                               | (5        | Ago**     | Ago**      |
|                               | /18/04)** |           |            |
+-------------------------------+-----------+-----------+------------+
| **CRUDE OIL**                 | 40.32     | 40.32     | 29.07      |
|                               |           |           |            |
| **West Texas Intermediate     |           |           |            |
| US**                          |           |           |            |
|                               |           |           |            |
| \$/Barrel                     |           |           |            |
+-------------------------------+-----------+-----------+------------+
| **NATURAL GAS**               | 6.28      | 6.24      | 5.96       |
|                               |           |           |            |
| **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