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

**Office of Energy Assurance**

**ENERGY ASSURANCE DAILY**

###### June 23, 2004

**Electricity**

####### 

######### Limerick 2 Shut Down For Unplanned Maintenance, Company Says

######### Excelon Nuclear's Limerick, PA 1,115 Megawatt nuclear unit was shut down following an electrical malfunction in an offsite switchyard

######### Bloomberg News, 1202 June 23, 2004

######### 

#### Diablo Canyon 2 Nuke Operating at Full Power, Company Says

Pacific Gas & Electric's 1,100 Megawatt Diablo Canyon 2 nuclear unit is
now operating at maximum capacity after completing repairs.

Bloomberg News, 1156 June 23, 2004

**Monticello 1 Nuclear Unit Powers up to 97% by this Morning**

Bloomberg News, 0810 June 23, 2004

######### Fire at PA Co-Generation Plant Last Saturday

The fire at the John B. Rich Memorial Power Station was discovered at
about 4 p.m. in a building that houses the turbines and boilers used in
the co-generation process. Fire officials said thick pads of insulation
between a roof and an inner roof caught fire and were smoldering.
Firefighters had difficulty reaching the flames from the inside due to a
heavy metal barrier below the insulation. Also, getting at the blaze
from above proved just as hard since the plant\'s roof is covered by
stone. The building, said to be more than seven stories tall, also made
the firefighting task difficult because of the exertion it took to reach
the roof. The power plant never stopped operating. Officials said a fire
marshal will investigate the cause of the fire.\
[http://www.zwire.com/site/news.cfm?newsid=12045429&BRD=2311&
PAG=461&dept_id=482260&rfi=6](http://www.zwire.com/site/news.cfm?newsid=12045429&BRD=2311&PAG=461&dept_id=482260&rfi=6)

**Talks Fizzle on Coal-Fired Power Plant for Clark County, KY.** -The
plug was pulled on negotiations to build a coal- fired power plant in
Clark County, signaling a likely death for the controversial project.
Officials with East Kentucky Power Cooperative told state regulators
last week that the company no longer has plans to purchase electricity
from a much-delayed power plant that would be built by Kentucky Pioneer
Energy. The power plant, which until recently was expected to use
pelletized garbage as fuel, was to sit adjacent to East Kentucky
Power\'s J.K. Smith Station at Trapp. East Kentucky Power was to lease
the land for the new 540-megawatt plant and buy most of the electricity
it produced. In a certified letter dated June 16, the utility said there
are too many \"significant remaining uncertainties surrounding the KPE
project\" to move forward.
[http://powermarketers.netcontentinc.net/newsreader.asp?ppa=8knpp%5EZiprtqrtUUhd%7DGL%7Dbfej%5B%21](http://powermarketers.netcontentinc.net/newsreader.asp?ppa=8knpp^ZiprtqrtUUhd}GL}bfej%5B!)

#### Southern California Edison Ordered to Begin Transmission Expansion Process

On June 9, the California Public Utilities Commission (CPUC) issued an
interim opinion that could result in substantial new transmission
capacity being built in the Tehachapi area to take advantage of the wind
power resources in the area. The decision was adopted by a unanimous
decision of the Commission.

The full decision is available at
http://www.cpuc.ca.gov/Published/Final_decision/37393.htm

<http://pro.energycentral.com/professional/news/power/news_article.cfm?id=4943776>

####### 

####### Petroleum

**Citgo Starts Gasoline Unit at Lake Charles, Louisiana, Refinery**

Citgo opened a new unit at its Lake Charles, Louisiana, refinery, a
spokeswoman said. The gasoline hydrotreater was the second to come on
line this year at the plant. The two units have the capacity to process
35,000 barrels of fuel a day each. The refinery has capacity to process
320,000 barrels of crude oil a day and can produce 180,000 barrels of
gasoline a day, according to the company\'s Web site.

Bloomberg News, 1246 June 23, 204

Reuters, 1339 June 23, 2004

**Shell Says Restarting Hydrocracker at Deer Park**

Shell said it expected to return to full production at its 340,000
barrel per day joint-venture refinery in Deer Park, Texas, by Wednesday
evening, when it completes the restart of a hydrocracker. The
hydrocracker was shut on Saturday because of a valve failure, said
company spokesman Dave McKinney. The restart sequence began on Tuesday
and should be completed by Wednesday evening, he said.

Reuters, 1205 June 23, 2004

<http://www.platts.com/Oil/News/6351778.xml?S=n>

**Exxon Mobil Restarts Refinery Closed Last Week, Dow Jones Says**

Exxon Mobil Corp. restarted a fluid catalytic-cracking unit at a Texas
refinery that was shut down last week because of a leak. Repairs at the
Baytown, Texas, refinery are complete, and the unit is expected to reach
normal operating capacity by midday Bloomberg News, 1334 June 23, 2004

**While Crude Stocks Build, Lagging Products a Concern: EIA**

The US Energy Information Administration, while pleased that crude
stocks have climbed by 6.5-mil bbl over the past four weeks, indicated
Wednesday it is concerned about smaller-than-normal builds or outright
declines in products inventories that should be stable or climbing this
time of year. See This Week in Petroleum Report at end of this report
for more details.

Bloomberg News, 1336 June 23, 2004
<http://biz.yahoo.com/rb/040623/energy_fuel_government_1.html>

<http://www.platts.com/Oil/News/1636431.xml?S=n>

**May be a Problem with ConocoPhillips Lake Charles FCC**

Late this afternoon it was reported that the reformer was still shut but
that the FCC was restarting.

Reuters, 1650 and 1652 June 23 2004

**Norway Strike Extension to Shut in Additional 260,000 b/d, 30-mil cu
m/d**

Norway\'s Federation of Oil Workers\' Trade Unions and Lederne unions
said Wednesday they planned to widen their open-ended offshore strike to
shut in an additional 260,000 b/d of oil production and 30-mil cu m/d of
gas from

Midnight Jun 27. The two unions said walkouts would shut down the
Statoil-operated Norne field which is producing 140,000 b/d of oil and
30-mil cu m/d of gas. Norsk Hydro\'s Heimdal gas field will also be shut
in.

<http://www.platts.com/Oil/News/7187834.xml?S=n>

<http://biz.yahoo.com/ap/040623/norway_oil_strike_4.html>

**Iraq Oil Exports Remain Limited After June 15 Pipeline Attack**

Iraq\'s oil exports through the Persian Gulf remain \`\`small\'\' after
two southern pipelines were damaged in attacks last week, with tankers
taking on cargoes of crude already in storage, the director general of
the South Oil Co. said.

Bloomberg News, 0750 June 23, 2004

**Iraq Restarts North Oil Export Pipeline**\
Iraq resumed pumping crude from its northern oilfields to Turkey on
Wednesday at a reduced rate after repairing an export pipeline that was
sabotaged three weeks ago, North Oil Company officials said. \"The
repairs are complete,\" said one official, adding crude was flowing at a
rate of 200,000 barrels per day but declining to say when loadings from
Ceyhan, on Turkey\'s Mediterranean coast, could start. Iraq sent 800,000
barrels of Kirkuk crude daily through the northern pipeline before the
war but the line has been beset by bombings since the war ended,
managing only sporadic exports. Crude exports through southern terminals
are flowing at about one million barrels per day, compared with 1.8
million bpd exported before the attacks.
<http://biz.yahoo.com/rb/040623/energy_iraq_north_1.html> Bloomberg
News, 0417 June 23, 2004 Reuters, 0845 June 23, 2004

#### Natural Gas 

####### Public Resistance Narrowing LNG Options in North America

Public acceptance is critical for the approximately 45 LNG
regasification terminals being proposed for North America. Local public
opposition to the construction of LNG terminals already has caused
several proposed projects to be cancelled. Oil & Gas Journal, June 22,
2004

<http://pro.energycentral.com/professional/news/gas/news_article.cfm?id=4943693>

#### 

#### Gas-Quality Debate Heats Up As More US LNG Imports Loom

Over the last 4 years, two distinct influences have raised-end user
concerns over the hydrocarbon content of natural gas in the US. Sharp
increases in the price of natural gas have created a difficult
environment for the economical extraction of NGL. At times, producers
and processors have found it to be more profitable to leave NGLs in the
gas and sometimes very costly to extract them. Oil & Gas Journal, June
22, 2004
<http://pro.energycentral.com/professional/news/gas/news_article.cfm?id=4943703>

**Industry Likely to Keep Pace With LNG Vessel Demand**

World shipbuilding capacity has kept pace with new LNG vessel demand
during the past decade, and shipyards now are being asked to find ways
to deliver more ships each year because many more LNG projects are
proposed. Oil & Gas Journal, June 22, 2004

<http://pro.energycentral.com/professional/news/gas/news_article.cfm?id=4943689>

[US LNG Supply
Gap](http://www.energyintel.com/DocumentDetail.asp?document_id=124701)\
Developers of several US LNG terminals are hoping that once they build
their multi-million-dollar facilities, the tankers will simply appear.
But will they? Or has US enthusiasm for LNG terminals overshot the mark,
so that for two to three years at least, it will have more terminal
capacity than available LNG supply? This is at odds with previous
expectations that US regasification capacity would be the critical
constraint on Atlantic Basin LNG trade**.** World Gas Intelligence, June
23, 2004

# 

# 

# MA Representative Markey Says LNG Studies Equate to Junk Science U.S. Rep. Ed Markey, D-Mass., informed a congressional panel Tuesday in Washington that federal officials have ignored the remote siting provision of laws governing LNG facilities. Markey, author of key federal LNG laws, also said that the Federal Energy Regulatory Commission and the Department of Energy have produced and relied on LNG safety studies with so many flaws or shortcomings they amounted to junk science. Markey, a senior member of the House homeland security committee, agreed that LNG would probably need to play a role in the country\'s energy future, but said that Congress must see that the federal government takes steps to ensure that any future LNG terminals are sited in locations that prevent them from becoming an attractive terrorist target. During the hearing, Markey took issue with the FERC and the Department of Energy specifically for funding \-- and then using \-- safety studies that were never scrutinized by independent scientists before appearing in federal permits for new LNG terminals. Several of the studies were later found to have significant flaws. 

<http://www.al.com/news/mobileregister/index.ssf?/base/news/108798219760520.xml>

**To see the entire Mobile Register Series on LNG go to:**

<http://www.al.com/specialreport/mobileregister/?lng.html>

**To see Rep. Markey\'s Work on Liquefied Natural Gas Security go to**:

<http://www.house.gov/markey/LNGsec.htm#LOC>

####### Other

**Port Authority Reaches Deal on Coal Terminal** The Alabama State Port
Authority approved a deal Tuesday with four Southern Company utilities
that is tied to about \$25 million in improvements at McDuffie Island
Coal Terminal over the next two years, said docks director James Lyons.
The expansion project is designed to accommodate anticipated increases
in import coal, Lyons said. The project would nearly double capacity at
McDuffie, allowing two ships, rather than one, to be handled at a time,
he said. The project is expected to provide an additional 8 million tons
per year capacity and also provide rail service to utility plants not
served by McDuffie. One advantage, Lyons said, is that the power
companies would have the ability to load coal onto railcars in a faster,
more precise manner.
<http://www.al.com/business/mobileregister/index.ssf?/base/business/108800010265930.xml>

**Energy Prices**

+-------------------------------+-----------+-----------+------------+
|                               | **Latest  | **Week    | **Year     |
|                               | (6        | Ago**     | Ago**      |
|                               | /23/04)** |           |            |
+-------------------------------+-----------+-----------+------------+
| **CRUDE OIL**                 | 37.56     | 37.33     | 30.22      |
|                               |           |           |            |
| **West Texas Intermediate     |           |           |            |
| US**                          |           |           |            |
|                               |           |           |            |
| \$/Barrel                     |           |           |            |
+-------------------------------+-----------+-----------+------------+
| **NATURAL GAS**               | 6.30      | 6.38      | 5.89       |
|                               |           |           |            |
| **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