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

**Office of Energy Assurance**

**ENERGY ASSURANCE DAILY**

###### August 20, 2004

**Highlight / Major Developments**

# 

# Update \-- Texas Gas Facility Has Second Explosion; Evacuation Zone Expanded

A second explosion rocked an underground gas storage facility early
Friday, forcing authorities to expand evacuations around the blaze that
continued burning a day after an initial blast triggered by leaking gas.

The fire at Duke Energy\'s Moss Bluff storage facility intensified
overnight, an official said. The second explosion was reported at 1:15
a.m. and was seen as far as 20 miles away, witnesses said. The second
explosion Friday morning happened because the fire caused a valve to
give way on top of the storage cavern, said Danny Gibbs, a spokesman for
Charlotte, N.C.-based Duke Energy. Everyone within a three-mile radius
of the facility was being evacuated after the second blast and
additional shelters were being set up, authorities said. The first
explosion had prompted evacuations within a one-mile radius and
surrounding highways were closed. \"We assume there are over 100
people\" in the new evacuation order, a Liberty County Sheriff\'s
Department dispatcher said. The first blast at the facility early
Thursday sent flames 150 to 200 feet into the air, awakening residents.
An employee was making his rounds at the natural gas storage facility
when the fireball erupted about 4 a.m. He escaped unharmed, said
sheriff\'s Capt. Bill Tidwell. \"Everybody\'s been accounted for,\" he
said. It could take days before the blaze burns itself out, firefighters
said. Workers have shut off the supply of gas feeding the underground
storage cavern, which holds 6 billion cubic feet. They said two adjacent
storage caverns carved out of the same salt dome were not ignited and
Tidwell said authorities did not consider the fire to threaten them.
Authorities called in experts at capping blown-out wells to examine how
to cool down and control the fire at the Duke Energy site. One leak
feeding the flames is apparently located at a flange between a master
valve and emergency shut-off, said Guy Grossman, Houston district
director of the oil and gas division of the Texas Railroad Commission,
which oversees natural gas storage. Another valve that possibly could be
used to turn off the flow of gas was too hot to reach. The cause of the
new blast had not been determined. Moss Bluff is a sparsely populated
area 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/08/20/gas.explosion.ap/index.html>
[http://www.marketwatch.com/news/yhoo/story.asp?source=blq/yhoo&siteid=yhoo&dist=yhoo&guid=%7B12C3FC5D%2D7FD8%2D4938%2D9D9F%2DEF342279F66F%7D](http://www.marketwatch.com/news/yhoo/story.asp?source=blq/yhoo&siteid=yhoo&dist=yhoo&guid={12C3FC5D-7FD8-4938-9D9F-EF342279F66F})

<http://www.newsday.com/news/nationworld/wire/sns-ap-gas-explosion,0,7986750.story?coll=sns-ap-nationworld-headlines>

<http://biz.yahoo.com/ap/040820/duke_energy_fire_2.html>

<http://biz.yahoo.com/rb/040820/utilities_duke_mossbluff_2.html>

<http://biz.yahoo.com/prnews/040820/clf020_1.html>

<http://biz.yahoo.com/prnews/040820/nyf023_1.html>

**Update \-- Hurricane Charley** 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**    **801,800**    **72,200**     **0616 20 Aug**

  **Progress Energy**  **502,000**    **421,432**    **80,568**     **0113 20 Aug**

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

  **Municipalities**   **212,000**    **150,000+**   **\<62,000**   **AM 19 Aug**

  **Electric Coops**                                                

  **Lee County**       **144,000**    **128,000**    **\<16,000**   **1700 19 Aug**

  **Peace River**      **30,000**     **18,000**     **12,000**     **1106 20 Aug**

  **Glades**           **\<26,000**   **?**          **?**          

  **Sumter**           **Some**       **All**        **0**          **AM 14 Aug**

  **Clay**             **1,000**      **1,000**      **0**          **AM 20 Aug**
  -------------------- -------------- -------------- -------------- ----------------

**Sources: Office of Energy Assurance situation report, 1000 August 20
and FPL, Progress Energy, Tampa Electric websites and the websites of
the following electric coops (the ones hit hardest by the storm): Lee
county, Peace River, Glade, Sumter, and Clay.**
<http://www.lcec.net/charley.htm>
<http://www.preco.org/updates_all.asp?id=16>
<http://www.prnewswire.com/cgi-bin/stories.pl?ACCT=104&STORY=/www/story/08-20-2004/0002235484&EDATE>**=**
<http://gladesec.com/>
[http://www.sumter-electric.com/news/2004Releases/8-14-04%20Hurricane%20Charley3.pdf](http://www.sumter-electric.com/news/2004Releases/8-14-04 Hurricane Charley3.pdf)
<http://clayelectric.com/whatsnew.htm>

\*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."

**Electricity**

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

**DTE\'s Michigan Fermi 2 Nuke Back at Full Power**\
DTE Energy Co.\'s 1,130-megawatt Fermi 2 nuclear unit in Michigan
returned to full power by early Friday, the Nuclear Regulatory
Commission said in its power reactor status report. On Thursday, the
unit had ramped up to 75 percent of capacity after exiting a work outage
begun on about Aug. 9 to work on an emergency diesel generator.
<http://biz.yahoo.com/rc/040820/utilities_dte_fermi_1.html>

**Exelon\'s Ill. Dresden 2 Nuke Starts to Exit Outage**\
Exelon Corp.\'s 800 megawatt Dresden 2 nuclear unit in Illinois started
to exit a work outage and ramped up to 1 percent of capacity by early
Friday, the Nuclear Regulatory Commission said in its power reactor
status report. The unit had been shut since about Aug. 16 to repair a
cracked footing on the main generator.
<http://biz.yahoo.com/rc/040820/utilities_exelon_dresden_1.html>

**Progress\' N.C. Brunswick 1 Nuke up to 92 Pct Power**\
Progress Energy Inc.\'s 872-megawatt Brunswick 1 nuclear unit in North
Carolina ramped up to 92 percent of capacity by early Friday, the
Nuclear Regulatory Commission said in a power reactor status report. On
Thursday, the unit was operating at 67 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/040820/utilities_progress_brunswick_1.html>

**San Antonio Shuts JT Deely Unit 1**

San Antonio's 405 MW Coal-Fired JT Deely 1 unit was shut down on August
19.

Reuters, 1352 August 20, 2004

**SCE's Big Creek Plant Off Line**

SCE's 200 MW Big Creek hydro plant was shut down on August 20.

Reuters, 1352 August 20, 2004

**Update \-- Calif. Regulators Clear Controversial Grid Project**\
California utility regulators on Thursday approved a controversial \$207
million project for Pacific Gas & Electric Co. to build a new
transmission line to give San Francisco more reliable electricity
service. The five-member California Public Utilities Commission
unanimously approved the 27-mile-long project for the PG&E Corp.
subsidiary despite strong opposition from 400 residents of the upscale
suburb of Burlingame, who wanted the line underground and moved farther
away from their homes. They feared possible health effects from electric
and magnetic fields \-- EMFs \-- created by the 230,000-volt line, plus
reduced property values, Terry Nagel, a member of the Burlingame City
Council, told the commission. But the commission selected a route closer
to the homes with the line underground at a depth of 11 feet near
residential neighborhoods, schools and day-care centers.
<http://biz.yahoo.com/rc/040819/utilities_california_transmission_2.html>
<http://sanfrancisco.bizjournals.com/sanfrancisco/stories/2004/08/16/daily49.html>

**Capacity on Pacific DE Intertie to be Reduced Monday August 23**

The Bonneville Power Authority said the capacity on the Pacific DC
intertie would fall from 1,900 MW on Friday to 900 MW on Monday, cutting
the amount of cheap hydropower power energy companies could move from
the Pacific Northwest to southern California. Capacity on the
California/Oregon AC intertie, meanwhile, was expected to hold steady at
4,500 MW on both Friday and Monday. At full capacity, about 4,800 MW of
cheap hydropower can move from the Pacific Northwest to cities in
northern and southern California on the California/Oregon AC, while the
Pacific DC can carry about 2,900 MW from the Northwest to southern
California.

Reuters, 1352 August 20, 2004

**Regional Electric System Operator Confirms Reliability Benefits of
Bangor Hydro Transmission Project**

Bangor Hydro-Electric Company today announced that the Independent
System Operator of New England (ISO-NE) has approved the Northeast
Reliability Interconnect Project (NRI) as a Pool Transmission Facility,
or PTF in recognition of its regional reliability benefits. ISO-NE
examined a range of options and concluded that the NRI will best address
current system reliability concerns arising out of Maine. The decision
means that up to \$90.4 million in costs of building the US section of a
new 345 kV transmission line connecting eastern Maine with New
Brunswick, Canada will be shared across all 6.5 million customers within
the New England Power Pool (NEPOOL).
<http://pro.energycentral.com/professional/news/power/news_article.cfm?id=5065875>

**Petroleum**

**Oil Prices Decline After Approaching \$50 Per Barrel** A welcome drop
off in oil prices sent stocks sharply higher Friday, sparking hopes that
the stock market\'s recent downturn was at an end. The major indexes
were all poised to end the week higher. A barrel of light crude was
quoted at \$47.60, down \$1.10, on the New York Mercantile Exchange
after hitting a record intraday high earlier in the session at \$49.40.
That eased Wall Street\'s fears that skyrocketing oil prices could spur
inflation, raise consumer prices and put a large dent in third quarter
earnings reports.
<http://biz.yahoo.com/rb/040820/markets_stocks_11.html>
<http://biz.yahoo.com/ap/040820/wall_street_13.html>

**Shell Deer Park, TX, Refinery to Cut Feed-State**\
The Shell-PEMEX 340,000 barrels-per-day (bpd) Deer Park, Texas, refinery
will do maintenance on a spent air incinerator Aug. 22-27 and reduce
feed rates while doing the work, according to a filing on the Texas
Commission for Environmental Quality Web site. \"Feed rates into the
unit are being reduced to help minimize emissions during this
maintenance activity,\" the filing said. The filing did not specify how
much the rates would be reduced, and no one from the company was
immediately available to comment.
<http://biz.yahoo.com/rc/040820/energy_refinery_deerpark_shell_1.html>

**Iraq Basrah Loadings Resume After Overnight Halt on Mehdi Attack**

Crude loadings at Iraq\'s Persian Gulf terminals of Basra and Khor
al-Amaya resumed at 735 hours local time (0345 GMT) Friday, after being
halted at 2300 hours Thursday as militants loyal to Shiite cleric
Moqtada Sadr attacked and torched the Basra City headquarters of the
South Oil Co, port and shipping agents said. On resumption of
operations, Basra was loading crude onto export

tankers at a rate of 25,000 bbl/hour and Khor al-Amaya at 15,000
bbl/hour, a shipping company source said. The attack on the SOC office
came a day after Sadr\'s Mehdi Army threatened to torch oil wells in
Iraq. The unrest has pushed oil prices to new historic highs. WTI crude
on NYMEX closed at a record \$48.70/bbl Thursday, and traded as high as
\$48.98/bbl on the after-hours

Access session Friday. Meanwhile, the British military had stepped up
security around key oil infrastructure in Basra, and oil production had
not been affected, AFP quoted a spokeswoman as saying Friday.

<http://www.platts.com/Oil/News/8726513.xml?S=n>

**Iraq Pipeline to Refinery Damaged by Explosion, AFX Says**

An oil pipeline in northern Iraq from Kirkuk to the Baiji refinery was
damaged by an explosion, hurting local oil distribution, AFX news agency
reported, citing Ali Abdullah, a fireman at the state-run Northern Oil
Co. An explosive device placed on the pipeline blew up at 8.30 a.m.
local time, AFX cited him as saying, without giving any further details.

Bloomberg News, 0539 August 20, 2004

**Sadr Militia Still Controls Iraq Shrine \-- Witnesses**

Shi\'ite fighters appeared to be in control of a holy shrine in Najaf on
Friday hours after Iraq\'s interim government said it had overcome a
bloody uprising by seizing the Imam Ali mosque without a shot being
fired. Witnesses in the southern city said Mehdi Army militiamen loyal
to radical cleric Moqtada al-Sadr controlled the narrow alleyways
leading to the mosque, although the firebrand leader\'s whereabouts were
unknown. Police were nowhere to be seen. Police in Najaf told CNN they
did not control the site. Reuters, 1456 August 20, 2004

# 

# Norway Rig Lockout May Close 29,000 B/D Statoil Field 

# Statoil ASA, Norway\'s biggest oil company, may lose oil output at the 29,000 barrel-a-day Glitne field as a lockout of rig workers threatens to close down the ship-based rig that pumps oil from the deposit. The so-called floating production, storage and offloading unit will have to shut down \`\`sometime\'\' after midnight on Sept. 2 should the lockout take effect, Petroleum Geo-Services ASA, the rig\'s owner, said in a statement. Petroleum Geo\'s Petrojarl 1 is the only production unit affected by the lockout.

# Bloomberg News, 0707 August 20, 2004

# 

# Natural Gas

# 

**See Highlights / Major Developments about explosions at Duke storage
facility**

Nothing else to report.

**Other**

Nothing to report.

**Energy Prices**

+-------------------------------+-----------+-----------+------------+
|                               | **Latest  | **Week    | **Year     |
|                               | (8        | Ago**     | Ago**      |
|                               | /20/04)** |           |            |
+-------------------------------+-----------+-----------+------------+
| **CRUDE OIL**                 | 47.60     | 46.58     | 30.96      |
|                               |           |           |            |
| **West Texas Intermediate     |           |           |            |
| US**                          |           |           |            |
|                               |           |           |            |
| \$/Barrel                     |           |           |            |
+-------------------------------+-----------+-----------+------------+
| **NATURAL GAS**               | 5.39      | 5.46      | 5.03       |
|                               |           |           |            |
| **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