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

**Office of Energy Assurance**

**ENERGY ASSURANCE DAILY**

**February 4, 2004**

**Electricity**

**APS Shuts Ariz. Palo Verde 1 Nuke to Fix Leak**

February 4, 7:30 am ET NEW YORK (Reuters) - Arizona Public Service shut
its 1,270 megawatt Palo Verde 1 nuclear unit in Arizona after
discovering a reactor coolant system pressure boundary leakage, the
company told the Nuclear Regulatory Commission in an event report on
Wednesday. The company said it identified the leak on Tuesday and was
required by technical specifications to shut the unit within six hours.
The unit was to be in cold shutdown (mode 5) within 36 hours. \"The
leakage was discovered on a high pressure safety injection drain valve.
No automatic or manual reactor protection system or engineered safety
features actuations occurred and none were required. There were no other
component failures, testing or work in progress that contributed to the
leak,\" the company said. On Tuesday, the unit was operating at 99
percent of capacity. The Palo Verde station is located in Wintersburg,
Arizona, about 50 miles west of Phoenix. Pinnacle West Capital Corp.\'s
Arizona Public Service (APS) subsidiary operates the station.
<http://biz.yahoo.com/rm/040204/utilities_pinnaclewest_paloverde_1.html>

**Southeast States Say FERC Trying to Revive Grid Plan**

February 3, 6:36 pm ET, WASHINGTON (Reuters) - Nine Southeast governors
on Tuesday told the Bush administration that they are worried that the
FERC is making a \"backdoor\" attempt to enact controversial power grid
rules even though legislation stalled in the Senate would bar them. FERC
in 2001 proposed its \"standard market design\" which would require
utilities to combine their grids into super-regional networks with
independent operators. Southeast lawmakers inserted language in the
comprehensive energy bill that would bar FERC from pursuing such plans
before 2007. Now, Southeast officials say FERC is trying to revive its
market design proposal through a series of rulings that if finalized
would make it difficult for the region\'s utilities to operate without
joining the regional groups.

<http://biz.yahoo.com/rc/040203/utilities_ferc_1.html>

**Virginia Effort on Power Deregulation Suffers Setback**

Richmond Times-Dispatch, Va. - February 4, 2003 \-- By a 15-6 vote
yesterday, a House of Delegates committee tabled a proposal to suspend
key parts of the 1999 electric deregulation law, including those
allowing retail competition. The proposal and a competing measure
approved by the state Senate on Friday are intended to protect consumers
from deregulation\'s failure to prompt competition among electricity
suppliers. The Senate bill would extend the cap on base electricity
rates through 2010. The Senate measure now goes to the House, where the
sponsor of the tabled legislation has not given up.

**Petroleum**

**BP\'s Fire-Damaged Indiana Crude Down 3-4 Weeks**

10:43 04Feb2004, NEW YORK, Feb 4 (Reuters) - BP \<BP.L\> will do early
maintenance on its crude distillation unit at its Whiting, Indiana,
refinery after a fire forced it shut Feb. 2, sources with knowledge of
the plant said Wednesday. The work will keep the 100,000 barrel-per-day
(bpd) unit and related downstream units out of service for three to four
weeks, the sources said. The 420,000 bpd Whiting refinery is a key
supplier to the Chicago market. BP had originally planned to do work on
the refinery for three to four weeks in March. BP officials declined
comment.

A BP official reported to the Office of Energy Assurance this afternoon
that BP is evaluating whether to move up the maintenance of the unit
affected by the fire. They gave 3-4 weeks as a rough estimate of the
time it would take to get the unit up and running again.

**Fiery Propane Truck Crash Closes Alaska Highway**\
The southern end of the Alaska Highway may be closed for a week because
of a fiery crash involving a propane truck, Royal Canadian Mounted
Police said. Officers said a fireball stretched across the highway and
shot flames 50 feet into the air Monday afternoon after a collision
between a propane tank truck and another vehicle about 50 miles north of
this northeastern British Columbia town. Authorities believe the tanker
contains about 20,000 gallons of liquid propane. \"The danger is if the
actual tank ruptures, all the contents will become one great big bomb,\"
Mossman said. \"It would just make a big crater in the highway, I guess,
and that would be the end of it as far as any danger to the public is
concerned,\" he added. Associated Press, February 4, 2004

**Natural Gas**

**Sable Offshore Project Hit By More Reserve Revisions**\
Tuesday February 3, 2:41 pm ET, NEW YORK (Dow Jones) \-- The Sable
Offshore Energy Project in Eastern Canada have made another in a series
of downward revisions to estimated reserves. Located off the cost of
Nova Scotia, the project currently represents 3% of Canada\'s total
output of natural gas, but has been plagued by more than its share of
production difficulties. Shell Canada, 31.3% owner in the project and a
unit of Royal Dutch/Shell (RD, SC), made its third negative reserve
revision in less than three years to the project last week. Shell\'s
revisions to the Sable project\'s reserves have totaled 690 billion
cubic feet so far, with consecutive revisions of 27% in 2001, 11% in
2002 and 40% last week. This amounts to a cumulative revision of just
over 60%. Pengrowth Energy Trust, an 8.4% partner, Monday made revisions
of its own, roughly in line with Shell\'s. The project was estimated
when production began in December 1999 to contain 3 trillion cubic feet
of recoverable reserves. The field\'s problems may have implications
down the road for the extremely tight natural gas market in New England.
A report by the U.S. Federal Energy Regulatory Commission in December
noted that load factors on gas pipelines feeding New England are likely
to exceed 90% for three months in 2004 and that existing Canadian
imports to the region can only provide adequate supplies through 2005.
The report determined that a combination of LNG and increased production
from sources like the Sable project will have to make up for additional
regional demand beyond that point.

<http://biz.yahoo.com/djus/040203/1441001174_2.html>

**Other News**

**Trinidad Aims to Double LNG Output in 2 years, Eyes US**

12:12 04Feb2004 PORT OF SPAIN, Trinidad, (Reuters) - Trinidad and Tobago
plans to double its production of liquefied natural gas (LNG) in the
next two years, with an eye toward expanding exports to top buyer the
United States. The Atlantic LNG project in Trinidad, which supplied 77
percent of total U.S. LNG imports in 2003, is building a fourth export
plant to liquefy natural gas before it is shipped. This plant, called a
\"train\" in industry parlance, will have capacity of 5.2 million tons
per year. Coupled with a streamlining program at its terminals, Atlantic
LNG aims to raise its export capacity by another 20 percent as the
fourth train is completed. That should nearly double Atlantic LNG\'s
output to around 18 million tons per year by 2006. Current production is
about 9.6 million tons a year through three trains.

**Energy Prices**

+-------------------------------+-----------+-----------+------------+
|                               | **Latest  | **Week    | **Year     |
|                               | (         | Ago**     | Ago**      |
|                               | 2/4/04)** |           |            |
+-------------------------------+-----------+-----------+------------+
| **CRUDE OIL**                 | 33.51     | 34.41     | 33.61      |
|                               |           |           |            |
| **West Texas Intermediate     |           |           |            |
| US**                          |           |           |            |
|                               |           |           |            |
| \$/Barrel                     |           |           |            |
+-------------------------------+-----------+-----------+------------+
| **NATURAL GAS**               | 5.74      | 5.70      | 6.26       |
|                               |           |           |            |
| **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