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

**Office of Energy Assurance**

**ENERGY ASSURANCE DAILY**

###### May 24, 2004

**Highlights / Major Developments**

**Storms Knock Out Power to Nearly One Million Customers Across Midwest
& East** Storms tore through the Midwest Saturday, May 22 Hundreds of
thousands of customers lost power after the storms. About 265,000
customers in Michigan were still without electricity Saturday evening;
73,000 in Ohio; 44,000 in West Virginia; and 5,000 in Pennsylvania.
Several homes were destroyed in Nebraska, which was pummeled by multiple
tornadoes, heavy rain and hail. Nearly 105,000 customers still had no
electricity Monday in Michigan, down from at least 510,000 that were
blacked out by storms during the weekend. Storms in Ohio early Monday
knocked out power to more than 30,000 homes and businesses, utilities
said. Several schools closed because they had no electricity. More than
6,000 had no power in Indiana. By Sunday at noon, FirstEnergy restored
power to 372,000 customers. Repairs were made at more than 11,000
locations. Service restoration efforts continue for customers of
FirstEnergy electric utility companies who were affected by a series of
storms that moved through northern Ohio and western Pennsylvania on
Friday and early Saturday, May 21 and 22. In total, the storms
interrupted service to some 400,000 FirstEnergy customers. By 10:00 a.m.
Sunday, service had been restored to more than 372,000 customers. Less
than 18,000 Ohio Edison customers remain without power in Akron, Kent,
Youngstown, Salem, Alliance and Warren. Many are expected to be back in
service by tonight \-- particularly in the Akron and Alliance areas \--
with some extending into Monday night or early Tuesday morning.
Approximately 10,000 Illuminating Company customers without power \--
primarily in the Miles, Strongsville and Solon areas \-- are expected to
be back in service by midnight tonight. Approximately 135 line crews and
100 service crews from Ohio Edison and The Illuminating Company are
being assisted by more than 100 crews from other FirstEnergy utility
companies and outside contractors. Approximately 75,000 Ohio Edison
customers were originally without power in Akron, Kent, Youngstown,
Salem, Approximately 65,000 Illuminating Company customers were
originally without power, primarily in the Miles, Strongsville and Solon
areas, are expected to be back in service by Sunday night. Elsewhere,
severe thunderstorms and a possible tornado swept across much of West
Virginia, from the Ohio River to the Virginia border, knocking out
electricity for about 63,500 customers.
<http://apnews.myway.com/article/20040523/D82OAIM00.html>
<http://www.cnn.com/2004/WEATHER/05/24/spring.storms.ap/index.html>

<http://biz.yahoo.com/prnews/040523/nysu019_1.html>

<http://biz.yahoo.com/prnews/040522/nysa011_1.html>
<http://www.cnn.com/2004/WEATHER/05/22/spring.storms.ap/index.html>

**Olympic Petroleum Product Pipeline Remains Closed in Washington State
Due to Fire** Oil stocks rallied in Monday trading after OPEC postponed
a decision to increase production and a U.S. pipeline remained closed
due to fire, fueling fresh fears about gasoline supplies.
<http://biz.yahoo.com/cbsm/040524/e9bc5a26982b4e26999c829d6ba51dfa_2.html>

**Olympic Pipeline Down at Least 2 Days - Company**\
Olympic Pipeline Co. said on Monday its 285,000 barrel-per-day (bpd) oil
products pipeline in the U.S. Northwest will be shut for at least two
more days because of a weekend fire. The pipeline was shut after a fire
on Sunday in a small sample line in near the pipeline\'s control center
in Renton, Washington. The entire pipeline is shut because the sample
line cannot be bypassed. The Olympic pipeline runs in a 299-mile
corridor from Ferndale, Washington, to Portland, Oregon, and connects
several refineries to fuel terminals in Seattle, Tacoma, and Portland.
It is the sole supplier of jet fuel to Seattle-Tacoma International
Airport. The Olympic Pipeline is Western Washington\'s major refined
fuel Transportation arterial, shipping 4.9 billion gallons of fuel a
year. (1998 company figures). Before the pipeline can be restarted, the
pinhole leak believed to have caused the fire must be found and a
determination must be made on the cause of the leak.
<http://www.olympicpipeline.com/neighbor_home.html>
<http://biz.yahoo.com/rc/040524/energy_olympic_pipeline_2.html>

**Shell Closes MARS Oil Platform in Gulf of Mexico After Leak** Shell
Oil Co. shut its U.S. Gulf Mars platform on Saturday after a problem at
a safety valve, the company said on Monday. The outage shut in 150,000
barrels per day of crude oil and 170 million cubic feet of daily gas
production, or all of the platform\'s current production, said Shell
spokesman Fred Palmer. Palmer said the company did not know when the
platform would resume operations. The company detected a \"slight
sheen\" on water near the platform that came from a ball and socket
connector that allows lines to the platform to move with the ocean\'s
currents. The Mars platform, which has a design capacity of about
220,000 bpd of crude and 220 mmcfd of natural gas, is located about 130
miles southeast of New Orleans in the Mississippi Canyon area of the
Gulf of Mexico.
<http://biz.yahoo.com/rm/040524/energy_shell_mars_1.html>

**Electricity**

**See Highlights above concerning power outages.**

**Perry Plant Expected to Return to Service Next Week**\
FirstEnergy Nuclear Operating Company (FENOC) today announced that the
1,260-megawatt Perry Nuclear Power Plant is expected to return to
service next week, following repairs to an emergency service water pump.
The plant was removed from service on Saturday May 22, 2004, after
routine testing indicated that the pump was not maintaining a normal
flow level. An initial inspection found a broken coupling on the pump\'s
shaft, and a complete review is under way. A new pump and new couplings,
made of stronger material, are being installed to help ensure better
reliability. The plant will return to service after the equipment has
been thoroughly tested and the review has been completed.
<http://biz.yahoo.com/prnews/040524/clm067_1.html>
<http://biz.yahoo.com/rc/040524/utilities_firstenergy_perry_3.html>

**FPL\'s Fla. Turkey Point 3 Nuke Cut to 50 Percent Power**\
FPL Group Inc. 693 megawatt Turkey Point 3 nuclear unit in Florida was
cut to 50 percent of capacity by early Monday, the Nuclear Regulatory
Commission said in its power reactor status report. On Friday, the unit
was operating at full power.
<http://biz.yahoo.com/rc/040524/utilities_fpl_turkeypoint_1.html>

**FPL's FLA. Turkey Point 4 Plant Also Undergoing Unplanned
Maintenance**

Turkey Point 4 is down to 90%, reducing power yesterday morning to
investigate an air leak on an instrument line. Bloomberg News, 0914, May
24, 2004

**Dominion Sees Shut Va. Surry 2 Nuke Back Soon**\
Dominion Resources Inc. said Monday its 812 megawatt Surry 2 nuclear
unit in Virginia will likely return to service soon following an
explosion and fire in the transmission switchyard. On Friday, there was
a fault in a transformer in the switchyard that destroyed the
transformer and caused a fire that lasted about 30 minutes, Dominion
spokesman Richard Zeurcher told Reuters. The unit had been operating at
full power at the time of the explosion and fire. Following the
explosion and fire, the company declared an \"unusual event\" which is
the lowest of four levels of emergency classification used by the
Nuclear Regulatory Commission. The company\'s transmission workers have
already completed repairs to the switchyard, Zeurcher said. Following
the shutdown, Dominion discovered a leak in a pipe in the auxiliary
feedwater system. The company was repairing the leak and expected to
return the unit to service when the work is done, Zeurcher said.
<http://biz.yahoo.com/rc/040524/utilities_dominion_surry_3.html>

**PSEG Shut N.J. Salem 2 Nuke Due to Power Failure**\
Public Service Enterprise Group Inc. said Monday it shut the 1,150
megawatt Salem 2 nuclear unit in New Jersey on May 21 due to the failure
of a 230-volt transformer. Chic Cannon, a spokesman for PSEG Nuclear,
which operates the station, told Reuters the company would replace the
transformer. The transformer, which is about half the size of a pickup
truck bed, feeds electricity from the switchyard back into the plant to
power some of the unit\'s equipment. \"We have the new transformer in
place but are waiting until we determine what failed with the old
transformer,\" Cannon said, adding he could not say how long the unit
would likely remain shut. Electricity traders guessed the unit would
likely remain shut for about a week.
<http://biz.yahoo.com/rc/040524/utilities_pseg_salem_3.html>

**Limerick 2 Nuke at Full Power After Maintenance, Company Says**

The limerick 2 nuclear unit is up from 88% following completion of a rod
pattern adjustment.

Bloomberg News, 1235 May 24, 2004

**River Bend Cuts Power for Unplanned Maintenance, Company Says**

Entergy's River Bend 966 nuclear unit reduced power to 90% to perform
unplanned maintenance on a gas pre-heater system. Bloomberg News, 1027
May 24, 2004

**Tacoma, Wash.-Area Utility\'s Megawatts Might Be Blowin\' in Wind
P**uget Sound Energy is looking at several major wind power projects as
it investigates adding 355 megawatts of electrical energy to its system.
[http://powermarketers.netcontentinc.net/newsreader.asp?ppa=8knpp%5EZilorttqVUgc%216C%29bfej%5B%21](http://powermarketers.netcontentinc.net/newsreader.asp?ppa=8knpp^ZilorttqVUgc!6C)bfej%5B!)

####### Petroleum

**See Highlights above concerning Olympic Pipeline Outage in Washington
and Shell's MARS Oil Platform closure in Gulf of Mexico.**

**Gasoline Price at Record \$2.064/Gallon**\
The price keeps going up at the pump for U.S. consumers, as the average
cost for gasoline increased 4.7 cents a gallon over the last week to a
record \$2.064 on Monday, the government said. The highest U.S. gasoline
price was \$2.99 a gallon in March 1981, when adjusted for inflation in
2004 dollars, according to the Energy Department\'s analytical arm.
<http://biz.yahoo.com/rb/040524/energy_gasoline_price_2.html>

**U.S. Summer Gasoline Supply Seen Tight, Vulnerable**

U.S. gasoline stations can keep drivers motoring at the upcoming
Memorial Day holiday, but distributors and retailers say inventory
tightness highlights supply chain vulnerabilities, especially in
California. \"We\'re chronically at the supply/demand fulcrum point
where anything that causes supply interruption, like a refinery or
pipeline problem, jumps the market,\" said Jay McKeeman, executive vice
president at the California Independent Oil Marketers Association. U.S.
gasoline demand in May is already the highest ever for this time of
year, according to the most recent data from the U.S. Energy Information
Administration (EIA), the statistical branch of the Department of
Energy. At the summer peak, demand is typically 6 percent higher than
during the rest of the year, according to the EIA.\
[http://hsweb01.screamingmedia.com/PMA/pma_newsarticle1_reute
rs.htm?SMDOCID=reuters_pma_2004_05_21_eng-reuters_pma_U-S-SU
MMER-GASOLINE-SUPPLY-SEEN-TIGHT-VULNERABLE&SMContentSet=0](http://hsweb01.screamingmedia.com/PMA/pma_newsarticle1_reuters.htm?SMDOCID=reuters_pma_2004_05_21_eng-reuters_pma_U-S-SUMMER-GASOLINE-SUPPLY-SEEN-TIGHT-VULNERABLE&SMContentSet=0)

[**Oil Soars To Record Close As Opec Loses Market
Grip**](http://www.energyintel.com/DocumentDetail.asp?document_id=122635)\
Opec seems to have lost its grip on world oil markets. US crude futures
soared nearly \$2 per barrel on Monday despite vigorous promises by the
world\'s largest producer, Saudi Arabia, to pump at its full capacity of
10.5 million barrels per day if needed to cool off an overheated market.
Energy Intelligence Briefing, 1942 GMT May 24, 2004

**OPEC \'Concerned,\' No Deal Yet on More Oil**\
OPEC Saturday expressed \"deep concern\" about high-flying world oil
prices, saying it wanted to cut fuel costs to support world economic
growth. But the president of the Organization of the Petroleum Exporting
Countries, Purnomo Yusgiantoro, said no decision was made during
informal talks in Amsterdam on raising crude supplies. OPEC will set
policy in Beirut on June 3, he said.
<http://biz.yahoo.com/rb/040522/energy_opec_10.html>

**Murphy Says to Restart Louisiana Crude Unit Tuesday**\
Murphy Oil Corp. said on Monday it expects to restart a 125,000
barrel-per-day (bpd) crude distillation unit at its Meraux, Louisiana,
refinery on Tuesday after it was shut by a fire May 14. A spokeswoman
for the company said repairs were completed and the unit would be
brought back up to roughly 110,000 bpd \-- its normal operating rate
during ongoing construction of a ROSE distillation unit at the plant
this year. \"We won\'t run the crude unit at the full 125,000 barrels
per day until the ROSE unit is done, which will be at the end of the
year,\" she said.
<http://biz.yahoo.com/rc/040524/energy_murphy_refinery_1.html>

**No Sign of Saudi Chartering Spree to Move Extra Oil**\
Top oil exporter Saudi Arabia and its major customers have so far shown
little sign of preparing to ship extra oil in June which Riyadh has
pledged to calm runaway oil prices, brokers and shipping analysts said
on Monday. \"At the end of the day it\'s what is on the water and moving
that counts \-- not rhetoric. So far Saudi chartering has been
insignificant, but there is still time for it to happen just about,\"
one source with a leading ship broking firm said of June bookings.
<http://biz.yahoo.com/rm/040524/energy_saudi_shipments_3.html>

**TEPPCO Partners, L.P. to Build New Refined Products Terminal in
Louisiana**\
TEPPCO Partners, L.P. plans to build a new refined products truck
loading terminal in Bossier City, La. The facility will include six
storage tanks and a fully automated two-bay truck loading rack. The
approximately \$14 million project will add more than 20,000 barrels per
day of refined products delivery capacity to the Northwest Louisiana and
East Texas markets and is scheduled for completion in first quarter
2005. <http://biz.yahoo.com/prnews/040524/clm073_1.html>

#### 

#### Natural Gas 

**Northern Alabama Gas Storage Expansion Planned**\
Houston-Based Multifuels LP is planning a 6-6.5 Bcf expansion of the
East Detroit gas storage field in Lamar County, AL. The company is
holding an open season through June 18 on the proposed Freebird Gas
Storage project. Natural Gas Intelligence, May 24, 2004
[http://powermarketers.netcontentinc.net/newsreader.asp?ppa=8kowu%5DZilpomns%5BUgc%216C%29bfej%5B%21](http://powermarketers.netcontentinc.net/newsreader.asp?ppa=8kowu%5DZilpomns%5BUgc!6C)bfej%5B!)

**Operators Must Begin Integrity Reviews of High-Risk Gas Pipes by June
17**\
All natural gas pipeline operators are required to begin baseline
integrity assessments of the sections of their pipeline systems located
in high-consequence areas by no later than June 17, according to a
Washington, DC-based law firm that specializes in energy law.

Natural Gas Intelligence, May 24, 2004
[http://powermarketers.netcontentinc.net/newsreader.asp?ppa=8kowu%5DZilpomns%5BUgc%216C%29bfej%5B%21](http://powermarketers.netcontentinc.net/newsreader.asp?ppa=8kowu%5DZilpomns%5BUgc!6C)bfej%5B!)

**NYMEX Natgas Ends Up Sharply With Crude, Cash**\
NYMEX natgas futures ended up sharply on Monday, with most months
hitting new contract highs on a strong run up in crude and a firmer cash
market in the face of some warm U.S. weather this week, trade sources
said. June futures (NGM4), which expire on Wednesday, climbed 35.2
cents, or 5.5 percent, to close at \$6.705 per million British thermal
units after hitting \$6.73 late, a new contract high and the highest for
a front month since mid-January. July (NGN4), which also hit a new
benchmark high of \$6.80, settled 35.8 cents higher at \$6.767. Most
other months also set new highs and ended up 0.8 to 34.6 cents though
some 2008-2009 contracts finished down slightly. \"People are looking
for a top around here, but crude moved back toward \$42, and we had the
Shell Mars platform shut, which drove the cash above the screen
temporarily, and we had some nukes down,\" said one Texas-based trader.
He was referring to news that a valve problem near Shell\'s Mars
platform in the Gulf of Mexico forced the shut in of about 170 mmcfd.
The company was not sure when the platform would resume operation. NYMEX
crude surged nearly \$1.80 a barrel on Monday amid concerns that Saudi
Arabia\'s plan to raise output would not be enough to meet demand.
Traders also said news Monday of several unexpected nuclear plant
outages in New Jersey, Ohio and Virginia also helped firm the cash, but
some noted the shut downs were not expected to be lengthy.
<http://biz.yahoo.com/rm/040524/markets_nymex_natgas_5.html>

####### Other

**Pipeline Ablaze Near Kirkuk After Possible Sabotage**\
A pipeline west of Iraq\'s oil hub of Kirkuk was ablaze on Monday,
possibly to due sabotage that has dogged efforts to rebuild Iraq\'s oil
sector, oil company officials said. An official of the Northern Oil
Company said fire crews were attempting to extinguish a blaze on a
pipeline about five km (3.11 miles) west of Kirkuk which broke out at
about 1500 GMT. The export pipeline to Turkey was not affected by the
fire, the official said, speaking on condition of anonymity. Sabotage
has crippled efforts to rehabilitate the northern export pipeline. The
vast majority of Iraq\'s oil exports now go through a southern terminal,
which was itself the target of an attack by sea last month. Iraq had
just resumed pumping Kirkuk oil to Ceyhan after four days of stoppage
when the pipeline was set ablaze.
<http://biz.yahoo.com/rm/040524/energy_kirkuk_fire_1.html>
<http://biz.yahoo.com/rm/040524/energy_iraq_pipeline_1.html>

**Iraq\'s Third-Biggest Refinery Shut as Pipelines Hit**

Iraq\'s third-largest oil refinery was shut down because attacks against
pipelines that supply it with crude, especially from the south, have
intensified during the last month, cutting off flow, the plant\'s
general manager said. \`The sabotage used to be mainly in the north so
we were still able to operate, but now it\'s in the south as well,\'\'
said

Dathar Khashab, general manager of the Daura refinery outside the
capital, Baghdad. Bloomberg News, 1105, May 24, 2004

**Energy Prices**

+-------------------------------+-----------+-----------+------------+
|                               | **Latest  | **Week    | **Year     |
|                               | (5        | Ago**     | Ago**      |
|                               | /24/04)** |           |            |
+-------------------------------+-----------+-----------+------------+
| **CRUDE OIL**                 | 41.95     | 41.55     | 29.74      |
|                               |           |           |            |
| **West Texas Intermediate     |           |           |            |
| US**                          |           |           |            |
|                               |           |           |            |
| \$/Barrel                     |           |           |            |
+-------------------------------+-----------+-----------+------------+
| **NATURAL GAS**               | 6.48      | 6.41      | 5.92       |
|                               |           |           |            |
| **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