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

**Office of Energy Assurance**

**ENERGY ASSURANCE DAILY**

###### May 27, 2004

**Electricity**

**Entergy\'s La. River Bend nuke up to 90 pct power**\
Entergy Corp.\'s 936 megawatt River Bend nuclear unit in Louisiana
ramped up to 90 percent of capacity by early Thursday, the Nuclear
Regulatory Commission said in its power reactor status report. On
Wednesday, the unit was reduced to 60 percent of capacity for some
maintenance work. .
<http://biz.yahoo.com/rc/040527/utilities_entergy_riverbend_1.html>

**Con Edison Marks Opening of Electrical Substation at 7 World Trade
Center** Heralding another step in the rebuilding of Ground Zero, Con
Edison Chairman and CEO Eugene R. McGrath joined Governor George E.
Pataki today to mark the return of a fully operational electrical
substation at 7 World Trade Center, which replaces the facility
destroyed during the 9-11 terrorist attacks. The substation, which
converts high voltage power to lower voltage for use in office buildings
and residences, is delivering approximately 40 megawatts to sections of
Lower Manhattan. The substation will also be available to power new
buildings that rise at the Trade Center site.
[http://www.coned.com](http://www.coned.com/)
<http://biz.yahoo.com/prnews/040526/nyw156_1.html>

**Sierra Pacific Starts Up New Transmission Line** Sierra Pacific Power
Company has cranked up a new, 345,000 volt transmission in eastern
Nevada that the company says will improve power reliability in the
region. Company officials say the line will allow the delivery of an
additional 250 megawatts of electricity to northern Nevada and
northeastern California. The transmission line spans 180 miles between
the Gonder substation and the Falcon substation. Officials say it
provides an additional transmission connection near the Nevada-Utah line
to other electric systems in the West to help meet power demands. Sierra
Pacific\'s peak demand for electricity reached a new record of 1,657
megawatts on July 30 last year. Officials believe peak demand this
summer could reach 1,700 megawatts.\
<http://www.krnv.com/Global/story.asp?S=1897083&nav=8faONQqF>

**High US Natgas Prices Stir Nuclear Power Interest**\
Record high natural gas prices have raised concerns that the United
States has placed too big a bet on gas and revived interest in nuclear
power to help meet an explosive growth in electricity demand, industry
experts said. Despite doubts about its safety and security, the experts
said, the nuclear option is back on the table as the nation struggles
with declining gas supplies and looks for ways to meet a projected 50
percent rise in power demand by 2025. \"It was hard to compete with
natural gas at \$2 (per mmBtu), but at \$6 there\'s a renewed interest
in nuclear power,\" said Dan Keuter, vice president at Entergy Corp.\'s
Entergy Nuclear, the No. 2 U.S. nuclear plant operator. Drawn by what
seemed like an abundance of domestic natural gas reserves, cheap
construction costs and a friendly environmental image, power providers
went on a building spree in the late 1990s and added some 200,000
megawatts of new electricity generation, almost all of it fired with
gas. <http://biz.yahoo.com/rc/040527/energy_nuclear_outlook_1.html>

####### 

####### Petroleum

**Shells Halts Sale of Gasoline at 140 Stations in Florida and
Louisiana** Shell said it asked 140 of its Shell and Texaco branded
gasoline stations in New Orleans to halt sales due to a bad batch of
gasoline with excessive levels of sulfur. The gasoline came from the
Motiva refinery in Norco and it was unclear if the company was planning
to shut units to remedy the problem. OPIS Price Watch Alert, 1417 May
27, 2004; Reuters, 1617 May 27, 2004; and Bloomberg News, 1653 May 27,
2004

**Murphy Oil Reopens Meraux, LA Refinery** Murphy Oil has restarted a
125,000 crude unit at its Meraux, Louisiana,\
refinery. The unit was impacted by a fire earlier this month - on May
14th.\
OPIS Price Watch Alert, 1125 May 27, 2004; Reuters, 1210 May 27, 2004

#### Premcor Reduced Rates at its Port Arthur, Texas FCC

Premcor reduced rates on May 24 at it Prot Arthur, TX FCC for repairs on
a plugged absorber tray. The repair should be done by May 31.

Reuters, 1210 May 27, 2994

**OPEC President Sees Three Crude Output Options for Jun 3 Meeting**

OPEC ministers will have three possible options when they meet Jun 3 in
Beirut to consider changing crude output quotas, OPEC\'s Indonesian
president Purnomo Yusgiantoro said Thursday. The first option would be
for the ten OPEC members bound by output quotas to raise their combined
ceiling of 23.5-mil b/d by less than their current over-production. 1.
Members could raise output quotas by 2-mil b/d to 25.5-mil b/d. Given
this, a second option would be for OPEC to continue producing at its
current level without increasing the formal quotas, Purnomo

said, noting that Naimi\'s comments about wanting to see quotas raised
had had little impact on prices. 3) leave a \"psychological impact\" on
the market and on prices by significantly raising output quotas above
current

production levels.

<http://www.platts.com/Oil/News/5576884.xml?S=n>

**Russia Says Only Modest Oil Export Boost in Mid-term**\
Russian oil export capacity has almost reached a ceiling and a modest
medium-term boost is possible only on the Baltic Sea and via use of a
ChevronTexaco pipeline, a government official said on Thursday.
Russia\'s top energy official Viktor Khristenko said he shared the point
of view of pipeline monopoly Transneft that Russian exports and even
domestic supplies were facing the worst bottleneck ever due to booming
output. <http://biz.yahoo.com/rm/040527/energy_russia_shipments_2.html>

**Nigeria Has Capacity to Pump 300,000 BPD Extra**\
Multinational oil companies operating in Nigeria have enough spare
capacity to pump an extra 300,000 barrels per day (bpd) immediately if
the government lifts OPEC quota curbs, a senior industry source said on
Thursday. Africa's top oil producer has held back some supply to the
world market since March because of a fall in its OPEC quota, which has
left some slack in the system, the source said. \"If we were asked to
produce it we would be delighted. We could do it immediately if there
were no storage and shipping constraints,\" said a senior oil executive
in Nigeria.
<http://biz.yahoo.com/rm/040527/energy_nigeria_capacity_1.html>

#### Natural Gas 

**US EPA Issues Air, Water Permits for Port Pelican LNG Project**

The US Environmental Protection Agency has issued air and water permits
for ChevronTexaco\'s proposed 1.6 Bcf/d LNG receiving and regasification
terminal to be located some 40 miles off the Louisiana coast in the Gulf
of Mexico. Port Pelican will consist of an LNG ship receiving terminal,
LNG storage and regasification facilities, and pipeline interconnections
to existing offshore infrastructure to deliver natural gas into the US
interstate gas pipeline network via Henry Hub in Louisiana.
[http://www.platts.com/Natural%20Gas/News/4298762.xml?S=n](http://www.platts.com/Natural Gas/News/4298762.xml?S=n)

**Florida Gas Issues Overage Alert Due to Heat**\
Florida Gas Transmission said Thursday it issued an overage alert day
due to rising temperatures in the state. Alerts, also called critical
days, require natural gas shippers to carefully adhere to scheduled
quantities to maintain system integrity. An overage alert day signals
that taking excess quantities offline would be harmful.
<http://biz.yahoo.com/rc/040527/energy_floridagas_alert_1.html>

**SCE&G Opens Natural-Gas Pipeline Link to Santee, S.C** SCE&G has
completed construction of a 17-mile, six-inch steel, high-pressure
natural gas pipeline from Holly Hill to serve Santee. Construction of
the gas distribution system inside the town is now being completed.
According to Santee Mayor Silas Seabrooks, \"The town of Santee has
reached another milestone in its infrastructure development. We have
water, sewer, the railroad and now gas. The availability of natural gas
is an important benefit to our citizens and businesses and should
attract additional businesses, jobs and investment well into the 21st
century.\" The Times and Democrat, Orangeburg, S.C. Knight
Ridder/Tribune Business News - May 26
<http://pro.energycentral.com/professional/news/gas/news_article.cfm?id=4885729>

####### Other

**Coal Supplies in a Pinch?** A tight coal market is making the
nation\'s most abundant fuel an increasingly expensive one to fall back
on as spot prices have been rising since September of last year. In this
high gas price environment, that could mean a squeeze for electricity
prices this summer. Utilities over the last year have been relying
increasingly on their coal generators when possible, but after the
winter heating season they usually replenish their coal stockpiles
before summer. But because coal prices have also been high some plant
owners kept waiting for prices to ease up low stockpiles at some power
plants are causing some concern in the industry as the air-conditioning
season approaches. \"The U.S. supply/demand balance for coal is very
fragile,\" the head of the world\'s largest coal company, Peabody
Energy\'s Irl Engelhardt, said during his company\'s quarterly
conference call last month. \"We believe U.S. coal stockpiles are at
such low levels that reliability may be an issue at some plants.\"
Although power plants are currently averaging around a 45-day supply of
coal, compared to average stockpiles of 60 to 90 days in the 1990s
current levels are not alarming and according to National Mining
Association spokesman Luke Popovich fall within the \'band of normal,"
Nonetheless, while regulated utilities, for the most part, have been
able to replenish their stockpiles, independent power producers who
aren\'t guaranteed a return on their costs have been keeping fuel
inventories low and waiting for lower coal prices to restock. According
to Stephen Doyle of Doyle Trading Consultants, they now find themselves
in a situation where supplier disruptions, abnormally high demand and
clogged railways combine to keep prices high. Some of these plants have
less than a 20-day coal supply and many are in the low 20\'s, Doyle
said. Now they\'re doing everything they can to ration their supplies
until summer when they can get higher returns on the electricity they
produce

\[Ben Gilbert*\]* Energy Prospects, Issue 40, May 25, 2004

<http://pro.energycentral.com/professional/news/gas/news_article.cfm?id=488693>

**Energy Prices**

+-------------------------------+-----------+-----------+------------+
|                               | **Latest  | **Week    | **Year     |
|                               | (5        | Ago**     | Ago**      |
|                               | /27/04)** |           |            |
+-------------------------------+-----------+-----------+------------+
| **CRUDE OIL**                 | 39.25     | 41.63     | 29.24      |
|                               |           |           |            |
| **West Texas Intermediate     |           |           |            |
| US**                          |           |           |            |
|                               |           |           |            |
| \$/Barrel                     |           |           |            |
+-------------------------------+-----------+-----------+------------+
| **NATURAL GAS**               | 6.51      | 6.18      | 5.84       |
|                               |           |           |            |
| **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