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

**Office of Energy Assurance**

**ENERGY ASSURANCE DAILY**

**October 22, 2004**

**Highlights / Major Developments**

**NYMEX crude races to new high amid supply concerns**

December crude futures on the New York Mercantile Exchange settled at an

all-time front-month high of \$55.17/bbl Friday, gaining 70 cts on the
session. <http://www.platts.com/Oil/News/8319779.xml?S=n>

Bloomberg News, 1318 October 22, 2004

**Electricity**

**Petroleum**

**Hurricane Ivan Oil Production Shut-in Statistics** Shut-in oil
production is equivalent to 25.07% of daily production of oil in GOM,
which is approximately 1.7 million BOPD.  The 426,172 barrels per day
that is currently shut-in is approximately 2.16% of the 19.7 million
barrels consumed in the U.S. each day. The cumulative shut-in oil
production for the period 9/11/04-10/22/04 is 23,419,967 bbls, which is
equivalent to 3.871% of the yearly production of oil in the GOM, which
is approximately 605 million barrels.
<http://www.mms.gov/ooc/press/2004/press1022.htm>

[**US Pipelines Take Action To Protect Jet Fuel
Stream**](http://www.energyintel.com/DocumentDetail.asp?document_id=133487)\
The fact that up to 80% of the commercial jet fuel lifted at airports
across the US is delivered via common-carrier pipelines means that any
changes in requirements for other middle distillates can have a huge
impact on the integrity of the jet fuel stream. Airlines can breath more
easily following a decision by Colonial Pipeline not to accept diesel
that contains lubricity additives. That move sets an important
precedent, since the need for additives will become far more pervasive
in 2006. Jet Fuel Intelligence, October 25, 2004

**S. California Pipelines Reopen** Major pipelines serving Phoenix and
Las Vegas were back in operation Friday after a Southern California
storm forced their shutdown Wednesday morning. Kinder Morgan Energy
Partners spokesman Larry Pierce said a 16-inch petroleum products
pipeline to Las Vegas resumed operations Thursday night. A 20-inch line
to Phoenix was running again early Friday morning, he said. The
Associated Press reported Thursday that a freight train was derailed by
the storm near Fontana, Calif., falling on top of the 20-inch line to
Phoenix, while rain runoff eroded the soil surrounding part of the Las
Vegas line. Kinder Morgan Energy supplies all gasoline to Arizona, which
has no refineries, the AP said.
[http://www.marketwatch.com/news/yhoo/story.asp?source=blq/yhoo&siteid=yhoo&dist=yhoo&guid=%7B6FCFE098%2D675B%2D4426%2DA775%2D99E15FCBF738%7D](http://www.marketwatch.com/news/yhoo/story.asp?source=blq/yhoo&siteid=yhoo&dist=yhoo&guid={6FCFE098-675B-4426-A775-99E15FCBF738})

**Natural Gas**

**Hurricane Ivan Gas Production Shut-in Statistics**

Shut-in gas production is equivalent to 12.37% of the daily production
of gas in the GOM, which is approximately 12.3 BCFPD.  The 1,521.58 MMCF
per day that is currently shut-in is approximately 2.53% of the 60.184
BCF consumed in the U.S. each day.** ** The cumulative shut-in gas
production 9/11/04-10/22/04 is 97.154 BCF, which is equivalent to 2.183%
of the yearly production of gas in the GOM, which is approximately 4.45
TCF. <http://www.mms.gov/ooc/press/2004/press1022.htm>

# Mississippi LNG Terminal Proposed

The Port of Pascagoula announced Wednesday that a group of investors
from Houston has an option on land southwest of the Chevron Pascagoula
Refinery to build a liquefied natural gas terminal. However, the company
faces a long, rigorous permitting process before it would be able to
exercise that option and build. Similar proposals for the Gulf and the
Coast have stalled. But announcing the intent is the first step.
[http://powermarketers.netcontentinc.net/newsreader.asp?ppa=8knpp%5EZkljnorpSUgc%23%3A%40%24bfej%5B%21](http://powermarketers.netcontentinc.net/newsreader.asp?ppa=8knpp^ZkljnorpSUgc%23%3A@$bfej%5B!)
Oil Daily, October 22, 2004

**Nigeria LNG Aims to Boost Output 37% to 30 Mln Tons a Year**

Nigeria LNG Ltd. plans to boost annual exports to 30 million tons of
liquefied natural gas by 2010, up from a 22 million-ton target, to meet
demand from the U.S. and Europe, said Andrew Jamieson, the company\'s
managing director.

Bloomberg News, 1107 October 22, 2004

**Other News**

**Gloucester County, N.J., Police, Utilities and Firms to Cooperate on
Security** Citing the high number of potential terrorist targets in
Gloucester County, county prosecutor Sean Dalton announced yesterday
that local law enforcement agencies, private industry and utilities
would work together to improve security. Working under the name the
Gloucester County Security Initiative, local police departments and as
many as 50 representatives of area chemical plants, refineries and other
facilities will meet monthly to discuss how to prevent possible attacks
and how to be prepared in the event of a catastrophe.
[http://powermarketers.netcontentinc.net/newsreader.asp?ppa=8knpp%5EZkliljhqZUgc%23%3A%40%24bfej%5B%21](http://powermarketers.netcontentinc.net/newsreader.asp?ppa=8knpp^ZkliljhqZUgc%23%3A@$bfej%5B!)

**Energy Prices**

+-------------------------------+-----------+-----------+------------+
|                               | **Latest  | **Week    | **Year     |
|                               | (10       | Ago**     | Ago**      |
|                               | /22/04)** |           |            |
+-------------------------------+-----------+-----------+------------+
| **CRUDE OIL**                 | 55.27     | 54.89     |            |
|                               |           |           |            |
| **West Texas Intermediate     |           |           |            |
| US**                          |           |           |            |
|                               |           |           |            |
| \$/Barrel                     |           |           |            |
+-------------------------------+-----------+-----------+------------+
| **NATURAL GAS**               | 7.42      | 5.64      |            |
|                               |           |           |            |
| **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

**13:45 22Oct2004 RTRS-U.S. East spot power eases as spot gas slumps**

On the New York Mercantile Exchange, both oil and natural

gas markets hit record highs on Friday, with November natural

gas futures at a contract high of \$8.15 per mmBtu and the

December crude oil futures at an all-time high of \$55.45 per

barrel.

**AES\'s Calif. Alamitos 3 & 4 power units shut**

Virginia-based global energy company AES Corp.\'s 335-megawatt Alamitos
3 and 4 gas-fired units in California shut by early Friday, the
California Independent System Operator said in a report Friday. Reuters,
1101 October 22, 2004

**PSEG to complete N.Y. Bethlehem power plant in 2005**

New Jersey-based Public Service Enterprise Group Inc.\'s PSEG Power unit
expects to complete its 750-megawatt Bethlehem natural gas-fired power
plant in New York by mid-2005, the company said Thursday. When the new
unit enters service, PSEG will retire the existing 50-year-old 400 MW
Albany oil/gas-fired steam generating station in Bethlehem, New York,
about five miles south of Albany. In addition, PSEG has proposed to
build a \$200 million electric transmission cable from New Jersey to New
York City to supply power to the New York Power Authority. The line
would connect PSEG\'s 1,242 MW Bergen Generating Station in Bergen
County, New Jersey to a Consolidated Edison Inc. substation on West 49th
Street in Manhattan. PSEG Power is also building a 1,200 MW gas-fired
combined-cycle plant at its 775 MW Linden nerating Station in Union
County, New Jersey. When the new unit enters service in midyear 2006,
PSEG will retire two of the station\'s existing oil-fired units built in
the 1950s. Reuters, 1516 October 21, 2004

# Nigeria Ogoni Gives Shell 7-day Ultimatum on Troops

Nigeria\'s Ogoni tribe threatened mass action on Thursday against the
local unit of Royal Dutch Shell if the oil giant failed to withdraw
troops from the area within seven days. Reuters, 0904 October 21, 2004

12:15 22Oct2004 RTRS-U.S. nuclear power plant outages

River Bend Entergy 936 Nuke LA Oct 22 Nov 22

# Exelon Reduces Pa. Peach Bottom 2 Nuke Due to Fuel Problem

Chicago-based Exelon Corp. reduced power at its 1,110-megawatt Peach
Bottom 2 nuclear unit in Pennsylvania to about 60 percent of capacity on
Oct. 21 to investigate some bad fuel in the reactor, a spokesman at the
company said Friday. The spokesman said the fuel was not performing as
designed so the company reduced power to investigate the problem. He
said it was too early to say what the company would do to fix the
problem, but noted there were no immediate plans to reduce reactor power
below the current 60 percent of capacity.

Reuters, 0846 October 22, 2004

# More Nigerian Strikes Still Possible - Union

Another general strike in oil exporter Nigeria is still possible unless
unions achieve a deal with the government over pump prices, a union
leader said on Friday. Reuters, 0904 October 22, 2004

.

10:36 22Oct2004 RTRS-U.S. HEATING OIL FUTURES HIT RECORD \$1.60 A GALLON
ON WINTER SUPPLY FEARS

10:42 22Oct2004 RTRS-NYMEX heating oil hits record high on winter supply
fears

NEW YORK, Oct 22 (Reuters) - NYMEX heating oil futures rose to a record
\$1.60 a gallon Friday morning amid widespread worries over heating fuel
supplies come winter.

At \$1.60 a gallon, November heating oil \<HOX4\> was up 2.05 cents.
Prompt heating oil futures have set records in 20 of the last 23 trading
days, and prices are up almost 69 cents or 75 percent from the start of
the year. Reuters, 1036 October 22, 2004