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

**Office of Energy Assurance**

**ENERGY ASSURANCE DAILY**

**September 1, 2004**

**Electricity**

## Indian Point 2 Nuke Shuts After Valve Malfunction

Entergy Corporation's 970 Megawatt Indian Point 2 nuclear-power plant in
Buchanan, New York is undergoing unplanned maintenance. According to the
company, the plant was manually shut down after midnight following a
feed-water regulator valve malfunction to one of the steam generators.

Bloomberg, September 1, 2004

## Michigan Palisades Nuke Manually Shut Due to Brief Fire

CMS Energy Corp.'s 789-megawatt Palisades 1 nuclear unit in Michigan was
manually shut Tuesday following a brief fire associated with a
condensate pump, the U.S. Nuclear Regulatory Commission said. The fire
was extinguished in less than 10 minutes, and the assistance of the
local fire department was not needed, the NRC report said. There were no
injuries and the cause of the fire was under investigation. The plant is
expected to return to service when the investigation is complete and any
necessary repairs are made. The Palisades station is located in Covert,
Michigan, five miles south of South Haven.

Reuters, September 1, 2004, 1013

**ISO New England Outlines Market Solutions to Secure Long-Term
Reliability**

ISO New England Inc., the operator of the region's bulk power system and
wholesale electricity markets, Tuesday filed with the Federal Energy
Regulatory Commission (FERC) enhancements to an earlier proposal that
will bring about solutions for the region's long-term power supply
needs, called Locational Installed Capacity (Locational ICAP). The
enhancements submitted address FERC's guidance on the development of
this market. Prior to the introduction of wholesale competition in New
England in 1999, utilities were responsible for fulfilling an area's
power supply needs and paid for developing these resources through a
regulated rate-of-return. After the introduction of wholesale
electricity markets in New England, vigorous private investment in
generating resources occurred, with financial risk transferring from
consumers to investors. This change resulted in the addition of more
than 9,300 megawatts to New England\'s power supply since 1999 and
increased competition for short-term sales of wholesale power.

<http://www.energycentral.com/centers/news/daily/article.cfm?aid=5089435>

**Petroleum**

## 

## Koch Industries Had Fire at Corpus Christi, Texas, Refinery

Flint Hills Resources LP, a unit of Koch Industries Inc., had a fire
Tuesday morning at its refinery in Corpus Christi, Texas, an official
with the city's fire department said. A "flash" fire ignited in part of
the refinery around 10:30 a.m. local time, Andy Cardiel, assistant fire
chief for Corpus Christi, said in a phone interview. The fire was
extinguished quickly by the refinery's on-site emergency personnel, he
said. Cardiel didn't know what impact the fire had on the refinery's
operations. The unit is involved with xylene production, and sources say
the incident won't impact refinery operations. The Corpus Christi
refinery has a total processing capacity of 300,000 bpd, according to
the company's Website.

Bloomberg News, September 1, 2004, 1438

**Russian Oil Output Exceeding Highest Forecasts, Interfax Says**

Russian oil production is exceeding the most optimistic forecasts set by
the government in the energy strategy for the period until 2020,
Interfax reported, citing Sergei Oganesyan, head of the country's
Federal Energy Agency. "It would be preferable for oil prices to stay
reasonably high," Oganesyan said at celebrations to mark to the Oil
Workers' Day in Moscow, the news service reported. "I must say that
unreasonably high prices are satisfactory for us as well." Russia, which
this year has pumped more oil than Saudi Arabia, has boosted crude oil
output almost 50 percent since 1998 as soaring international prices
allowed companies to invest billions of dollars in extraction. This
year's production will rise 7.1 percent to 450 million tons (9 million
bpd) of crude oil, Industry and Energy Minister Viktor Khristenko said
last month.

Bloomberg, September 1, 2004

## Iraq Northern Pipeline on Fire, Near Export Route

An oil pipeline was on fire in northern Iraq on Wednesday in the
vicinity of the main export route from the Kirkuk fields to Turkey's
Mediterranean coast, witnesses said. Pumping along the line between
Iraq's giant Kirkuk oilfields and the Turkish Mediterranean port of
Ceyhan had been running at 600,000 bpd. There was no confirmation on
whether the export pipeline was the one that was on fire, or of any
impact on exports. Shipping sources in Turkey said there was as yet no
indication that pipeline flows to the Ceyhan terminal had ceased,
although they added that it could take hours before the impact to be
felt.

Reuters, September 1, 2004, 1245

**Florida And Other SE States See Fuel Supply Prospects Worsen**\
Florida just finished a month that gave motorists a fuel tax holiday,
rolling back 8 cents/gallon in state taxes during August. Thanks to a
confluence of events (including the recent rollback) the state now is
faced with an unintended fuel availability holiday. Shipping lanes for
coastal delivery of fuel from Tampa on the west coast of Florida through
Jacksonville on the northeast coast will be virtually shut down in the
next few days as Hurricane Frances threatens the southeast. Deepwater
terminals in Florida and in places like Savannah, Georgia; Charleston,
S.C.; and even Wilmington, N.C. may see shipments of fuel delayed thanks
to uncertain seas, shipping sources say. Problem: many locations were
already on hand-to-mouth inventories or near tank bottoms as August
ended. Some terminals have seen fuel sales severely curtailed, others
are likely to close, and still others may not get supply replenished
until well after the storm hits this weekend. Sources say that scores of
stations are already out of unleaded regular in some East Coast counties
and predict that much more widespread outages may occur before Friday.\
Oil Price Information Service, September 1, 2004, 1314

# 

# Oil Marches Up \$2 as U.S. Crude Stocks Slide

Oil prices rose more than \$2 a barrel on Wednesday, ending an eight-day
streak of losses, as a U.S. government report showed crude oil stocks
falling to the lowest level in five months. Prices jumped as the U.S.
Energy Information Administration said in a weekly report that crude
stocks dropped 4.2 million barrels last week to 287.1 million barrels,
the lowest level since March. Crude stocks have fallen 18 million
barrels, or six percent, since early July as refineries run above 95
percent of capacity to meet summer vacation driving demand. Gasoline and
distillate fuel stocks both rose, the EIA said. The crude stock draw
reinforced how stretched oil supplies are at a time when demand is
growing at the fastest rate in 24 years.

Bloomberg News, September 1, 2004, 1450

Reuters, September 1, 2004, 1433

<http://biz.yahoo.com/rb/040901/markets_oil_5.html>

##  

## Oil Security, Qaeda Offshoots Worry U.S. in Africa

The United States is urging oil-producing West African states to step up
their defenses against terrorism amid signs that new al Qaeda-linked
groups are emerging across the continent, a top U.S. general said on
Tuesday. General Charles Wald, deputy commander of the United States
European Command (EUCOM), said key producers had not yet done enough to
improve shipping security and protect critical energy infrastructure
such as pipelines and offshore rigs from possible terrorist attacks.
This region, the Gulf of Guinea, now provides around about 15 percent of
U.S. oil supplies and that share is projected by experts to grow.
Worries about security of oil supplies have helped push crude to record
highs recently on world markets.

Reuters, August 31, 2004, 2035

<http://www.reuters.com/newsArticle.jhtml;jsessionid=LNJXQC03AAQH2CRBAELCFEY>?

**Natural Gas**

Nothing to report.

**Other News**

**Powerful Hurricane Edges Closer to Bahamas, Florida**\
Hurricane Frances, a growing menace with 140 mph winds, barreled toward
the Turks and Caicos and Bahamas islands on Wednesday and put millions
of people along Florida\'s heavily populated east coast on alert.
Frances is a Category 4 storm, one step down from the most powerful
hurricane as measured by the five-step Saffir-Simpson Hurricane Scale.
If Frances doesn't weaken at all before reaching Florida, it will be the
first time since 1915 that two hurricanes of that magnitude hit the U.S.
in the same year, according to National Hurricane Center data. The large
and powerful hurricane threatened Florida as the state struggled to
recover from a crushing blow by Hurricane Charley less than three weeks
ago on its west coast. The hurricane center's five-day forecast, which
has a large margin of error, had the storm in the central Bahamas by
early Friday and close to Florida's shore near Palm Beach, about 75
miles north of Miami, by early Saturday.

**Hurricane Tracker:**
<http://www.nhc.noaa.gov/refresh/graphics_astorm6+shtml/012053.shtml>

Bloomberg News, September 1, 2004, 1433

Reuters, September 1, 2004, 1017

<http://www.reuters.com/newsArticle.jhtml?type=domesticNews&storyID=6125141>

## Energy Department Fails to Meet Yucca Mountain Deadline

The opening of the nation's first nuclear waste site could be delayed
again after a government agency ruled Tuesday that the Energy Department
failed to meet a self-imposed deadline about public disclosure of all
pertinent documents. A licensing board at the Nuclear Regulatory
Commission ruled that the Energy Department and the NRC had failed to
post all documents on a public website as required six months ahead of
formally submitting its licensing application to open a nuclear waste
depository at Yucca Mountain, Nev. The department had declared June 30
that it had made public some 1.2 million documents about its plan to
entomb spent nuclear fuel from 39 states at Yucca Mountain. The state,
which opposes the repository, challenged the declaration July 12 - just
three days after a federal court in Washington, D.C., ruled that a
10,000-year EPA radiation safety standard for the project was
insufficient. Energy Department officials have insisted after both
actions that they could press on toward the Dec. 31 deadline.
[www.cbsmarketwatch.com](http://www.cbsmarketwatch.com/).

<http://www.lasvegassun.com/sunbin/stories/text/2004/aug/31/083110191.html>

**Energy Prices**

+-------------------------------+-----------+-----------+------------+
|                               | **Latest  | **Week    | **Year     |
|                               | (         | Ago**     | Ago**      |
|                               | 9/1/04)** |           |            |
+-------------------------------+-----------+-----------+------------+
| **CRUDE OIL**                 | 43.89     | 45.68     | 29.57      |
|                               |           |           |            |
| **West Texas Intermediate     |           |           |            |
| US**                          |           |           |            |
|                               |           |           |            |
| \$/Barrel                     |           |           |            |
+-------------------------------+-----------+-----------+------------+
| **NATURAL GAS**               | 5.02      | 5.23      | 4.62       |
|                               |           |           |            |
| **Henry Hub**                 |           |           |            |
|                               |           |           |            |
| \$/Million Btu                |           |           |            |
+-------------------------------+-----------+-----------+------------+

> Source: Reuters, Wall Street Journal

**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