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

**Office of Energy Assurance**

**ENERGY ASSURANCE DAILY**

###### March 18, 2004

**Electricity**

**El Paso Electric Substation Fire Cuts Power in El Paso, Texas
Yesterday** A fire in an El Paso Electric Co. substation in the Lower
Valley knocked out power to some parts of El Paso, Texas Wednesday
afternoon and forced police to man busy intersections for about an hour.
Electric officials said the fire was caused by equipment failure at the
Copper Substation. They have ruled out foul play. Neighbors and workers
near the substation heard a loud explosion at about 1:30 p.m. Soon
after, lights flickered and the power went off around the city. Power
for most of the city was restored 40 minutes after the explosion, El
Paso Electric officials said.
<http://www.borderlandnews.com/stories/borderland/20040318-94690.shtml>

**Millstone 2 Nuclear Plant at 70% of Capacity, Company Says**

The Millstone 2 nuclear-power plant increased electricity production to
70%, according to Dominion Resources. Unit 2 is increasing power
following repairs to a feed-water pump.

Bloomberg, March 18, 2004

**Exelon Upgrades Chicago Power Plant to Increase Grid Stability**

Exelon Power, a unit of Exelon Corporation, recently completed upgrades
to its Southeast Chicago Energy

Project to provide increased stability to the regional power system in
the event of a regional power failure. The company upgraded the
blackstart capabilities of its eight-unit, 350-megawatt (MW) plant to
assist in restarting Exelon's larger nuclear units and other regional
fossil plants in the event of a blackout similar to the one that
affected the Northeast in August 2003. A blackstart unit is defined as a
generating unit that is able to start without an outside electricity
supply or demonstrated ability of a base unit to remain operating, at
reduced levels, when automatically disconnected from the energy grid. A
blackstart plant is a power plant that includes one or more blackstart
units. "This blackstart upgrade allows us to ensure we have the required
energy to be a reliable source of power should a major system blackout
occur," said Mark Schiavoni, vice president of Exelon Power Operations.
Exelon distributes electricity to approximately 5 million customers in
Illinois and Pennsylvania and gas to more than 440,000 customers in the
Philadelphia area.

PRNewswire, March 18, 2004

**Petroleum**

**BP Cuts Runs at Whiting, Indiana, Refinery** BP Plc reduced runs at
its 410,000 bpd refinery in Whiting, Indiana, after a problem with a
unit that makes high octane gasoline, according to a source close to the
refinery. "The problem was in a ultraformer, which converts naphtha into
high-octane gasoline," said the source. Catalytic reforming charge
capacity at the Whiting plant is rated at around 85,500 b/d according to
Pennwell\'s Oil and Gas Journal. The source could not say by how much
runs had been reduced, or how long it would take to repair the
ultraformer. <http://biz.yahoo.com/djus/040318/1401001006_1.html>

## 

## Propane Gas Explosions in Dade County Florida

At 9:30AM, March 17, 2004 numerous explosions took place at a propane
gas warehouse in the City of Doral, Dade County Florida. Thirty-seven
units responded as the fire apparently spread to fuel trucks, which
exploded into flames, and an air rescue helicopter was dispatched to
help by dropping water from the air. It is reported that the fire
started among stored cylinders of acetylene used by welders. It is not a
toxic gas. Florida Division of Emergency Management, State Warning Point
reports that traffic has been diverted within a ¾ mile radius of the
area. Approximately 100 businesses have been affected and 500 people
evacuated from the businesses. Others are sheltering in place. Fire and
Rescue are on the scene however the fire is still too hot to begin to
try to contain. No injuries have been reported.

DHS/FEMA RIV Incident Report, March 17, 2004

# 

**OPEC Countries Likely to Meet Ship-Security Deadline**

OPEC oil producers, will probably meet a July 1 deadline to implement
mandatory anti-terrorist measures, the International Maritime
Organization said. The IMO, the United Nations' shipping agency,
introduced a security code in December 2002 aimed at helping ship
owners, ports and governments to protect against terrorist acts
following al-Qaeda's Sept. 11, 2001, attacks on the U.S. "Judging by the
security seminars held in these countries, we feel that there will be a
high level of compliance," Harmut Hesse, the IMO's deputy director of
security, said in a telephone interview from London. OPEC's 11 members,
including Saudi Arabia, the world's largest exporter, must adopt the
International Ship and Port Facility Security Code or face a possible
disruption to their exports. The Strait of Hormuz in the Persian Gulf is
the only sea route where oil exports from five OPEC members are shipped
to world markets. "Saudi Arabia and Iran already have high levels of
security in place anyway," Hesse said. Indonesia is also showing that it
is taking action to meet the code, he said.

Bloomberg, March 18, 2004

**N.Y. Oil Falls After Reaching 13-Year High on Gasoline Supplies**

Crude oil in New York fell after concern over falling gasoline supplies
sent prices above \$38 a barrel for the first time in 13 years. "We rose
too far too fast yesterday," said Carl Larry, vice president of global
energy sales for ABN Amro Inc. in New York. "We're seeing a little
selling as a safety precaution. If

OPEC or the U.S. government makes a statement it would send prices down
\$1 in a blink." Prices exceeded \$38 for the first time since the
1990-91 Persian Gulf War after the Energy Department said gasoline
supplies fell 800,000 barrels to 199.6 million last week. Prices have
also risen because of OPEC\'s agreement to cut output quotas and because
the U.S. is filling its strategic reserve instead of selling oil on the
market, analysts said.

Bloomberg, March 18, 2004

#### 

#### 

#### 

#### 

#### Natural Gas 

**U.S. LNG Terminals Prepare for New Maritime Anti-Terrorist Laws**

U.S. liquefied natural gas (LNG) terminals report they fully expect to
be in compliance with the stiffer maritime terrorist deterrence rules
that are due to take effect in July, reducing the threat of disruptions
to imports next summer. On July 1, regulations under the Maritime
Transportation Security Act of 2002 (MTSA) will be implemented, along
with the first-ever multilateral code for ships and ports that engage in
international trade, called the International Ship and Port Security
(ISPS) code. The tougher initiatives build on the protections that the
U.S. took to guard its coasts in the wake of Sept. 11, 2001, and give
the U.S. Coast Guard the authority to turn away foreign-flagged LNG
tankers and other ships from U.S. ports that don't comply with the MTSA
security regulations and the ISPS code. LNG tankers, as well as offshore
oil and gas platforms, will be among those sectors of the maritime
industry "most directly impacted" by the new measures, according to the
federal government.

NGI's Daily Gas Price Index, March 18, 2004

**UPDATE \-- Crews Bring Well Blowout in New Mexico under Control**

The well blowout in Carlsbad, NM, last Thursday, which reportedly spewed
natural gas at a rate of more than 2 MMcf/minute at its peak, has been
pretty much brought under control, said an official who assisted in the
well-control effort. The situation is now a "controlled blowout" where
gas is being flowed over a diversion line to a burn pit for flaring,
said David Thompson, senior well control specialist for Houston,
TX-based Cudd Pressure Control. He said crews expected to begin rigging
a snubbing unit either Wednesday or Thursday, allowing them to run pipe
to the bottom of the well to circulate mud and effectively kill the
well. Up to 1,500 residents were evacuated last Thursday when drillers
hit a high-pressure pocket of natural gas that caused the well to blow
out behind a fire department substation in the city. The owner of the
drilling rig is Chi Energy of Midland, TX.

NGI's Daily Gas Price Index, March 18, 2004

**Calpine Withdraws Plans For LNG Project In Eureka, Calif.**

Calpine Corp. Thursday said it has withdrawn plans for a \$1 billion
liquefied natural gas terminal in Eureka, Calif., after encountering
local opposition to the project. "Based on feedback from the local
community and public officials, we believe this decision is best for all
parties," Calpine said in a press release. Environmentalists, fishermen
and numerous Eureka residents, fearing the possibility of a deadly
explosion and ecological catastrophe, had been trying to block the
project, the San Francisco Chronicle reported earlier this week. Calpine
said Thursday that it seeks a clear majority of support for proposed
projects. The facility would have been the first liquid natural gas
receiving station in northern California and was to supply 1 billion
cubic feet of the 6 billion cubic feet of natural gas consumed each day
in the state, according to the Chronicle.

Dow Jones Business News, March 18, 2004, 1:45 am ET

<http://biz.yahoo.com/djus/040318/0145000058_1.html>

####### Other

Nothing to report.

**Energy Prices**

+-------------------------------+-----------+-----------+------------+
|                               | **Latest  | **Week    | **Year     |
|                               | (3        | Ago**     | Ago**      |
|                               | /18/04)** |           |            |
+-------------------------------+-----------+-----------+------------+
| **CRUDE OIL**                 | 37.81     | 37.15     | 31.55      |
|                               |           |           |            |
| **West Texas Intermediate     |           |           |            |
| US**                          |           |           |            |
|                               |           |           |            |
| \$/Barrel                     |           |           |            |
+-------------------------------+-----------+-----------+------------+
| **NATURAL GAS**               | 5.63      | 5.33      | 5.13       |
|                               |           |           |            |
| **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