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

**Office of Energy Assurance**

**ENERGY ASSURANCE DAILY**

**January 27, 2004**

**Highlights / Major Developments**

**Utilities Restoring Power in Southeast US, About 250,000 Lose Power**\
Utilities in the U.S. Southeast on Tuesday were restoring electricity to
about 250,000 customers left without power after an ice storm on Monday
downed trees and power lines. SCANA Corp. (subsidiary South Carolina
Electric and Gas) said about 150,000 of its customers in South Carolina
were still without power at midday on Tuesday. Most of the outages were
concentrated near Columbia, said Mary Green Brown, a spokeswoman for
SCE&G, which has about 567,000 customers in central and southern South
Carolina. The company had no estimate as to when all of the customers
would have power returned. Progress Energy Inc. Tuesday said crews were
restoring electricity to its 83,000 customers left without power after
an ice storm hit on Monday. Progress Energy, which distributes
electricity to 1.3 million customers in North and South Carolina, said
there were about 20,000 customers without service in North Carolina and
about 63,000 out in South Carolina. \"We anticipate the worst of the
storm is over,\" a spokeswoman said. North Carolina's electric
cooperatives had 15,800 outages as of this morning in the southeastern
part of the state. Elsewhere in the Carolinas, Duke Energy Corp., which
distributes power to 2 million customers in North and South Carolina,
said it had fewer than 8,000 homes and businesses without service. In
Virginia, Dominion Resources Inc. reported less than 100 customers out
of 2.1 million were left in the dark Monday night due to the icing.

<http://biz.yahoo.com/rc/040127/utilities_progressenergy_storm_2.html>

<http://biz.yahoo.com/rc/040127/utilities_progressenergy_storm_1.html>

<http://www.newscom.com/cgi-bin/prnh/20020923/CHM008LOGO-c> )

<http://biz.yahoo.com/prnews/040126/clm090_1.html>

<http://www.platts.com/stories/electricpower1.html>

[http://www.ncemcs.com](http://www.ncemcs.com/)

**Electricity**

**South Texas I Nuke Back at 48 Percent Power**

The 1,250 MW South Texas 1 nuclear unit in Texas was at 48 percent power
early Tuesday after exiting a brief outage. The unit had been at 7
percent power following an automatic reactor trip due to high steam
generator levels.

Reuters 1237 January 2004

**Sequoyah 2 Nuke Back at Full Power by Early Tuesday**

TVA's 1,148 MW Sequoyah 2 nuclear unit in Tennessee was back at full
power early Tuesday up from 36 percent on Monday. The unit was shut on
January 15due to a leak on the nonnuclear side of the plant. Reuters,
1237 January 27, 2004

**Electric Reliability Council of Texas Issues Transmission Alert**

The Electric Reliability Council of Texas issued a transmission alert
early Tuesday due to problems on the 138 kV Falcon/Lopeno transmission
line. Reuters 1237, January 27, 2004

**Columbia Generating Station in Washington Down to 60 Percent Power**

The 1,158 MW Columbia Generating Station nuclear plant in Washington was
holding around 60 percent power early Tuesday. Output was reduced over
the weekend while a condenser tube leak was repaired. It is expected to
start ramping up to full power later today.

Reuters, 1341 January 27, 2004

**Calvert Cliffs 2 Nuke to Resume Full Power Later Today**

A loose fuse in the control cabinet of the No. 1 steam generator feed
pump caused the plant to auto-shut down Friday evening. Repairs were
completed on Sunday evening. Bloomberg News, 1434 January 26, 2004

**Power blackouts likely again in U.S.**

Two groups of researchers have independently brought forward evidence of
intrinsic weaknesses in the North American power grid. They both
conclude that blackouts, such as that in New York last summer, are
likely to happen again. John Kappenman, from a small scientific company
in California, last week told the American Meteorological Society in
Seattle, WA, that geomagnetic storms could cause larger blackouts. The
Sun ejects streams of charged particles that can warp the Earth\'s
magnetic field, producing atmospheric effects such as the aurora
borealis and inducing direct current in transformers. This causes
electrical surges, because the grid is meant to take only alternating
current. Separately, Réka Albert of Pennsylvania State University
modeled the network, in part to work out why the system failed. The
exact cause of the breakdown has not been pinned down, but they conclude
that the grid is a so-called \"exponential network\" which mostly
functions without giant hubs to connect large sections. If transmission
substations that bear the highest loads are the first to break down,
failure of 4% of them leads to the break-up of about 60% of the network,
they report on a physics Website.\
[http://www.guardian.co.uk/life/dispatch/story/0,12978,112812
1,00.html](http://www.guardian.co.uk/life/dispatch/story/0,12978,1128121,00.html)

**Petroleum**

**Propane Line Explodes in Harpersfield, NY\
**An underground propane pipeline, owned by TEPPCO Partners in Houston
exploded in Delaware County, NY, forcing the evacuation of more than
2-dozen people. The propane gas line exploded around 7:15 Sunday night
in Harpersfield. The fireball lit up the sky and the flames could be
seen for miles. One house was destroyed. The fire was under control but
the flames continued to roar into the afternoon today. Crews were still
burning off the liquefied petroleum gas Monday in a \"controlled flare\"
aimed at emptying an isolated section of the underground pipeline, said
Kathleen Sauve, a spokeswoman TEPPCO Partners. Nelson Delameter from the
Emergency services says, \"The electric company is working to restore
power in the area. The gas is still bleeding off the line so we still do
have a fire on site.\" Ten homes within a half mile of Quaker Hill Road
and Parker Schoolhouse Road in the Town of Harpersfield remain
evacuated. It could take up to 18 hours for the fire to burn off, after
that the pipeline company will be able to determine what repairs need to
be made. The propane gas it runs from the Gulf of Texas to the
Northeast. A 17-mile section of pipeline is now shut down and isolated.
Nelson Delameter says, \"According to TEPPCO, the interruption in
service would mean that transport trucks would have to go longer
distances to actually get their loads.\" .

<http://www.wbng.com/data/web_5045.shtml>

<http://www.newsday.com/news/local/wire/ny-bc-ny-brf--fireevacuatio0126jan26,0,3907104.story?coll=ny-ap-regional-wire>

The Department of Energy's Office of Energy Assurance had reported that
TEPPCO officials have said that the fire was extinguished this afternoon
and inspections would begin tomorrow

**Valero Texas City Coker Back On Line**\
A delayed coking unit shut on Monday at Valero Energy Corp.\'s 243,000
bpd refinery in Texas City, TX was back in service after being down
about two hours, the company said on Tuesday. The delayed coking unit,
which collects solid carbon residue from the refining process, was shut
down Monday to repair a leak, said Valero spokeswoman Mary Rose Brown.
The shutdown had \"virtually no impact on production,\" Brown said in a
statement.

<http://biz.yahoo.com/rc/040127/energy_valero_texascity_3.html>

Bloomberg News, 1238 January 27, 2004

**Gasoline Prices Rise for Fourth Week, Highest Since September 2003**

According to EIA's national retail gasoline price survey data released
on Monday, the weekly average price of gasoline increased by 2.7 cents
per gallon last week to an average of \$162.2. Reuters 1648 January 26,
2004

**Venezuela\'s PDVSA Says it Continues to Export Gasoline**\
Petroleos de Venezuela (PDVSA), the Venezuelan state oil firm, said on
Tuesday it was still exporting gasoline and that reports of a stoppage
of shipments were false. "What they are saying is false,\" said a PDVSA
official who asked not to be named. On Tuesday, William Greehey, the
Chief executive of U.S. refiner Valero Energy Corp.
(NYSE:[VLO](http://finance.yahoo.com/q?s=vlo) -
[News](http://finance.yahoo.com/q/h?s=vlo)) said PDVSA had stopped
exports of gasoline to fill up domestic reserves \"in anticipation of
political unrest.\"
<http://biz.yahoo.com/rc/040127/energy_venezuela_pdvsa_1.html>

**EPA Says Re-Evaluating New York\'s Request for Oxygenate Waiver**

The U.S. EPA is re-evaluating a request by New York State to opt out of
the federal reformulated gasoline program so that it would no longer
have to use an oxygenate in its reformulated gasoline, a spokeswoman in
the EPA\'s New York regional office said Monday. EPA has no deadline to
make a decision and no timeline was available, she said. New York\'s
Department of Environmental Conservation last winter requested a waiver,
as of Jan 1, 2004, from the Clean Air Act requirement that reformulated
gasoline sold in the New York City area contain an oxygenate. New York
was seeking the waiver because it planned to ban the oxygenate MTBE as
of that date due to MTBE\'s threat to water supplies, and was concerned
about the impact on air quality of ethanol, the only readily available
replacement for MTBE. The EPA in April responded to the state, saying
its application was incomplete because \"it didn\'t prove and justify
the environmental benefits\" that would be realized under its
alternative non-oxygenate plan, the spokeswoman said.

<http://www.platts.com/stories/oil5.html>

**Natural Gas**

**Bush Moves to Open Some Federal Lands to Gas Drilling**\
Talk of energy independence should involve more than rhetoric. That\'s
the thinking behind a Bush administration initiative to open millions of
acres in the northwest corner of Alaska to oil and natural gas drilling.
Of the 8.8 million acres, no drilling will be allowed on 1.6 million
acres as well as certain coastal areas. With demand for natural gas
expected to grow exponentially over the next 20 years in the United
States, producers say that they can meet that need if they have access
to more federal lands that are now off limits. But entrepreneurs are
deterred by the high cost of drilling and the risk of depleted
wellheads, as well as by government policy that denies drilling in many
public areas. The administration\'s announcement last week is not just a
nod of support to producers but also a reaffirmation that natural gas
will remain the\
"fuel of choice" for electric generation. Altogether, the National
Petroleum Reserve that Bush just opened is 23 million acres, or about
the size of Indiana. It\'s located adjacent to the Arctic National
Wildlife Refuge, which has become one of the hot button issues tied
specifically to recent energy bills and generally to energy
independence. Unlike that refuge, the petroleum reserve was established
in 1923 and has been\
explored, although infrequently. The Clinton administration opened about
4 million acres---a move that the environmental community opposed
because of scarce natural wildlife, an argument that is still relevant.\
[http://powermarketers.netcontentinc.net/newsreader.asp?ppa=8kowu%5DZgotrorqSUlh%7D38%7Dbfej%5Bv](http://powermarketers.netcontentinc.net/newsreader.asp?ppa=8kowu%5DZgotrorqSUlh}38}bfej%5Bv)

**Duke Algonquin Pipeline Sets Limits After Equipment Failure**

Duke Energy said natural gas shippers along its Algonquin line will be
fined if they exceed their scheduled delivery volumes after a compressor
unit failed on Sunday. The compressor unit was repaired and returned to
service yesterday, but the restrictions stayed in place to compensate
for its down time and due to the frigid weather.

Bloomberg News, 1334, January 26, 2004

**Other News\
**

**Stopping an Al Qaeda Attack In the Malacca Straits**

If the shippers who use the Malacca Straits think they have a big
problem with piracy now, wait till they see what experts say may be in
store for the straits and the other troubled-but-critical shipping lanes
off the coast of Indonesia. Lloyd\'s List International, the
International Maritime Bureau, the Organisation for Economic
Co-operation and Development, Aegis Defense Services and a host of other
maritime and security organizations have begun to warn that al Qaeda and
its local Southeast Asian affiliates may be planning attacks that would
render the Bali bombings of October 2002 \-- al Qaeda\'s biggest attack
since Sept. 11 in the United States \-- small potatoes. Sadly, the
Indonesian government appears to be reacting in the same way it did when
intelligence sources warned of the Bali bombings \-- by ignoring or
belittling the information. Other governments in the area have also
failed to register the alarm that would seem appropriate to this threat.
Despite the fact that 50,000 ships and half the world\'s crude oil
travel through the straits each year, efforts to protect the vessels
have proven sporadic and ineffective. Attacks in the straits \-- which
narrow to 1.5 miles wide at some points \-- account for more than half
the piracy in the world. And experts with the International Chamber of
Commerce, which tracks piracy, expect more than 400 such attacks
world-wide this year, which means at least 200 in the straits. Some
experts suspect that terrorists are being trained to capture a ship,
pilot it into a port or chokepoint and detonate it. There has been a
spate of temporary ship hijackings that may be training exercises for
terrorists. For example, pirates recently hijacked a chemical tanker off
Sumatra and practiced piloting the vessel for more than an hour. Abu
Sayyaf, an al Qaeda-linked Philippine terrorist group, kidnapped a
marine maintenance engineer and forced him to give them diving
instructions. And videotapes captured from al Qaeda in Afghanistan in
2002 turned out to be surveillance films of Malaysian police patrol
craft. Reports of missing tugboats aggravate fears of terrorist suicide
runs into Southeast Asian ports.

By DANA DILLON and LUCIA SELVAGGI

Wall Street Journal, January 27, 2004

**Parts of Toronto Blacked Out as Station Loses Power**

Parts of downtown Toronto lost power after the electricity supply to a
substation failed. The main 115 kV line was down for maintenance and the
backup line failed at 11 AM today.

Bloomberg News, 1154 January 27, 2004

**Energy Prices**

+-------------------------------+-----------+-----------+------------+
|                               | **Latest  | **Week    | **Year     |
|                               | (1        | Ago**     | Ago**      |
|                               | /27/04)** |           |            |
+-------------------------------+-----------+-----------+------------+
| **CRUDE OIL**                 | 34.00     | 36.21     | 32.43      |
|                               |           |           |            |
| **West Texas Intermediate     |           |           |            |
| US**                          |           |           |            |
|                               |           |           |            |
| \$/Barrel                     |           |           |            |
+-------------------------------+-----------+-----------+------------+
| **NATURAL GAS**               | 5.87      | 6.15      | 5.91       |
|                               |           |           |            |
| **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)

Last Updated on January 22, 2004

**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)

Last Updated on January 22, 2004

**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)

Last Updated on January 22, 2004