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

**Office of Energy Assurance**

**ENERGY ASSURANCE DAILY**

###### April 21, 2004

**Electricity**

#### 

**More than 12,000 Houses Lose Power in Illinois Tornadoes**

After the storm struck at 6 p.m. CDT on Tuesday, "A major portion of the
downtown was either damaged or destroyed," LaSalle County Sheriff Tom
Templeton said. Damage was also heavy in parts of Joliet, southwest of
Chicago. More than 12,000 houses were left without power. There were
more than 40 tornado sightings on Tuesday in Illinois, Indiana and
Oklahoma, according to cable TV\'s Weather Channel.
<http://biz.yahoo.com/rm/040420/weather_tornadoes_1.html>

#### Pinnacle West Power Plant in New Mexico Returning to Service

#### **Pinnacle West Capital Corp.\'s 740-megawatt Four Corners Unit 4 power plant in New Mexico is returning to service following repairs to a boiler tube leak. The coal-fired unit, shut for more than a week, was reconnected to the grid last night and is operating at about 50 percent capacity, said a spokeswoman for Pinnacle West subsidiary Arizona Public Service Co., the plant operator. She could not estimate when the unit, which can power about 600,000 typical U.S. homes, would return to full service. The 170-megawatt Unit 2 at Four Corners will remain out of service for \`\`several more weeks,\'\' she said. Unit 2 was shut for spring maintenance about 10 days ago. She would not specify when either plant was shut. No other plants at the five-unit, 2,040-megawatt power station are out of service or about to undergo maintenance. The plant is located in Fruitland in northwest New Mexico. Bloomberg News, 1219 April 21, 2004** 

#### 

#### U.S. West Power Prices Rise Amid Declining Hydroelectric Output

Wholesale electricity prices in the U.S. West rose as declining river
flows and measures to protect baby salmon reduced hydroelectric output.
Water flowing through the Grand Coulee dam on the Columbia River in
Washington averaged 116,000 cubic feet per second yesterday, down from
127,000 the previous day. Grand Coulee is the largest U.S. hydroelectric
dam, generating as much as 6,494 megawatts, or enough to supply about 5
million homes. Wholesale electricity at Mid-Columbia, a series of dams
in the Northwest and a benchmark for the region\'s prices, rose \$3.16,
or 7.9 percent, to \$43.39 a megawatt-hour, according to Bloomberg data.
The price has decreased 13 percent so far this year.

Bloomberg News, 1235 April 21, 2004

**Entergy\'s White Bluff in SERC tripped late Tuesday**

The plant has since recovered and is running near previous levels early
Wednesday.

Genscape Overnight Update, April 21, 2004

####### 

####### Petroleum

#### Update - Valero Louisiana Refinery Unit Shut by Power Failure

Valero Energy Corp., the third-largest U.S. oil refiner, had a
gasoline-producing unit at its Krotz Springs, Louisiana, refinery shut
yesterday following a power failure, state regulators said. The power
loss, around 5:30 p.m. local time yesterday, caused the shutdown of the
refinery\'s catalytic cracking unit, said Rodney Mallett, a spokesman
for the Louisiana Department of Environmental Quality in Baton Rouge.
The San Antonio-based refiner expects to have the unit running by
tomorrow afternoon, Mallett said. The Krotz Springs refinery, one of 14
Valero operates in the U.S., Canada and Caribbean, can process about
85,000 barrels of crude oil a day, according to Valero\'s Web site.
Valero\'s 12 U.S. refineries have a total crude processing capacity of
about 1.79 million barrels a day.

Bloomberg News, 1827 April 20, 2004

#### U.S. Refiners Oppose Relaxation of Low-Sulfur Gasoline Rule

Trade groups representing ConocoPhillips, Exxon Mobil Corp. and other
oil refiners will ask the U.S. Environmental Protection Agency tomorrow
to scrap a draft proposal that would allow imports of high-sulfur
gasoline. The EPA has invited the National Petrochemical Refiners
Association and the American Petroleum Institute to meet at 10 a.m.
tomorrow in Washington to discuss relaxing low-sulfur fuel standards
that took effect Jan. 1. The refiners are concerned that the imports
would put costlier domestic supplies at a competitive disadvantage.
Under the draft proposal, fuel brokers would be allowed to import
gasoline that exceeds the 120 parts-per-million federal sulfur limit for
the rest of this year, said Charlie Drevna, director of technical
advocacy at the NPRA. In exchange, the brokers would be required to
import enough lower sulfur fuel in 2005 and 2006 to offset the
high-sulfur shipments this year. Refiners, fuel marketers and importers
who violate the rule face fines up to \$30,500 a day per violation.

Bloomberg News, 1326 April 21, 2004

#### Aramco to Export More Oil in May as Ras Tanura Refinery Closes

Saudi Aramco, the world\'s biggest oil company by output, will export
325,000 more barrels of crude a day next month because the Ras Tanura
refinery is closing for maintenance, an official said. "The crude will
be exported, but that doesn\'t represent any increase in production at
the well-head," said Mustafa Jalali, an executive director at Saudi
Aramco. The refinery\'s crude units will be closed for scheduled
maintenance for about a month, starting from the last week of April, he
said. Aramco owns and operates five domestic refineries in the kingdom.
Ras Tanura, which will keep open its 200,000-barrel-a-day
condensate-splitter, "is the last planned refinery closure this year,"
Jalali said.

Bloomberg News, 1025 April 21, 2004

#### US Motorists to Feel the Pain as Europe Curbs Gasoline Exports

European gasoline traders have been forced to revise down their
estimates of the volume of gasoline moving trans-Atlantic this month
amid fears of a local supply crunch. Traders now think April traffic
will be less than 1 million tons (280,000 barrels per day), down from
earlier estimates of up to 1.5 million tons (425,000 b/d), as heavy
European refinery turnarounds take their toll on regional gasoline
production. More than 10% of the region's 13.1 million b/d refining
capacity will be out of action this month and the first half of next,
according to Oil Daily estimates. Norway's Statoil became the latest
refiner to embark on spring maintenance when it began a month-long
shutdown at its 205,000 b/d export- oriented Mongstad plant last week.
Traders warn that the Mongstad shutdown will eat into cargo availability
at a time when spot supplies from France have also been crimped by
maintenance. Two weeks before the peak summer driving season officially
starts, US motorists are already paying a record \$1.81 per gallon at
the pump, according to US Department of Energy data released Monday. And
with US refiners running 12.1% below par last week on a spate of
unplanned outages and accidents, US marketers had been relying on
imports to meet unseasonably strong gasoline demand.
<http://www.energyintel.com/PublicationHomePage.asp?publication_id=5>

**US to Keep Filling SPR**

The US intends to continue filling the Strategic Petroleum Reserve to
its full 700-million barrel capacity, Secretary of Energy Spencer
Abraham told reporters at a meeting in Tobago on Tuesday. He added that
the Bush administration has no intentions of deferring deliveries to
offset high crude or gasoline prices. "The SPR is the most important
backstop we have to address supply disruption. It's not to be used for
price manipulation," Abraham said. Deferring deliveries would have a
minimal impact of 1-2¢ per barrel. "Fills are transparent and
predictable, and if we don't add that 120,000 b/d, we'd get little
advantage on the price side at the same time that we'd lose the
protection," he said. Separately, Abraham said the US has seen no
specific signs of supply cuts from Venezuela despite recent threats by
President Hugo Chavez.

<http://www.energyintel.com/PublicationHomePage.asp?publication_id=5>

############# New Jersey Fuel Tanker Accident Halts Commuters A fuel tanker flipped over while making a turn onto a heavily traveled roadway early Wednesday in northern New Jersey, authorities said. The tanker was carrying around 5,000 gallons of diesel fuel when it flipped over while the driver was making a turn from Route 3 onto Route 46 West in Clifton, near Passaic, Clifton police said. Authorities shut down the east- and westbound lanes of Route 46 and parts of Route 3. The offices of Emergency Management and Environmental Protection were on site overseeing the cleanup, which will take a couple of hours, said Capt. Kenneth Snagusky, coordinator for municipal Office of Emergency Management. \"They are attempting to reopen the eastbound lane soon,\" Snagusky said. [**http://www.cnn.com/2004/US/Northeast/04/21/tanker.accident/index.html**](http://www.cnn.com/2004/US/Northeast/04/21/tanker.accident/index.html) {#new-jersey-fuel-tanker-accident-halts-commuters-a-fuel-tanker-flipped-over-while-making-a-turn-onto-a-heavily-traveled-roadway-early-wednesday-in-northern-new-jersey-authorities-said.-the-tanker-was-carrying-around-5000-gallons-of-diesel-fuel-when-it-flipped-over-while-the-driver-was-making-a-turn-from-route-3-onto-route-46-west-in-clifton-near-passaic-clifton-police-said.-authorities-shut-down-the-east--and-westbound-lanes-of-route-46-and-parts-of-route-3.-the-offices-of-emergency-management-and-environmental-protection-were-on-site-overseeing-the-cleanup-which-will-take-a-couple-of-hours-said-capt.-kenneth-snagusky-coordinator-for-municipal-office-of-emergency-management.-they-are-attempting-to-reopen-the-eastbound-lane-soon-snagusky-said.-httpwww.cnn.com2004usnortheast0421tanker.accidentindex.html .unnumbered}

**\$2.5 million oil spill exercise under way**

The largest multi-agency training exercise in U.S. history in dealing
with oil spills will take place Tuesday through Thursday in Southern
California and Mexican waters, according to the U.S. Coast Guard. The
\$2.5 million drill \-- which includes the Coast Guard, state Fish and
Game, American Petroleum Institute Consortium and the Mexican government
\-- involves a simulated crude-oil tanker explosion near Los Angeles.
The exercise also will involve a simulated collision near San Diego,
according to U.S. Coast Guard Chief Warrant Officer Lance Jones. "This
exercise is an important opportunity for us to work in a unified
response effort to protect the public, environment and economic
resources in the event of a major spill," USCG Vice Adm. Terry M. Cross,
commander of the Pacific Area, said earlier this month. Command posts
will be set up in San Diego, Los Angeles, Los Alamitos and in Ensenada,
Mexico. The Department of Homeland Security\'s Initial Response Team
will participate in the drill, the first of the kind for the newly
created unit, officials said. The latest cleanup technology will be used
during the three-day drill. The Oil Pollution Act of 1990 requires such
exercises.

Source: <http://www.nbc4.tv/news/3022929/detail.html> April 20, 2004

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#### Natural Gas 

Nothing to report.

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####### Other

**Kentucky AG, AEP, PJM Reach Deal on RTO Participation**

American Electric Power, the PJM Interconnection, and Kentucky officials
reached a settlement that paves the way for the utility to join the
Mid-Atlantic-based regional transmission organization. The deal, signed
by AEP

subsidiary Kentucky Power, PJM, the Kentucky attorney general, and the
Kentucky Industrial Utility Customers, was filed with the state Public
Service Commission Monday. If approved, the deal would remove a major
roadblock to AEP\'s participation in PJM, which has been held up by
state actions in Kentucky and Virginia. Kentucky denied AEP\'s RTO
application last summer, determining that it was too costly for state
ratepayers. The US Federal Energy

Regulatory Commission must also approved the settlement, the parties
said. A FERC judge last month said the commission could override the
Virginia and Kentucky actions and order AEP to join PJM. Under the
Kentucky settlement, AEP will participate in the RTO and its markets on
a voluntary basis. PJM agreed to give information to the PSC regarding
the safe and reliable operation of AEP\'s transmission system, and it
also said it will only curtail AEP load during system emergencies after
it has \"exercised all other available opportunities\....\" The parties
to the deal hope to receive PSC approval within 30 days.
[http://www.platts.com/Electric%20Power/News/6143160.xml?S=n](http://www.platts.com/Electric Power/News/6143160.xml?S=n)

**Energy Prices**

+-------------------------------+-----------+-----------+------------+
|                               | **Latest  | **Week    | **Year     |
|                               | (4        | Ago**     | Ago**      |
|                               | /21/04)** |           |            |
+-------------------------------+-----------+-----------+------------+
| **CRUDE OIL**                 | 36.61     | 36.76     | 30.76      |
|                               |           |           |            |
| **West Texas Intermediate     |           |           |            |
| US**                          |           |           |            |
|                               |           |           |            |
| \$/Barrel                     |           |           |            |
+-------------------------------+-----------+-----------+------------+
| **NATURAL GAS**               | 5.52      | 5.73      | 5.55       |
|                               |           |           |            |
| **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