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EIA to Begin New Monthly Gas Production Survey in January

EIA to Begin New Monthly Gas Production Survey in January

The Energy Information Administration (EIA) is expecting its new monthly natural gas production survey, which will begin in January with the first release of data at the end of April, to fill a substantial need in the gas market, potentially rivaling its weekly gas storage report in importance, according to John Wood, director of reserves and production in the EIA's Dallas office.

"Just as the natural gas storage report gained a tremendous public interest, we expect this to also be watched very closely," Wood said in an interview with NGI last week.

In an effort to provide more accurate and timely natural gas production statistics to the industry, the EIA announced plans last spring to conduct the new survey that would replace its current cumbersome and time-lagged data collection process, in which the EIA relies on data collected by state agencies and the Minerals Management Service to produce national gas production statistics.

However, the agency faced some pretty stiff opposition from producers who worried about the cost of compliance, the duplication with state surveys and the market sensitivity of the production data they would be submitting.

As a result, EIA whittled down the amount of data being requested and made some concessions in other areas.

The federal Office of Management and Budget, which authorized the survey in September, said it will take an average of about 25 hours for each company to make their initial data submission but after that it will take only about three hours over the course of the allowed 45-day reporting period to submit the information.

The new production survey (Form EIA-914) also will fall under the strict guidelines of the Confidential Information Protection and Statistical Efficiency Act, which requires all government personnel to undergo a training program to guarantee that the information collected from producers will remain confidential. Penalties for revealing the data are severe -- up to five years in prison.

The survey will include two main sets of data, gas gross withdrawals and natural gas lease production, from about 280 producers (and up to as many as 350 if needed), representing about 90% of the natural gas production in the Lower 48 states. EIA expects to be able to achieve a high degree of accuracy in estimating domestic gas production using the information from the survey.

The data will have a two-month time lag, in contrast to the current four-month lag for production data, which is published in EIA's Natural Gas Monthly and several of its other publications. For the first three months, producers will have 60 days from the end of the reporting month to submit data to EIA. After that, they will have 45 days.

"My expectation is that this survey will get substantially more attention that does our current series, which is significantly [delayed]," Wood said, noting that it is possible for some of the state data used for the current monthly production statistics to be revised over a 24-month period.

Producers have been concerned about the cost and reporting burden of the new survey, but many agree with others in the industry that more timely and accurate supply data is needed in the marketplace to help reduce price volatility.

"Most of the [producers] even have said this is a good idea," said Wood. "Most of them saw that the public value of this outweighed any problem they would have reporting. We are trying to make it as easy to report and work with us as possible." Wood also noted that the new survey will fall under the

The American Public Gas Association (APGA), which represents the nation's municipal gas utilities, sent a letter to EIA Administrator Guy Caruso lauding the new survey. "As you know, APGA has long advocated for substantial improvements to the quality and quantity of publicly available, timely and reliable natural gas market information," said APGA CEO Bert Kalisch. "APGA has pursued this mission so doggedly because additional market data is absolutely necessary to help dampen the extreme price volatility the market continues to experience. In part, production data will help put the weekly storage numbers in context.

"Public gas systems will place great value in the production survey results as they plan responsible gas purchasing and hedging strategies for the benefit of local consumers."

Wood said EIA will publish a total gas production number for the Lower 48 states and also will break up the production data into six regions: the Gulf of Mexico, Texas, Louisiana, Oklahoma, New Mexico and Wyoming.

"We have showed that if the data is reliable we can get well within half a percent of total actual production [with this new survey] even in the individual state of Texas, and that we would be unlikely to revise that number," he said.

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