Since the accuracy of the weekly storage survey results in the first instance is most important to the smooth operation of the natural gas market, the Energy Information Administration (EIA) should include in its operating rules a provision allowing the agency to delay its regularly scheduled announcement if it suspects its data is incorrect, but hasn't had time to identify the error, the American Public Gas Association (APGA) said in comments recently.
EIA could say the weekly report was being delayed to allow further checking. The rationale is that not releasing a storage report is better than releasing an erroneous one, APGA said, responding to EIA's request for comments on its storage revisions policy.
As for after-the-fact revisions, APGA lined up behind the proposed variable revisions timing (VRT) during Nymex trading hours, with notification. With this policy, revisions could be made as often as necessary and the market could be informed sooner than with a fixed-revisions policy.
APGA also joined others in suggesting that a 15 Bcf floor for out-of-time revisions is too high a floor. It suggested the market should be informed of revisions of 10 Bcf or more as soon as possible. The Federal Energy Regulatory Commission had suggested a floor of 7 Bcf. FERC, along with the majority of other commenters, favored a flexible revisions policy (see NGI, Feb. 14).
Standing in opposition to the VRT was Nymex, which prefers that any revisions be announced on Mondays at 10:30 a.m ET unless Monday is not a trading day in which case announcements would be made on Tuesday. EIA should notify market participants at 8:30 a.m. ET if there is to be a revision, the exchange said. The set time would ensure that the most market participants would be on tap for the announcement.
The municipal gas group also said EIA should not release storage data on the day a Nymex contract closes, nor on the day before a federal holiday. The infamous Nov. 24, 2004 erroneous storage announcement came on the closing day for the December contract, which was also the day before Thanksgiving. Seeing more value to "accuracy over alacrity," APGA said it would have been far better if the announcement had come on the Monday after the holiday when it was more likely that supervisory personnel would be on duty.
Many commenters endorsed having no storage announcements on those critical days. There also was an overwhelming response urging EIA to improve its processing of the survey to help eliminate errors so that there need be no revisions.
Suggestions from other commenters have ranged from daily reporting of gas in storage to reports on storage only once a month, to installation of telemeters at all storage facilities that would automatically send information once a week to EIA.
(Editorial Comment: Note that NGI has a somewhat similar situation to EIA since its bidweek results have a regularly scheduled publication deadline; that is by 4 p.m. ET on the first business day of each month. Despite all our best efforts, there have been rare occasions when the bidweek data has had to be delayed because of difficulties in checking out key data. It is the editors' experience that the market can tolerate delay better than it can tolerate a significant error and later correction. APGA's suggestion providing a failsafe process for delay is a point well taken.)
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