The main thing the Energy Information Administration (EIA) can do to improve its weekly storage survey, according to two veteran natural gas associations, is to improve its procedures for collecting and vetting the data it receives from companies, so that after-the-fact revisions will be unnecessary. The suggestions were filed Monday in response to EIA’s call for comments on changing its procedures for announcing revisions to the weekly storage number (see Daily GPI, Jan. 10).

The American Gas Association (AGA) said it was most important to make sure that everything that could be done to eliminate errors is done, so there would be no corrections. The group suggested that EIA document its verification process to give industry more confidence that the reports are accurate.

The Natural Gas Supply Association (NGSA) went further, offering pre-announcement procedures for checking accuracy, including:

Both groups cited the erroneous Nov. 24 weekly storage report, which sent prices spiraling just before the December futures contract closed and led to higher prices for a large number of consumers through the whole month of December. In that case, the withdrawal announced was so far outside the projected realm that most experts who follow the market knew instantly that it couldn’t be correct.

There was no mitigation possible, however, since the futures contract closed just hours after the storage announcement. That closing number set the price in numerous contracts for the following month. Estimates are that consumers paid between $200 million and $1 billion extra through the month of December because of the error.

The market actually corrected itself on the first full trading day after Nov. 24 and the Thanksgiving holiday, and EIA followed on Dec. 2 with its revision. EIA’s current policy is to hold revisions until the next scheduled storage announcement.

To avoid an adverse market impact, the two associations recommended that EIA avoid making its storage survey announcements when the market is more vulnerable to volatility, for instance on days when a monthly futures contract is expiring. NGSA also said that announcements that would fall on the day before a government holiday should be delayed until the next full trading day.

As for closing the barn door, AGA suggested that revision announcements be made as soon as errors are discovered regardless of what markets are open, but giving a two hour notification before the announcement is made. NGSA also said there should be pre-notification, but it is willing to wait until 10:30 a.m. (when Nymex is open) on the first full day after the error is discovered for pre-notification of a revision, which would then be announced two hours later.

While EIA had suggested that only revisions of 15 Bcf or more be made on days other than Thursday when the regularly weekly storage survey announcement is made, NGSA said that number is too high and suggested that revision announcements of 10 Bcf or more be expedited.

NGSA also suggested that EIA use FERC as its investigative arm (since EIA has none) to check on revisions submitted by survey participants, monitoring the process for potential manipulation.

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