The Energy Information Administration (EIA) has decided to continue to refrain from making revisions to its storage data based on its estimation procedure, but it will make revisions at regularly scheduled times if survey respondents report changes that total more than 7 Bcf, the agency said in a Federal Register notice last Tuesday.

In July, EIA requested comments on its revision policy after many people in the industry complained about its numerous revisions and its estimation methodology that ensured the revisions would continue.

EIA took over the weekly storage survey from the American Gas Association last spring, but it dramatically changed the procedure and methodology behind the report. AGA used a survey sample and an extrapolation based on a theoretical “full” level of total U.S. working gas in storage. EIA continued using a survey sample but changed the methodology to include a complex estimation procedure based actual complete monthly storage data. Because it continuously collected new complete monthly data, it had to continuously update its estimation formula, which forced regular revisions.

EIA put its estimation procedure on hold after it received comments opposing the methodology. The agency currently is using a set estimation formula until it can develop ways to avoid continuously revising historical data. It will make revisions, but only if survey respondents report changes greater than 7 Bcf, and it will report the revisions only on its regular schedule, according to Tuesday’s notice.

EIA said it believes that the “initial start-up problems” with its storage report, “have been resolved. In the first 10 weeks that EIA issued weekly storage reports, five revisions were issued but only one revision was necessary in the following 15 weeks through Oct. 24.”

In its request for comments, EIA also proposed a policy of reporting revisions at times other than at 10:30 a.m. Thursday, which is when it normally releases its weekly storage report. EIA was considering such unscheduled revisions only in the event of a large correction, greater than 35 Bcf. It also was considering issuing a prenotification a day ahead of any unscheduled revision. In addition, EIA requested comments on the required threshold for any unscheduled or scheduled revisions.

The agency decided against the proposed policy of making unscheduled revisions for changes greater than 35 Bcf. A large number of commenters expressed concerns about the market volatility that could be caused by such action and the costs of having to be always on the lookout for potential storage revisions. EIA decided the costs of such a policy change would be greater than the benefits.

“By its very nature, unscheduled releases make ensuring fairness to all market participants problematic because market participants will likely not learn of a revision at the same time,” EIA concluded. “Additionally a prenotification to inform market participants of an upcoming revision would give an advantage to the individuals who hear about the upcoming revision first, as they may be able to infer the direction of the revision and anticipate its effect on prices.

“Each new announcement that EIA makes about the market-moving storage number will likely be accompanied by attendant price volatility. As an independent policy neutral, statistical agency, it seems prudent for EIA to adopt an unobtrusive stance and to minimize the number of announcements that it makes regarding new weekly storage data.”

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