The Energy Information Administration soon will unveil improvements to its weekly U.S. natural gas storage survey, agency officials announced last week. One of the changes being considered is increasing the number of storage firms that are surveyed each week.

Citigroup gas analyst Kyle Cooper said that “if implemented correctly,” the improvements to the survey should lower winter withdrawals and increase summer injections.

“In a nutshell, the weekly report overstated withdrawals in the winter and then overstated injections in the summer to equalize the actual numbers by Oct. 31,” said Cooper. “This was the historical relationship between AGA and EIA storage numbers. Thus a more accurate representation of true winter withdrawals will lead to a higher storage number on March 31 and subsequently lower injection numbers in 2004.

“Depending on how quickly this change is implemented, we now firmly believe that storage withdrawals will be significantly lower [emphasis removed] than last winter unless temperatures are exceedingly cold,” Cooper added.

EIA’s Bill Trapmann said it would be premature to discuss any further details on the changes right now. He indicated that changes probably would be announced later this month.

In an interview with NGI in August, Trapmann said the agency was looking at ways to improve its weekly storage survey methodology to better capture changes in the industry/market as they happened (see NGI, Sept. 1). There were record withdrawals and a record low level of gas in storage at the end of last winter, which presented significant challenges for weekly storage estimations under the agency’s current methodology, in which 45 companies are surveyed as a representative sample and then a weekly storage estimate for the entire group of gas storage companies nationwide is created based on that sample.

As the EIA completed its monthly data for February, March and April, it became clear that the weekly data estimates for those months were falling significantly short in increasing amounts each month. EIA’s weekly numbers fell short of its complete monthly data by 26 Bcf for the end of February, by 29 Bcf at the end of March and by 85 Bcf at the end of April. In fact, the methodology has understated actual inventories in eight out of the last 13 months and weekly estimates have been off by as much as 11%.

“We feel that while the weekly storage methodology probably performs well and has performed well in more normal circumstances. This past winter was rather unusual with the tremendous drawdowns,” Trapmann said. “The methodology is predicated on the working assumption that [storage] firms will tend on average to perform similarly with respect to their uses of storage.

“I’m sure we all hope that the events of the past winter don’t repeat themselves with these massive drawdowns, but if they do we will have to be prepared,” he said.

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