Looking to refine and improve the timeliness of natural gas production data, the Energy Information Administration (EIA) announced on Friday plans for a new monthly survey (EIA-914), which will sample well operators. It is calling for comments on the proposed survey form.

The move comes in response to calls for improvement in production information from market participants, the financial community, the Bush administration, and members of Congress. EIA Administrator Guy Caruso noted that natural gas markets have tightened considerably in recent years.

“The new production survey can substantially improve both the quality and timeliness of our monthly natural gas production estimates — our goal is to have releasable numbers 60 days after the close of a report month with a sampling error at the national level in the 1% range,” Caruso said. “Timely, high-quality production data are more important than ever to market participants. The proposed new survey is a key part of EIA’s plan to meet this need.”

The new method will replace the EIA’s current method, which issues estimates of monthly natural gas production 120 days after the close of a report month based primarily on preliminary data from the states with larger production volumes and from the Minerals Management Service (MMS), with reliance on statistical imputation techniques for the states with relatively less production.

EIA analysis has found that these monthly estimates match “final” values (no further revisions) to within 3% or less at the national level of aggregation. “While the present 120-day information lag is a vast improvement over the timeliness of the state and MMS-provided final data, it is still too long for the information to be useful in determining near and intermediate term supplies, especially during natural gas peak demand periods,” the EIA found. “Also, a 3% error band, comparable to some monthly variations in production, is too large to accurately discern if production is rising or falling.”

While discussing ways to improve the data, the EIA considered several alternatives other than a survey of well operators. They included:

After analyzing all of the methods, the survey of well operators was found to be the only alternative that could satisfy EIA’s accuracy and timeliness requirements. The government agency noted that respondent burden and the need for confidentiality were both carefully considered.

Under the new plan, the EIA estimates that a sample of approximately 250-350 respondents will be needed to obtain estimates with a sampling error of less than 1% at the national level and less than 5% for each of six regions. In order to elevate confidentiality, the agency plans to conduct the new sample survey under provisions of the Confidential Information Protection and Statistical Efficiency Act of 2002 (CIPSEA), which provides extremely strong protection against the disclosure of respondent data.

The EIA is soliciting comments on proposed new form EIA-914, “Monthly Natural Gas Production Report,” looking to receive comments from a wide range of market participants, including producers, pipelines, distribution companies, consumers, the financial community, and government officials. Comments must be filed by June 22, 2004 to Barry Yaffe by FAX: 202-586-9739, e-mail: barry.yaffe@EIA.doe.gov or telephone: (202)-586-4412.

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