A solid majority of close to 100 energy leaders meeting behind closed doors in Houston Monday endorsed the proposition that a competing mixture of financial, journalistic and academic institutions and FERC should collect energy price data, while Commission Chairman Pat Wood, acknowledged that current price indexes appear to function well.

The vote appeared to back up statements from independent market observers that “independent and competitive price reporting services,” rather than a detailed government tracking of prices that borders on price controls, provide the industry with the best measures of the fast-paced market.

“You need at least two, maybe three or maybe four aggressively competitive press organizations” tracking the market, industry analyst Phillip Verleger told NGI recently. Verleger cited the “clear reporting of prices in the oil industry. With clear reporting you can’t hide mistakes or subsidize one business with another.” Others noted that the publication American Metals Market has been reporting steel and other metals commodity prices since the 1880s and currently competes with the London Exchange in reporting metals prices.

The vote Monday, announced at the end of the private meeting of Wood and nearly 100 high-level energy participants at the University of Houston, on what entity should have responsibility for collecting and publishing energy price data was split. About 8.6% voted evenly for “journalistic institutions,” FERC and “academic institutions.” Another 13% thought “financing institutions” should collect the data. Meanwhile, 61% thought a “combination” of institutions should share responsibility for data collection.

Avoiding questions about alleged manipulation of published price data, Wood said the price indexes appear to function well. “It’s what works the best,” he said. He also all but admitted that his agency has more work than it can effectively handle, when asked whether FERC might soon seek quarterly natural gas data. It now collects quarterly power data.

Wood met with the energy company executives, along with Michael Smith, executive director of the Committee of Chief Risk Officers (CCRO), UH business school professors and Craig Pirrong, director of the UH-based Global Energy Management Institute (GEMI) for several hours to discuss various energy trading issues affecting the industry.

The FERC chief said the subjects discussed revolved around the overall health, not just of the merchant industry but the entire energy industry. Infrastructure has to be added for crude oil, oil products, natural gas and power in the next 18 months, said Wood. He also said it was “essential” that credit problems be resolved. The meeting ostensibly was another move forward to improve lender, investor and public confidence in the energy trading industry.

Wood and other forum participants acknowledged a continuing crisis of confidence facing the anemic energy merchant business. But the Federal Energy Regulatory Commission chief admitted he did not yet know the answers. “I am looking for thoughtful solutions,” he said.

Last August, Wood participated in GEMI’s inaugural CEO roundtable discussion, and he unveiled GEMI’s energy risk management certificate program at UH’s Bauer College of Business.

“Providing the opportunity to bring government officials and industry representatives together in an academic setting at the Bauer College through GEMI makes sense, since Houston is considered the energy capital,” Pirrong said. “We’ve made progress during the initial round of talks last fall. An on-going dialogue among these parties should provide a framework that can be used to mend a frayed industry.”

Pirrong, who joined the Bauer College staff last spring and took over GEMI in mid-January, said that “rebuilding confidence is the key” to restoring energy trading. “In today’s energy market, confidence has eroded so much that people in the market are reluctant to trade.” He believes that “market clearing, a mechanism that assumes the responsibility of the trading and selling of commodities, will help restore this confidence.”

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