The Energy Information Administration (EIA) plans to completely cut out or scale back a number of its energy analysis programs due to a 14% reduction in its budget for the current fiscal year.

The fiscal year (FY) 2011 budget, which was hammered out between President Obama and Congress last month, would shave agency funding by $15.2 million to $95.4 million (see NGI, April 18). “The lower FY 2011 funding level will require significant cuts in EIA’s data analysis and forecasting activities,” said EIA Administrator Richard Newell.

Many of the EIA activities that the natural gas industry relies on appear to have escaped the budget scalpel: weekly storage withdrawal estimates, monthly 914 production figures, the monthly Short-Term Energy Outlook and the Annual Energy Outlook.

However, the EIA said it will not prepare or publish this year’s edition of U.S. proved oil and natural gas reserves; it will curtail efforts to understand linkages between physical energy markets and financial trading; it will suspend auditing of data submitted by major oil and gas companies and reporting on their 2010 financial performance; and it will reduce collection of data from natural gas marketing companies.

The agency said it also will make adjustments to its analysis/forecasting programs for electricity, renewables and coal; and suspend work involving consumption, efficiency and international energy data.

The EIA has about five months to make the necessary cuts, said spokesman Jonathan Cogan. Additional cuts are being evaluated and may result in further adjustments to EIA’s data and analysis activities in the near term, according to the agency.

Sen. Jeff Bingaman (D-NM), chairman of the Senate Energy and Natural Resources Committee, was highly critical of the cut to the EIA budget. “Deep programmatic cuts have been announced at the [EIA] as a result of the overall agreement to fund the government for the remainder of fiscal year 2011. EIA is just one of the many casualties of that budget agreement. [It] is one of the few neutral and credible sources of information on oil and gas prices. And right now, Americans need that sort of objective information more than ever,” he said.

“How does it benefit us to force the EIA to stop collecting information on oil and [natural gas] proven reserves and prices; to curtail its analyses of the linkages between financial and physical energy markets; or to end its review and analysis of international energy trends? These cuts just make it that much more difficult to chart a national energy policy that addresses real challenges,” Bingaman noted.

“As we approach the next round of budget negotiations for the fiscal year 2012 budget, Congress will need to do a better job of protecting the federal programs, like the Energy Information Administration, that are crucial to our understanding what is actually going on with energy supplies, energy demand, and energy markets.”

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