While the Energy Information Administration’s (EIA) efforts to improve the transparency of natural gas production data are “welcome,” the proposed monthly reporting process will be “costly for the industry and will be duplicative of other existing reporting efforts,” according to comments filed last week by an industry coalition of major and independent producers.

The coalition estimated that, on average, the cost of implementing the necessary accounting and computer modification to comply with the proposed reporting is approximately $60,000/company. Assuming the same cost for all of 250-350 EIA respondents, the total cost to the industry to implement this new reporting requirement would be $15-$21 million, the coalition said.

Participating in the joint comments are the American Petroleum Institute, the Domestic Petroleum Council, the Independent Petroleum Association of America, the National Ocean Industries Association, the Natural Gas Supply Association and the U.S. Oil & Gas Association. The comments were filed in response to EIA’s proposed new form EIA-914 on behalf of thousands of major oil and gas companies, independent oil and gas producers, refineries, offshore contractors, natural gas transportation and distribution companies and various other industry firms.

“The proposed reporting would require additional capital, programming, computer run time and employee costs,” the group said in its comments. “EIA’s estimate of a monthly three-hour burden does not appear to include the panoply of cost and burden.”

The producer associations noted that they believe that the most efficient and cost-effective data collection method is to obtain it directly from the producing states and Interior Department’s Minerals Management Service (MMS), which the associations noted is already collecting most of it from producers. As a result, the coalition said that any additional reporting by well operators is generally duplicative, as well as labor and capital-intensive.

“The industry coalition strongly endorses the 2003 National Petroleum Council (NPC) recommendation that ‘government policies should foster timely and accurate information regarding supply, demand and storage,'” the associations said. “EIA’s proposal moves us closer toward the NPC goals. However, we believe there are other more practical and efficient ways in which these goals could be accomplished.”

While the EIA indicated that there are flaws associated with collection through other state and federal agencies, the producer coalition said fixing these problems would be “simpler and less burdensome” for both the EIA and the industry itself. As a more effective alternative, the coalition urged the Department of Energy to work with the individual producing states and the MMS to provide EIA this production information.

However, if the EIA pushes for an entirely new production survey to be implemented, the associations recommended modifications to the EIA’s approach. The recommendations include urging the EIA to extend the reporting deadline from 30 to 60 days after the end of the report month. The coalition holds that the EIA’s 30-day deadline is significantly tighter than the timeframes required by several major producing states and the MMS.

In addition, the associations encouraged the EIA to limit the number of activity-stream components reported to those that are truly necessary for the purpose of providing a good overview of production levels. “This would greatly reduce the cost and burden of tracking data, particularly when some of the proposed data points are not currently generated,” the coalition said.

Due to the significant accounting, computer and systems work that would be required to submit the proposed information, the associations said they believe the earliest feasible timeframe for implementation of any new survey would be January 2005.

“The industry coalition supports EIA’s efforts to improve the quality and timeliness of natural gas production reporting to enhance understanding of what is occurring in domestic natural gas supply in the U.S.,” the associations said. “The industry coalition, however, believes the most efficient data-collection method would be to simply improve the existing reporting mechanisms and coordination with the producing states and the MMS.”

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