By the OGJ Online Staff
WASHINGTON, DC, Jan. 7, 2002 —The American Public Gas Association Monday asked the US Energy Information Administration to integrate gas storage data with other existing natural gas statistics to prevent unwarranted price volatility.
EIA plans to begin reporting natural gas storage data on a weekly instead of monthly basis in May in light of a decision by the American Gas Association to discontinue its own report. AGA will continue to publish its weekly gas storage survey through the end of April (OGJ Online, Dec. 11, 2001).
When EIA issues the storage report, APGA said, it is important that the data “not be in isolation but in the context of other relevant supply/demand data.”
The association represents municipal gas distribution companies. The group said EIA’s request for public comment on the survey is too vague and called on the agency to provide more details on how it plans to calculate the storage numbers.
APGA said when AGA issues the storage report numbers each week it is an isolated number that does not offer enough context for marketers to judge the overall gas supply/demand situation.
“Currently, the various players in the market each week basically use the storage report as a market mover, whether or not there is any justification for such movement,” APGA said.
APGA continued:”[I]t is incumbent upon the EIA, when it commences releasing weekly storage data, to take appropriate steps to prevent such unwarranted price volatility as to matters over which it has some control. The EIA is charged, among other things, with a duty to promote stability in energy prices to the consumer, promote free and open competition in all aspects of the energy field, prevent unreasonable profits within the various segments of the energy industry, and promote free enterprise.”
The association recommended “the storage report (along with the accompanying supply/demand data) be issued after close of business on the last business day of the week (usually Friday) so that it will not immediately affect regular or after-hours trading. By waiting until that time, traders and other affected entities will have ample time to review the report in its entirety before trading resumes, thereby minimizing the likelihood of unwarranted price volatility.”
EIA did not immediately respond to APGA’s comments.
APGA said it has reviewed existing supply/demand data collected by EIA, and believes that some of the information could be used to provide a more balanced perspective of factors affecting the market.
EIA has already said it plans to make changes to the weekly storage report, including making reporting by industry mandatory instead of voluntary.
The agency also said it plans to provide weekly estimates of working gas in storage for the same 3 regions of the US for which AGA provided estimates. The EIA and AGA series are expected to be similar, but may not be identical because of some differences in respondents and methodology
APGA said it has developed its own framework for a “predictive” model that could be used in conjunction with the weekly storage data to be collected and reported by EIA.