What’s in a number?

May 1, 2006 By    

Numbers mean a lot when you look to the Energy Information Administration for price information on domestic crude oil and imports. The propane industry often looks to EIA’s Heating Oil and Propane Update during the winter months, as well as the This Week In Petroleum report for important data related to price and supply.

 Lisa Bontempo, Washington Bureau
Lisa Bontempo, Washington Bureau

Unfortunately, in a recent federal register notice, the EIA announced it is discontinuing two surveys as of July 2006. Increased data collection requirements of the agency and lack of budget appear to have driven the decision to kill the Domestic Crude Oil First Purchase Report and the Monthly Foreign Crude Oil Acquisition Report.

At first glance, these surveys may not appear to be crucial to the propane industry or others who may rely on EIA for data.

But the real issue is the constant chipping away at this agency’s ability to deliver timely, accurate data at a time when oil and gas prices continue to hover “like the Sword of Damocles over family budgets and global economies,” according to Diane DeVaul of the Northeast-Midwest Institute.

The Institute is an independent, non-partisan, non-profit policy research organization set up to serve Congressional members in 18 states throughout the Northeast and Midwest.

DeVaul notes that EIA’s petroleum office, where much of the data important to readers comes from, has been cut 40 percent, the staff reduced over 50 percent in the last 10 years. In addition, EIA is expected to lose over one-third of its experienced staff to retirement in the next five years.

Meanwhile, demands on the agency continue to rise from Congress and others as they are called to provide more and fresher data on the number and quantity of fuels. As one example, the Energy Policy Act of 2005 requires EIA to collect data and develop systems to monitor and report on renewable fuels.

Energy is the largest traded commodity worldwide, and everyone from oil and gas producers to investors, economists and officials rely on EIA’s data. If these users have inadequate data and analysis, the policy and economic consequences can be devastating.

According to the Federal Energy Regulatory Commission, inaccurate natural gas storage numbers by EIA in November 2004 sent the futures market up 60 cents and cost consumers between $200 million and $1 billion in December 2004 alone.

At first glance, these two “minor” reports do not track supply-related data. However, they are used by EIA as a first indication of domestic oil production. As any oil or gas man will attest, price is clearly a strong indicator for production and supply.

When it comes to energy, the current administration clearly believes in free markets. It knows that when prices go down, domestic production goes down, which in turn has a direct bearing on global markets.

With so much at stake, why not fully fund and staff the agency that the administration relies on so heavily?

Especially with energy prices spiraling, disruptions can easily bring instability to our markets. Yet it appears that EIA’s ability to supply reliable, timely and independent data is being jeopardized.

The energy marketplace – like all of our free marketplaces – depends on transparency. While our country continues debating our dependence on foreign oil, renewable energies and new technologies, I hope Congress takes note and starts giving the EIA the staff and budget it needs to provide this transparency in the all-important energy sector.

Numbers may not be sexy, but they certainly matter.

Lisa Bontempo was a longtime energy lobbyist, including 13 years with the National Propane Gas Association. She continues to be involved in politics, and can be reached at
lisabontempo@msn.com.

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