US Department of Energy Sec. Spencer Abraham said last month his department plans to release more-timely and accurate natural gas data before the home heating season begins this fall.
"In a tight and volatile natural gas market, consumers and producers must have the best information possible regarding the availability of supply and the forces that drive prices in order to make wise decisions about their consumption and production activities," he told a group of industry and government officials attending the National Petroleum Council's Natural Gas Summit. Abraham last month asked the council to hold an "emergency" meeting to offer policymakers suggestions on how to ensure natural gas supplies are adequate and at prices that consumers can afford (OGJ Online, June 12, 2003).
Abraham said US gas now in storage is 32% below last year's level and 22% below the previous 5-year average. "We are concerned that the nation may not reach the normal level of about 3 tcf of gas in storage by the heating season," he said.
EIA role
The department's independent statistical arm, the Energy Information Administration, will be getting an additional $2 million from the department's existing 2003 fiscal year (FY) budget to upgrade US natural gas supply data, the secretary said.
DOE officials also said they plan to ask for more money from Congress through the annual appropriations process now pending for the coming fiscal year that begins Oct. 1.
The White House last February asked Congress to earmark a total of $80.1 million for the entire EIA budget, the same amount Congress provided in FY 2003. EIA's FY 2004 budget request is now before Capitol Hill as part of the Interior Appropriations spending bill that funds the Department of the Interior and a portion of DOE.
Abraham's move to upgrade natural gas data collections comes after EIA earlier this month said that it had been underestimating US natural gas use by as much as 11% in 2002, and 6% in 2001. In recent months EIA said it has revised the way it collects data to include more representative market information and is looking to further improve its databases.
"Better information means more efficient markets, and that means stability for consumers," Abraham said.
Abraham said EIA plans to conduct new surveys of natural gas production as well as "on-system" LNG storage. Meanwhile, natural gas import figures will be reported monthly instead of quarterly. EIA also will enhance and streamline data-collection operations, including breaking out data within EIA's Short-Term Energy Outlook on a regional basis, Abraham said.
Additionally, DOE will hold regional meetings on the US natural gas market this year, although no specific timetable was announced at the NPC meeting.
Big picture
Abraham said that improving data collection and holding "listening tours" were two immediate steps the administration can pursue to help keep natural gas markets stable. Longer term, Abraham called on Congress to pass comprehensive energy legislation and a clean air regulatory reform package—called "Clear Skies"—aimed at power generators and refiners to "finish the job."
He said that the Clear Skies plan pending in Congress provides a range of benefits such as improved health, cleaner air, and economic efficiency that is "the best approach to addressing dual energy and environmental challenges." Passing Clear Skies will avoid the "serious economic consequences of other approaches to cleaner air and provides market-based flexibility to the energy sector," Abraham said.
But consensus on the Clear Skies plan remains elusive; environmental and public interest groups are highly critical of Clear Skies. Green groups and their advocates in Congress say that the NPC's emergency gas summit is a thinly veiled attempt to give the White House the political cover it needs to expand drilling in environmentally sensitive areas and encourage use of coal and nuclear energy.
"Government response to the perceived natural gas crisis should not be like Christmas in June for energy producers," said Katherine Morrison, clean energy advocate for the US Public Interest Research Group, which led a protest outside the NPC meeting.
"Industry and their supporters are taking advantage of fears of a natural gas shortage to get items from their wish list like exemptions from Clean Air Act standards and invasive exploration in protected waters."
Industry view
In an interview on the sidelines of the NPC conference, American Petroleum Institute Pres. Red Cavaney said the industry consensus is that there is not a crisis. New government natural gas storage figures are encouraging and may mean natural gas prices settle down to historical levels over the next few months, Cavaney said. But in the medium and long term natural gas prices are expected to stay elevated, and for that reason the government needs to make policy decisions that encourage producers to make long-term capital investments.
One option for the longer term is for policymakers to revisit public land access, including areas currently off limits to drilling such as lands off California and Florida. Existing moratoria should be reexamined because the nation's supply picture has changed, Cavaney said.
"The world is a much different place than 4 years ago," he said, "and increasingly people in government realize that they are part of the problem." Expanding US production is not a cure-all, Cavaney said, but boosting US supply is needed along with better energy efficiency, more renewable fuels and (LNG) imports to ensure natural gas markets are flexible and reliable.
