More than 75 energy experts, including academics, industry executives, and economists, want US Sec. of Energy Spencer Abraham to support a budget boost for the Energy Information Administration, the Department of Energy's independent statistical arm.
A letter dated July 21 said EIA's budget should be at levels at least 10% higher than what the White House wants for the upcoming 2004 fiscal year (FY) that starts Oct. 1. Economists and other experts said that the agency needs more money to keep up with changes to the energy sector, which has grown increasingly complex as it moves from a regulatory to a market-oriented model. EIA professionals are doing a good job, the experts said, but they need more resources to improve data quality and to review and update market models that reflect changed circumstances.
Money needed now
"As professionals in energy economics, we wish to call your attention to what we believe has gradually become an insufficient allocation of departmental resources overall to timely data and objective analyses on energy supply, demand, and price," the letter said. "These are increasingly critical to all stakeholders; yet, as the energy sector's old regulatory model has evolved to market orientation, the tasks of the EIA have become far more complex. They challenge even EIA's diligent efforts to continue generating the sound product on which so much of the nation's business and industry depends in reaching sound judgments—and which only an entity such as EIA can offer."
Letter signers include officials from the Interstate Oil & Gas Compact Commission, Harvard University, International Association of Energy Economists, the Federal Reserve Bank of Dallas, Deutsche Bank AG, multinational oil companies, and large electric utilities.
Budget pending
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. The House version calls for $82.1 million; a Senate spending panel earmarks $80.1 million, the same as the White House's request made last February (OGJ Online, June 26, 2003).
Speaking before an emergency meeting of the National Petroleum Council, Abraham said in June that his department plans to release more timely and accurate natural gas data before the home heating season begins this fall. To that end he promised to give EIA an additional $2 million from the department's existing FY 2003 budget to upgrade US natural gas supply data.
DOE officials also said they plan to ask for more money from Congress through the annual appropriations process now pending for FY 2004. DOE officials also declined to comment on the July 21 letter because they said they had not seen it yet.
The letter commended Abraham on his pledge to boost existing funding. But the group said much more must be done.
"We commend you for your support of additional funds in FY 2004 to improve the natural gas market data and analysis. However, we suggest that marginal efforts are not enough; a major multiyear effort to review and update all areas within EIA is essential to the future success of energy markets and well-informed public policy decision-making. A more serious annual funding level, probably $8 million above EIA's current budget, would be required. Even while heeding budget constraints, a reworking and rejuvenation of EIA's information collection and processing activities would bring our nation enormous net benefits," the letter said.
"Decisions involving millions, even billions, of dollars of long-term capital investment rely on EIA information and analysis. As power, natural gas, and petroleum markets evolve, it is critical for both suppliers and users to understand market dynamics at the national, regional, and state levels," the letter said.