STUDY FINDS NEED FOR BETTER DATA ON U.S. GAS

Sept. 28, 1992
The U.S. natural gas network needs an information system that can reliably and accurately report gas deliverability, a federal study says. A joint Federal Energy Regulatory Commission and Department of Energy task force took 2 years to prepare the study.

The U.S. natural gas network needs an information system that can reliably and accurately report gas deliverability, a federal study says.

A joint Federal Energy Regulatory Commission and Department of Energy task force took 2 years to prepare the study.

Its report said, "Information on natural gas today is often fragmentary, late, and focused on outdated issues. Redesigning data systems to serve the emerging, competitive natural gas industry is a crucial challenge for the next decade. The information infrastructure that now serves the natural gas industry was built for the industry of the 1950s, 1960s, and 1970s.

"Vast changes in world energy markets, along with the recent overhaul of regulatory theory and practice, have instigated relatively swift changes in market roles and structures."

Commenting on the report, Energy Sec. James Watkins said, "The nation's energy markets are becoming more and more competitive and complex. For natural gas to meet its potential, reliable and accurate information on its supply and demand is critical."

CHANGES NEEDED

The report said data should be refocused to serve those who buy and sell natural gas and pipeline capacity, a major shift away from the information required for traditional regulation.

Information must flow faster and go to market institutions where parties buy and sell gas or pipeline capacity.

"This implies that electronic bulletin boards (EBBS) should be attached to market centers to allow as many buyers and sellers as possible to access information," the report said.

And other data must be retooled "to serve the needs of regulatory monitoring rather than heavy handed intervention."

"Information will be the life blood of emerging and rapidly changing competitive gas markets. In such an environment, parties currently have little experience on which to base their decisions. They will depend far more on information sources than do many participants in older markets."

The task force studied gas deliverability in Oklahoma to assess the problem nationwide. It found that receiving timely, accurate deliverability data is very difficult, even with intense cooperation by the federal-state-private task force.

No single data source supplies all the information on Oklahoma gas markets, and the problem is worse for those who conduct business in several states.

Time lags could reach a year for calculating a reasonable material balance from existing information on the production, transportation, and consumption of natural gas in Oklahoma.

RECOMMENDATIONS

The study recommended that federal and state agencies work together to develop a standard method of reporting production, and producer organizations and states should develop more accurate and more timely production data.

In particular, it urged FERC to standardize the format of EEBs, mandated in Order 436.

The study said although the Energy Information Administration should continue its annual gas reserves reports, it also could develop other reports that could help standardize terminology and be standard reference for information on gas deliverability.

It said EIA should consider establishing a system that compiles all storage and supplemental deliverability data into one easily accessible data base.

It urged FERC, the Interstate Oil and Gas Compact Commission, and National Association of Regulatory Utility Commissioners to conduct a combined study of the gaps in reporting gas deliverability information. It would include gathering capacities and flows, intrastate volumes, intrastate sales, and distributor sales.

The report recommended that FERC evaluate the need for continuing reporting requirements and eliminate unnecessary ones.

It urged the secretary of energy to ask the National Petroleum Council to study how to improve the timeliness of reporting production data, including the propriety and cost of real time telemetering of production data from states to a central collection point.

The study also would examine the feasibility and usefulness of establishing trunk line and hub telemetering points to provide instantaneous monitoring of regional flows of natural gas.

It said NPC also should study the need for a national voluntary organization to operate in times of emergency or extreme conditions.

The coordination council, composed of industry and government officials, would work to ensure continued deliveries of gas to high priority customers.

Copyright 1992 Oil & Gas Journal. All Rights Reserved.