–EIA Changing EIA-914 Sampling and Estimation To Be More Current

By Brai Odion-Esene

WASHINGTON (MNI) – The Energy Information Administration is making
some improvements to how it collects data on monthly natural gas
production, an official told Market News International Monday, but the
changes will not affect the trend in natural gas output which will focus
on timing in order to become more current and frequent.

The EIA’s Gary Long, who oversees the monthly gas production data
— known as the 914 report — stressed that the changes the EIA is
making will not change the trends in the natural gas production. “It may
shift the magnitude up or down a little bit but I don’t anticipate any
changes in trend,” he said.

The changes the EIA is making will not affect past data, Long said,
since nothing in the past will be revised immediately. “Our normal
schedule for those kind of revisions is once a year and usually in the
late fall sometime.”

The EIA will be changing the methodology both for the estimation
and the sampling processes, he said. “The changes relate to timing, both
in the frequency and more current — closer to now.”

Long said this will not affect the weekly natural gas report
published by the EIA on Thursday.

A story in the Wall Street Journal Monday said the EIA is making
these changes due to a problem it discovered in the way it collects data
from U.S. natural gas producers — it surveys only large producers and
so does not reflect the swings in production from smaller producers.

Asked if the monthly data would have been different if the EIA had
included smaller natural has producers, Long said, “No, its always been
a cut-off sample and it will continue to be a cut-off sample.”

He continued, “Basically at the lower 48 level we have about 90%
coverage. The difference in the sampling will be rather than going back
a year or two years and using annual average production to pick the
sample, we are going back a few months and looking at monthly production
to adjust our sample every month instead of every year.”

This will make the data more current, Long said, “and hopefully
that means more accurate.”

The decision to make the change now to the 914 sampling and
estimation process is the cumulation of a review conducted by the EIA
last year. “We saw some estimates in Texas that we thought maybe weren’t
quite right so we initiated a review process and basically what we are
seeing now is the result of that review process.”

The EIA looked at the sampling as well as the estimation
methodology and decided the current process was not responsive to
changes in the industry, Long said, mostly due to rapid increases in
shale production.

“That led to looking at timing issues and moving both the sampling
and estimation processes closer to now and more frequently updating
those … to catch changes in the industry sooner rather than later.”

So will such reviews be conducted more regularly? The EIA would
like to engage in continuous improvement, he said, although, “We are
always limited by resources.”

Asked if the changes in the collection of monthly natural gas
production data might be matched on the crude oil side, Long said that
while he is not involved in that area, “It’s possible … if we ever see
something that is maybe not working the way it ought to, we are going to
look at it.”

** Market News International Washington Bureau: 202-371-2121 **

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