Natural Gas Production Monthly Survey

By

Inderjit Kundra

The Energy Information Administration (EIA) will be initiating a new
monthly survey beginning in January 2005. The purpose of this survey is
to provide monthly estimates of natural gas production at the regional
and national level. The regions under consideration are Texas (TX),
Federal Gulf (FG), Louisiana (LA), New Mexico (NM), Oklahoma (OK),
Wyoming (WY), and Others.

To accomplish this, we propose two different sample sizes corresponding
to the precision levels of 5% and 1% coefficient of variations, at the
national and regional levels. For this purpose, EIA-23 sampling frame
for the year 2002 was used to compute the sample sizes. This frame
consists of a list of 20,906 gas producing operators, of which 7285
reported a measurable production, 5,527 reported "zero" production and
the remaining 8,094 reported "blank" production. For estimating the
sample size, the operators showing zero or blank production were
excluded from the frame. A small sample of zeros and blanks will be
fielded to validate the accuracy of these responses.

**[Determination of sample size]{.underline}**

To determine the sample size the Presumed Optimum Allocation formulae
for sample size under optimum allocation as given by Cochran in Sampling
Techniques, 2^nd^ edition, Section 5.47, page 105 was used. To
accomplish this:

-   All the operators within a region were arranged in descending order
    of their magnitude in terms of 2002 production;

-   The operators were grouped into five approximately equal size
    strata. The strata were created by forming a cumulative sum of
    production until the sum was greater than or equal to one-fifth of
    the total national or regional production.;

-   Stratum population variances were computed, as follows:

> $$S^{2}(h) = \frac{\sum_{i}^{N(h)}{(y(\text{hi}) - (\overset{}{Y}(h))^{2}}}{N(h) - 1}$$
>
> Where:
>
> h denotes a stratum in a region
>
> N(h) denotes number of operators in stratum h
>
> y(hi) denotes the production for operator i in stratum h
>
> $\overset{}{Y}$(h) denotes the mean for stratum h
>
> $$

-   The above computed values were plugged in the following formulae to
    estimate the sample size.

> $$\text{CSS} = \frac{\lbrack\sum_{}^{}{(N(h) \ast S(h))\rbrack^{2}}}{\lbrack\text{CV} \ast (\sum_{}^{}{\sum_{}^{}y(h_{i})})\rbrack^{2} + \sum_{}^{}{(N(h) \ast S^{2}(h))}}$$
>
> Where CSS denotes calculated Sample Size
>
> h denotes stratum in a region
>
> N(h) denotes number of operators in a stratum
>
> S(h) denotes standard Deviation in stratum h
>
> CV denotes coefficient of variation
>
> y(h~i~) denotes the production for operator i in stratum h

Table 1 provides the computed sample sizes corresponding to two
coefficients of variation (CV) of 5% and 1% for the US, as a whole, and
the 7 individual regions. This table further provides the expected
number of operators to be selected with certainty (Columns 2 & 5) and
the percentage of regional production covered by the certainty companies
within a region (Column 3 & 6). The estimated sample sizes corresponding
to respective CV of 5% and 1% are shown in columns 3 & 6.

Table1:- Estimated Sample Sizes

+--------------+-------+--------+-------+---+-------+--------+-------+
| Region       | 5% CV |        |       |   | 1% CV |        |       |
+--------------+-------+--------+-------+---+-------+--------+-------+
|              | Cert  | Cer    | Pro   |   | Cert  | Cer    | Pro   |
|              | ainty | tainty | posed |   | ainty | tainty | posed |
|              | Group | Co     | S     |   | Group |        | S     |
|              |       | verage | ample |   |       | Co     | ample |
|              |       |        | Size  |   |       | verage | Size  |
+--------------+-------+--------+-------+---+-------+--------+-------+
| \(1\)        | \(2\) | \(3\)  | \(4\) |   | \(5\) | \(6\)  | \(7\) |
+--------------+-------+--------+-------+---+-------+--------+-------+
| **US**       | *     | *      | **    |   | *     | *      | **    |
|              | *58** | *76%** | 111** |   | *95** | *82%** | 176** |
+--------------+-------+--------+-------+---+-------+--------+-------+
|              |       |        |       |   |       |        |       |
+--------------+-------+--------+-------+---+-------+--------+-------+
| TX           | 52    | 74%    | 96    |   | 134   | 86%    | 221   |
+--------------+-------+--------+-------+---+-------+--------+-------+
| FG           | 12    | 72%    | 20    |   | 18    | 81%    | 27    |
+--------------+-------+--------+-------+---+-------+--------+-------+
| LA           | 34    | 72%    | 57    |   | 71    | 87%    | 96    |
+--------------+-------+--------+-------+---+-------+--------+-------+
| NM           | 15    | 80%    | 28    |   | 21    | 84%    | 36    |
+--------------+-------+--------+-------+---+-------+--------+-------+
| OK           | 35    | 72%    | 63    |   | 56    | 79%    | 98    |
+--------------+-------+--------+-------+---+-------+--------+-------+
| WY           | 25    | 93%    | 31    |   | 29    | 96%    | 35    |
+--------------+-------+--------+-------+---+-------+--------+-------+
| OTHERS       | 38    | 73%    | 63    |   | 46    | 76%    | 75    |
+--------------+-------+--------+-------+---+-------+--------+-------+
|              |       |        |       |   |       |        |       |
+--------------+-------+--------+-------+---+-------+--------+-------+
| **Regional** | **    | **-**  | **    |   | **    | **-**  | **    |
| **SUBTOTAL** | 211** |        | 358** |   | 375** |        | 588** |
+--------------+-------+--------+-------+---+-------+--------+-------+

It should be noted that about 41 of the certainty operators do business
in more than one region. Table 2 lists these operators along with the
regions they operate in. It is obvious from the last column of this
table that if we count these multi-regional operators once, the overall
regional sample will be reduced by 102. By counting these operators
once, the anticipated regional level sample sizes corresponding to a CV
of 5% and 1% will reduce to 256 and 486, respectively. This will not
affect the regional sample sizes.

In addition to this survey, the monthly estimates for natural gas
production for the state of Texas are developed by using data obtained
from the Texas Railroad Commission (TRRC) and the Multinomial Model.
This model helps in forecasting the data for the non-responding
operators. Initially these estimates are treated as preliminary, and are
revised as and when more data are received.

The Texas data collected from the proposed survey will be compared to
the estimates based on TRRC and the multinomial model. Depending upon
the results of the comparison we could recommend eliminating collection
for this state. if multistate companies in the certainty group are
counted only once.

1.  
2.  

Further, since Federal Gulf accounts for 25% of the total natural gas
produced in the United States, it was decided to develop its estimates
at a higher level of precision , say, a CV of 1%. This would add 7 more
operators raising its sample size from 20 to 27. Using this option, the
overall sample size will increase to 263.

Two sample selection plans will be used to select this sample. The first
plan will select this sample using a single stage stratified random
sampling plan with operator as the ultimate sampling unit. This plan
selects the sampling units within a stratum with equal probability.

The second plan will select the sample using a probability proportional
to size selection plan. Under this plan sampling units will be selected
systematically, with probability proportional to their measure of size.

The estimates along with their variances will be compared to evaluate
the efficiency of the two plans. This will help EIA to decide which
sampling plan to adopt. The results of these manipulations will be
compared at least for two previous years.

EIA has selected a sample of 200 of the operators that are recorded as
reporting "zero" in the frame, and also has selected a sample of 200 of
the operators that are recorded as reporting "blank". EIA's Dallas Field
Office will evaluate the operators in the sample and provide all
available information. If questions remain about their activity, or
possible activity these operators will be contacted.

3.  

The Committee is requested to comment on all aspects of the proposed
methodology and provide guidance for conducting this survey. The
Committee is also invited to comment on how to take care of the
operators with zero or blanks, especially, if our samples of the zeros
and blanks result into a few operators having large production.

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  ----------------------- ----------------------- ------------------------
                                                  

                                                  

                                                  

                                                  

                                                  

                                                  

                                                  
  ----------------------- ----------------------- ------------------------

-Proposed Sample Size

  ----------- ------------------ ---------- ---------- ---------- ----------
                                                                  

                                                                  
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Table 2:- Multi-State Reporting Adjustment

  ------------- ------------- ------------- ------------- ------------- ------------- ------------- ---------------- --------- -----------
  FG            LA            NM            OK            TX            WY            OTHER         Operator Name    \# of     Excessive
  **(12/19)**   **(23/35)**   **(15/16)**   **(22/36)**   **(32/53)**   **(17/26)**   **(22/39)**                    Regions   Counts

  FG            LA            NM            OK            TX            WY            OT            CHEVRON U S A    7         6

  FG            LA            NM            OK            TX                          OT            EL PASO          6         5

  FG            LA                          OK            TX            WY            OT            ANADARKO         6         5

                LA            NM            OK            TX            WY            OT            BURLINGTON       6         5

                LA            NM            OK            TX            WY            OT            X T O ENERGY INC 6         5

  FG            LA            NM            OK            TX                                        BP PLC           5         4

  FG            LA                          OK            TX                          OT            EXXON MOBIL      5         4

  FG            LA            NM                          TX            WY                          DEVON ENERGY     5         4

  FG            LA            NM            OK            TX                                        APACHE CORP      5         4

                              NM            OK            TX            WY            OT            MARATHON OIL CO  5         4

                              NM            OK            TX            WY            OT            E O G RESOURCES  5         4

                LA            NM            OK            TX                          OT            CONOCOPHILLIPS   5         4

  FG                                                      TX            WY            OT            SHELL OIL CO     4         3

  FG            LA                          OK            TX                                        NEWFIELD         4         3

  FG            LA                          OK            TX                                        KERR MCGEE O&G C 4         3

                LA                                        TX            WY            OT            MOBIL            4         3

                              NM            OK            TX                          OT            OCCIDENTAL       4         3

                LA                          OK            TX            WY                          SAMSON           4         3

                LA                          OK                          WY            OT            CABOT OIL & GAS  4         3

  FG            LA                                                                    OT            UNOCAL CORP      3         2

  FG            LA                                                                    OT            AMERADA HESS     3         2

                                                          TX            WY            OT            WESTPORT         3         2

                                            OK            TX                          OT            DOMINION         3         2

                LA                          OK            TX                                        OCEAN ENERGY INC 3         2

                              NM                                        WY            OT            WILLIAMS         3         2

                LA                                        TX                                        NOBLE ENERGY INC 2         1

                LA                                        TX                                        HUNT OIL CO      2         1

                              NM                          TX                                        PURE RESOURCES   2         1

                                                          TX                          OT            CALPINE NATURAL  2         1

                                                          TX                          OT            PIONEER NATURAL  2         1

                                            OK            TX                                        CHESAPEAKE       2         1

                LA                                        TX                                        HILCORP ENERGY   2         1

                LA                                        TX                                        HUNT PETROLEUM   2         1

                                            OK            TX                                        CIMAREX ENERGY   2         1

                                            OK            TX                                        GRUY PETROLEUM   2         1

                LA                                        TX                                        K C S RESOURCES  2         1

                              NM                                                      OT            ENERGEN          2         1

                                            OK                          WY                          QUESTAR          2         1

                                                                        WY            OT            BROWN TOM INC    2         1

                              NM                                        WY                          YATES PETROLEUM  2         1

                                                                                                                               

   Total Number                                                                                                                102
  of Excessive                                                                                                                 
  Counts                                                                                                                       
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.