# Presentation: 623005

## U.S. Weekly Natural Gas Storage Data

**United States – European  Meetings to Discuss Oil and Natural Gas Data**
- September 28, 2007
**William Trapmann**
**Natural Gas Analysis Team Leader**
**William.trapmann@eia.doe.gov**

**www.eia.doe.gov**

## Presentation Topics 

- The Role of Storage in the Natural Gas Market
- Natural Gas Storage
- EIA’s Weekly Natural Gas Storage Data Project
- Major Issues Related to WNGSR
- WNGSR Performance
- The Role of Weekly Natural Gas Storage Data
- Weekly Natural Gas Storage Data Issues

## The Role of Storage in the Natural Gas Market

## U.S. Gas Industry at a Glance

| Industry 	 | Segment	Participants | Regulatory Authority |
| --- | --- | --- |
| Producers

Gathering Systems | 6,800 U.S. oil/ gas companies;
21 majors; 300,000+ wells

130+ systems | Price decontrol completed by 1/1/93 under the Wellhead Decontrol Act
State Regulatory Commissions or FERC |
| Interstate Pipelines | 90 majors,  109+ total | FERC |
| Intrastate Pipelines | 100+	 | State Regulatory Commissions |
| Local Gas Utilities | 1,500 | State Regulatory Commissions |
| Marketers | about 300	 | Unregulated |
| Natural Gas Storage  | Underground: 133 operators (390+ Fields); LNG storage 71 operators (roughly 100 sites) | FERC if part of interstate system, State Regulatory Commissions for others |
| 
Gas Consumers | 
Residential 63.6 million
Commercial 5.2 million
Industrial 205,000
Electric Generators: 670 plants gas fired | 

Interstate commerce – FERC
Intrastate commerce – State Commissions |
|  |  |  |
|  |  |  |

## Natural Gas Data Surveys and the Industry 

***EIA-912***

*Weekly Underground Storage Report*

***EIA-914***
***EIA-895***

## Producing Basins and Regional Natural Gas Flows

- Source: Energy Information Administration,  GasTran Gas Transportation Information System** **

**Producing Basins and Regional ****Natural Gas Flows**

## Gas Demand Varies Seasonally During the Year(Billion Cubic Feet per Month)

**Electric Power**

**Gas Demand Varies Seasonally During the Year****(Billion Cubic Feet per Month)**

- Source: *Monthly Energy Review,* August 2007

**Residential**

**Industrial**

**Commercial**

## Monthly Consumption, Production and Net Imports

**Consumption**

**Net Imports**

**Production**

| Consumption | Total
Tcf | Daily
Bcf/d |
| --- | --- | --- |
| 2006 | 21.82 | 59.8 |
| 2007 | 22.69 | 62.2 |
| 2008 | 22.98 | 62.7 |

- Source: EIA, *Short-Term Energy Outlook*, August 2007

## Natural Gas Storage

## Storage Reservoirs by Type

**Storage Reservoirs by Type**

## Storage Terms

- _Base Gas_:  volume of gas needed as permanent inventory in a storage reservoir to maintain adequate pressure and deliverability rates throughout the withdrawal season.
- _Working Gas_:  volume of gas in the reservoir above the designated level of the base gas.  It is gas that is temporarily stored in a reservoir with the purpose of being withdrawn at a future date.

**Storage Terms**

## Underground Natural Gas Storage Facilities in the Lower 48 States

- Note:  Aquifers in the Producing Region have been displayed as depleted oil/gas fields to preserve data confidentiality.

**Underground Natural Gas Storage Facilities in the Lower 48 States**

## Natural Gas Storage 

- Smoothes domestic production of gas throughout the year by enabling storage refill during periods of low demand
- Withdrawals help satisfy sudden increases in demand or supply declines caused by weather or other factors
- Support pipeline and hub operations—e.g., peak day service and load balancing

**Natural Gas Storage**** **

## Current Natural Gas Stocks Remain Above The 5-Year Range

**Current Natural Gas Stocks Remain Above ****The 5-Year Range**

**Working Natural Gas Stocks**

**Note: The shaded area represents the minimum and maximum values from 2002-2006.**
**Source:  Energy Information Administration, *****Weekly Natural Gas Storage Report*****.**

## EIA’s Weekly Natural Gas Storage Project

## EIA Weekly Storage Survey

- Objective: to provide weekly estimates of natural gas stocks for the Nation and by region
- Form EIA-912, “Weekly Underground Natural Gas Storage Report”
- Response is mandatory under Federal law
- Collect working gas in storage by company by three regions
- Sample survey – currently about 65 respondents drawn from EIA-191 census survey population
- Sample drawn such that the standard error would be no more than 5 percent for any region or the total
- Volume coverage is at least 90 percent in each region
- Forms due by 5:00 p.m. Monday for previous Friday
- Primary dissemination via Internet posting

## Development Project Milestones

- October 2001:   Project begins
- November: 		Working meetings with AGA
- December: 		Submit clearance package to OMB
- January 2002:   OMB clearance
- Feb/Mar:     		System development and testing
-                           Sample design and selection
-                           Notification of respondents
- April:          		Operational testing
- May:				Initial data release
- 					Methodology Report
- 					Comparative Assessment Report

## WNGSR Project Chronology

- May 9, 2002: First release of WNGSR
- May-July 2002: Revisions occur in 5 of the first 10 weeks
- November 2002: Federal Register notice (FRN) to announce revision policy
- October 2003: Methodology change
- July 2004: New sample
- November 2004: Large revision (the perfect storm)
- April 2005: FRN to announce new revision policy
- May 2005: New revision policy takes effect
- August 2005: Methodology change
- Sept 2007: WNGSR accepted by OMB as a Principal Economic Indicator for 2008
- Sept 2007: EIA announces redesign and new release procedure for WNGSR

## Major Issues Related to WNGSR

- Security issues
- Operational procedures and issues
- Release time and day
- Revision policy
- Data quality

## Security Is a Dominant Factor  

-  The storage data are highly sensitive given their timely nature and commercial value
- All compilation and processing are conducted in a secure work room
- Data collection – data are collected under the Confidential Information Protection and Statistical Efficiency Act (CIPSEA)
-  No disclosure of individual company identification or data – except with consent of the companies
- Standard distribution is limited to team members only
-  Conforms to policies established by the Office of Management and Budget for Principal Economic Indicators

## Operational Procedures and Issues Focus on Timeliness, Quality, and Security 

- Survey forms are collected via FAX or e-mail (written copies are essential)
- Initial quality checks on data
- Estimation meeting on the day prior to release – includes rigorous quality checks
- Non-response by sample companies – imputation
- Questionable/suspect data are identified for followup
- Estimates are established on the day prior to release
- Pre-release status check
- Release – secure delivery of files for posting

## Release Time and Day Were Established To Accommodate Various Interests

- Standard release: 10:30 a.m. on Thursday
- Occurs during floor trading on the New York Mercantile Exchange (NYMEX)
- Before the end of spot trading for the day (approximately 12:30 p.m. Eastern Time)

## Public Comments Were Received Prior To Establishing the Revision Policy

- Revisions to previously published data may occur for various reasons including resubmissions from respondents and late submissions from respondents
- Changes that total 7 billion cubic feet (Bcf) [about 200 million cubic meters (mcm)] or more for any region or total Lower 48 States trigger a revision
- All revisions to date have been reported in the next scheduled release
- Changes of 10 Bcf [about 283 mcm] or more can trigger an out-of-cycle release – this policy became effective on May 19, 2005

## Data Quality Is an Ongoing Concern

- The weekly natural gas storage data are subjected to considerable scrutiny by EIA – submissions are evaluated with respect to individual company trends and relative to other companies
- Other relevant information such as weather reports and expectations of others are considered also
- EIA continually monitors survey performance
- Weekly, monthly, and annual storage data are compared with respect to anomalous patterns or inconsistent results—e.g., stocks exceeding capacity

## WNGSR Performance

## Natural Gas Stocks Are Estimated With A Relatively Small Sampling Error

**Natural Gas Stocks Are Estimated With ****A Relatively Small Sampling Error**

**Note:  Coefficient of variation equals the ratio of the standard error divided by the mean.**
**Source:  Energy Information Administration, *****Weekly Natural Gas Storage Report*****.**

| Month | Mean | Standard Error | Coefficient of Variation |
| --- | --- | --- | --- |
| July-06 | 3311 | 59 | 1.79% |
| August-06 | 3435 | 61 | 1.77% |
| September-06 | 3226 | 54 | 1.69% |
| October-06 | 3065 | 53 | 1.72% |
| November-06 | 2561 | 42 | 1.66% |
| December-06 | 1622 | 26 | 1.59% |
| January-07 | 1512 | 24 | 1.58% |
| February-07 | 1746 | 28 | 1.63% |
| March-07 | 2162 | 35 | 1.63% |
| April-07 | 2522 | 41 | 1.62% |
| May-07 | 2839 | 45 | 1.59% |
| June-07 | 2968 | 44 | 1.49% |

## EIA Monthly Storage Survey

- Form EIA-191, “Monthly Underground Gas Storage Report”
- Census survey, not a sample
- Reported by storage operators
- Almost 400 individual underground storage fields
- Approximately 2-month lag from report month to publication
- Provides the population frame for the weekly sample

## Volume Differences Between Weekly and Monthly Natural Gas Storage Data

- Source: EIA, Natural Gas Division.

## Percentage Differences Between the Weekly and Monthly Natural Gas Storage Data

- Source: EIA, Natural Gas Division.

## The Role of Weekly Natural Gas Storage Data 

## Weekly Natural Gas Storage Data Serves A Number of Roles in the Industry

- Storage operators and others in the industry rely on the weekly data to understand the status of this critical supply element
- Industry analysts use weekly storage as an indicator of relative supply and demand
- Financial traders use the information to establish their trading positions

## Weekly Natural Gas Storage Data Can Have a Significant Impact on Trading

**Source: INO.com **

**EIA released the WNGSR at 10:30**

## Weekly Natural Gas Storage Data Issues

## EIA Provides as Much Data As Possible Without Disclosing Company Data

- Release schedule
- Methodology documentation
- Historical data: weekly stock data and 5-year statistics
- Revision policy
- Comparison of weekly and monthly data
- Background information on storage

## How “Full” Is Storage?Not a Straightforward Concept

- There are at least three ways to measure full, and each yields a different value
- One can measure full as working gas stocks as a percentage of
-  Design capacity
-  Working gas capacity
-  Historical maxima
- EIA does not report a measure of “full”
- EIA has published a report with a “conservative” estimate of useable storage capacity

## Methodology:Estimation and Quality Issues

- Extrapolation method: the sum of working gas reported by respondents multiplied by a scale factor
- Refined extrapolation method (Oct-03): similar to the first method, but certain respondent companies were not included in the extrapolation
- Model-based method (Aug-05): Non-respondent companies are estimated on an individual company basis based on recent monthly stocks and individual company measure of variation
- The methodology documentation is located at: _[http://tonto.eia.doe.gov/oog/info/ngs/methodology.html](http://tonto.eia.doe.gov/oog/info/ngs/methodology.html)__._

## www.eia.doe.gov

**www.eia.doe.gov**

**www.eia.doe.gov**