EIA has asked for comments on the two alternatives and on specific features of each. The first alternative would have EIA announcing any revision of 15 Bcf or more at 10:30 a.m. EST on the first federal government workday of the week, which normally would be Mondays, or Tuesday if Monday is a holiday.
In the second alternative EIA could post a warning and send out e-mails to its notification list two hours before announcing a major revision. This would occur "irrespective of whether any specific markets are in operation at the time of the revision release."
In both cases any revisions between 7-14 Bcf, or revisions greater than 7 Bcf resulting from a new estimation methodology or sample used in the estimation process, would be announced at the regular time for storage and revision announcements on Thursdays at 10:30 a.m. EST.
The government agency wants comments on whether the 15 Bcf is a good cut-off number for special announcements, whether announcements of revised storage information should be restricted to specific business hours or days because of the operating hours of various trading markets and whether a two-hour notification by web and e-mail is adequate and equitable. It asks for the pros and cons of both suggested alternatives.
The agency noted that revisions may occur because survey respondents realize after submitting data that they had made an error or they have received new information that should have been included, or because a respondent did not get its survey form into EIA on time. There also could be a reclassification of working and base gas or a change in field operating status.
EIA said there have been revisions in 10 of the 136 reports released during the time it has been doing the survey, starting May 9, 2002 through Dec. 9, 2004. Only two were above 15 Bcf, a revision of 26 Bcf of the total announced on July 3, 2002 and a 32 Bcf revision of the total announced on Nov. 24, 2004. It was the latest incident that triggered the current review of revision announcement policy.
The unexpectedly high storage withdrawal on Nov. 24 that caused prices to jump more than a dollar, was announced just hours before the December futures contract expired. The correction was not made until the following Thursday, well past the point where all December baseload gas had been negotiated and priced. In that case, however, damage would have been only partially mitigated by a faster revision, since many monthly contracts are pegged to the expiring prompt month futures contract and there would have been little time for a correction before it went off the board.
Suggestions also have been made that EIA not make any storage announcements on the day the monthly futures contract expires, which is the third-to-last business day of the month.
The EIA notice is available at http://www.eia.doe.gov/oss/WNGSR-Revision-Policy-for-Comments-Jan7-2005.pdf Comments are to be directed to William Trapmann, deadline Feb. 7. Fax at 202-586-4220 or e-mail to William.Trapmann@eia.doe.gov is recommended.
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