EIA cancels 2011 US reserves compilation as it cuts budget

Nick Snow
OGJ Washington Editor

WASHINGTON, DC, May 2 -- The US Energy Information Administration will not prepare or publish US oil and gas reserves data for 2011 as it cuts $15.2 million, or 14%, from its budget, the US Department of Energy information and analysis agency said on Apr. 29. The reductions are part of Congress’s latest continuing resolution that was signed into law by US President Barack Obama on Apr. 15. The resolution keeps the federal government running through Sept. 30.

“The lower fiscal 2011 funding level will require significant cuts in EIA's data, analysis, and forecasting activities,” EIA Administrator Richard G. Newell said. “EIA had already taken a number of decisive steps in recent years to streamline operations and enhance overall efficiency, and we will continue to do so in order to minimize the impact of these cuts at a time when both policymaker and public interest in energy issues is high.”

Newell said EIA must act quickly to realize the necessary spending reductions during fiscal 2011, which is already more than half over. Like the rest of the federal government, it was running on its fiscal 2010 budget because Congress was unable to approve one for fiscal 2011 and passed continuing resolutions to keep the government operating instead. The latest CR contained significant cuts for most federal departments in response to the mounting budget deficit.

In addition to not preparing the annual oil and gas reserves data survey, the agency said it will be necessary to curtail efforts to understand linkages between physical energy markets and financial trading; suspend analysis and reporting on the market impacts of planned refinery outages; suspend collection and dissemination of monthly state-level data on wholesale petroleum product prices including gasoline, diesel, heating oil, propane, residual fuel oil, and kerosine; and halt preparation and publication of the annual petroleum marketing data report and the fuel oil and kerosene sales report.

Further cuts
EIA said it also will suspend auditing of data submitted by major oil and gas companies and reporting on their 2010 financial performance through EIA's Financial Reporting System; reduce collection of data from gas marketers; cancel a planned increase in resources to be applied to petroleum data quality issues; and reduce data collected from smaller entities across a range of oil and gas surveys.

The agency also announced cuts in its electricity, renewables, and coal information data collection; its consumption, efficiency, and energy information activities; and its energy analysis capacity as well as live telephone support at its customer contact center. Newell said that the changes were initial steps, and that additional actions were being evaluated and may result in further adjustments to EIA’s data and analysis activities in the near future.

Responding to EIA’s announcement, US Senate Energy and Natural Resources Committee Chairman Jeff Bingaman (D-NM) said on Apr. 29 that EIA was just one of many casualties in the latest CR but added that the agency is one of the few neutral and credible oil and gas price information sources. “Right now, Americans need that sort of objective information more than ever,” he maintained.

Bingaman said as Congress approaches the next round of budget negotiations for fiscal 2012, it will need to do a better job of protecting federal programs such as EIA which are crucial to policymakers and the general public’s understanding of what is actually going on with energy supplies, demand, and markets.

Contact Nick Snow at nicks@pennwell.com.

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