There's a great article in today's
Oil Daily about the critical importance of top-notch energy information from the US government. Why on earth have we let this capability atrophy over the past decade or so, especially as we've become ever more dependent on imported oil? Priorities, priorities...gotta fund tax giveaways to rich people, massive pork barrel spending, and of course the wonderful Iraq war! Anyway, here are some excerpts...
The importance of quality, timely data in the energy market is becoming more vital because of how quickly the industry is growing, a number of renowned experts told a US Congressional briefing panel on Thursday.
One of the major problems in recent years has been the slashing of the budget of the Energy Information Administration (EIA), the statistical wing of the Department of Energy.
Over the past decade, the EIA's budget has fallen 16.9%, while budgets for other US statistical agencies have grown. A lack of adequate data from the EIA, along with unreliable data from the rest of the world, could have severe implications for world energy markets...
The EIA was established in the mid 1970s after the first oil embargo. Some see the need for an overhaul now. "It's hard to do good analysis without good data," Matt Simmons, president of energy investment bank Simmons and Co., told the briefing panel on Thursday.
Simmons laid out the numerous flaws in the current data system worldwide: There is no accounting of field-by-field production; there is no data on depletion of fields; crude reserves data are fuzzy; demand data is only implied data...and data is very limited outside OECD countries.
Simmons argued that there is an "urgent" need to develop a system for field-by-field accounting for production and reserves...The fresh data would help stabilize all financial markets, especially the oil market.
One case of poor data hurting the energy markets and the economy occurred in 2004, when demand growth in China and Asia was underestimated and the market was caught off guard, eventually leading to soaring crude prices.
(written by Matt Piotrowski, Washington)