(December 2011) Iberdrola USA names new vice presidents; Michigan Governor appoints new commission chair; AGA and INGAA name new chief executives; plus senior staff changes at American...
The High-Stakes Storage Gamble
point, has been to provide reliable aggregated weekly storage estimates solely to the storage operators who provide Gasfax with inventory data on a weekly basis.
Energy Reporting Network declines to build a presence on the Web. (Go ahead and try searching on Google for either Energy Reporting Network or Gasfax and I guarantee you'll come up empty.) The company's Houston telephone number is unlisted. (The first words out of Energy Reporting Network President Gil Higgins' mouth when I rang to interview him were, "How did you get my phone number." Sorry, reporter ethics prevent me from burning my source of Gasfax's number.)
And, despite AGA choosing to exit the storage data market, Higgins isn't chomping at the bit at the perfect opportunity to grab a larger share of the weekly storage data market.
Going back to 1989, Higgins had conversations with enough people in the gas industry to convince him there wasn't timely gas supply data available during certain periods when circumstances demanded a quick look at supply indicators, especially in times of freeze-offs or tropical storms in major Gulf Coast producing areas. That year, he decided to develop a service that would measure storage levels as well as other supply indicators, including production rates, liquefied natural gas stores, and import levels.
Higgins says it took his company at least a year to get the storage survey in shape to launch. Among others, he consulted with the American Petroleum Institute to learn about the methodology the oil industry had used for years to conduct its weekly crude oil and petroleum products surveys.
Next, Higgins signed an agreement with accounting firm KPMG Peat Marwick to serve as the middleman between Gasfax and the storage operators. All of the weekly data gets sent first to KPMG starting on Thursday mornings, which then tabulates the data and delivers it to Gasfax by Monday.
For AGA's survey, storage operators fax their storage level data directly to AGA's offices in Washington starting Friday and continuing through Wednesday morning. AGA has an outside accountant who comes into its offices to tabulate the results each Wednesday afternoon.
Using KPMG as the auditor means Gasfax does not have the ability, and will not be tempted, to associate a storage level with a particular company. This focus on anonymity has been an important practice for Gasfax in gaining the trust of the reporting companies who have grown increasingly protective of their storage data as the industry has restructured and grown more competitive.
"We use KPMG because we don't want to know the individual company data," Higgins says. "We're careful about what we do. Everyone knows we are careful."
Instead of dividing its results into three regions, as AGA formats its survey, Gasfax's weekly data show storage levels for seven regions across the United States and Canada, as well as a total aggregate level. Canadian storage located in British Columbia, Alberta, and Saskatchewan is included in Gasfax's Western region, while all Canadian storage from Manitoba eastward is included in Gasfax's Region 2, which includes such states as Michigan and Illinois, where there