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A major factor in energy consumption over the next decade is the elasticity of demand with respect to changes in relative prices. While there are many data collection systems which produce measures of prices at different stages of the energy productionconsumption process, they are not clearly interrelated nor do they necessarily fit into an overall framework. EIA and BLS should inaugurate a task force to explore the adequacy of existing energy price data for this purpose and to determine whether new series should be constructed.
respect. Costs associated with reclamation, particularly for strip mining, are essential given the increased emphasis on the environmental impact of extraction. Even for coal shipments the data available are not of sufficient quality. Monthly coal production, which is largely estimated by freight car loadings, has been subject to significant revisions recently, and the EIA should examine alternative strategies to collect such data.
For natural gas, the data on intrastate prices is not now collected by the Federal Government. Yet the deregulation and natural gas curtailment debates would benefit significantly from such information. EIA and FERC should take steps to evaluate the quality of available private and State data sources and to determine whether they are adequate to the Federal Government's needs.
Even for petroleum refineries, the data on prices is insufficient for analytical purposes. At present, the Federal Government relies on Platts' spot prices which may not be adequate. EIA should attempt to convert the regulatory data or to develop a statistical system to obtain price data consistent with other refinery data systems and price indexes presently in existence.
Concerns are raised in definition and classifications in several aspects of energy supply. Perhaps the most important step is to agree on one definition of reserves of oil and gas. Mention has also been made above of new cooperative efforts involving EIA Customs, and the Census Bureau to improve the information on bulk petroleum imports. These agencies must now get together on a common classification system of the products which are imported. The concept of petroleum inventories in bulk terminals is not yet clearly defined. For instance, inventories may be counted twice, once as reported by the pipeline and once by the bulk terminal which has contracted for a shipment not yet received. The Federal Interagency Council on Energy Information has been exploring standard terminology and definitions.
Information on reserves of oil and gas are collected by several Government agencies. Efforts are underway to develop a coordinated approach to these programs wherever possible. It is clear that the Federal Government should collect such data on an annual basis. Net additions to reserves indicate the success or failure of policies to encourage exploration and secondary recovery, and can indicate the extent to which the level of proved reserves responds to changes in prices received at the wellhead.
Transportation of energy is not well measured except for interstate natural gas pipelines by FPC and oil pipelines by Bureau of Mines. For planning purposes, it is important to know how energy is transported across State lines. Certain information is available on shipments between Petroleum Administration for Defense (PAD) districts, but these districts encompass several States and data on intra-PAD petroleum product transportation is not known.
Finally, in transportation, more knowledge is needed concerning the costs associated with transportation of energy to assess the cost of providing for final use demands and to assist regional and State planning. Some method for determining the quantities and the origin-destination of these shipments is needed.
Energy data are the most fully developed in the production phase of the cycle. Still, some improvements can be made. Better measurements of efficiency, costs, and productivity are needed for petroleum, gas, and coal industries. These phenomena depend on the surface and subsurface conditions in the field, for example slope and sulfur content are important factors. The petroleum reporting system and the coal reporting systems should be improved in this
Other energy sources are less well covered than are coal, oil, gas, and uranium. New sources of energy, mainly solar energy, are largely unexplored areas. While research and development is well documented, the production of solar energy units, their capacities and performance characteristics, and demand are only guesses at the present time. Residential and commercial heating and cooling potential of solar energy has been studied only marginally. The possibilities for geothermal energy must be examined. DOE should be encouraged to develop a solar and geothermal energy statistics program.
The possibility of shortage of particular types of fuel requires the ability to monitor the demand for, as well as the supplies and inventories of, fuel types. While shortages in the past have been monitored largely on an ad hoc basis, a standby data system to monitor such energy emergencies as coal strikes, electricity shortages, and petroleum embargoes has been developed by EIA.
Organization and Coordination of Energy
• Credibility of published statistics. This is a
complex problem not unrelated to the ability to compel responses and to conduct an independent audit of the data. Credibility is endangered if those involved in the collection and factual reporting of results are not in some way independent of the Federal Government's energy policymaking establishment, since some people are concerned that the published results may be biased to support a particular policy point of view. The Department of Energy Organization Act established the Energy Information Administration as an independent arm of DOE and stripped its policy roles, based on the model of the Bureau of Labor Statistics
within the Labor Department. • Confidentiality. Confidentiality of company
information has been cited as a problem leading to duplication of data collection activities. This refers to the fact that some agencies cannot disclose identifiable data to other agencies because of the disclosure restrictions of their own laws or the Freedom of Information Act, or because confidentiality was pledged to companies in order to obtain the data. Timeliness. GAO has noted that the published data are not available on a timely basis for decisionmaking. While this may be true, an acceleration of publication would be accomplished only at the risk of inaccuracies to be revealed with after-the-fact verification of the data. Most data users are not well prepared for the revisions which might be necessary to achieve more prompt publication.
Energy information activities of the Federal Government have been performed by many agencies with different mandates. The General Accounting Office (GAO) estimated that, as of July 1975, there were 261 separate Federal energy or energy-related information programs being conducted by 44 Federal agencies or bureaus with 98 separate computerized data files containing energy data. At least twenty energy related bills have been enacted into law since the start of 1974 and many of those have included specific mandates for energy data programs. The most important of these bills are the Federal Energy Administration Act of 1974, the Energy Supply and Environmental Coordination Act of 1974 (ESECA), the Energy Policy and Conservation Act (EPCA), and the Energy Conservation and Production Act (ECPA) and the Department of Energy Organization Act. Many of the requirements and programs were entirely new or major expansions of existing programs.
Congress has perceived energy statistical efforts to be fragmented and uncoordinated, overlapping and duplicative, and yet not adequate to serve the Federal Government's informational needs. GAO has reviewed the situation several times, including a February 1974 report entitled Actions Needed to Improve Federal Efforts in Collecting, Analyzing, and Reporting Energy Data and in an update (March 1976) of that study for hearings before the Senate Committee on Interior and Insular Affairs.
This emphasis on and attention to the energy information programs of the Federal Government has resulted from a perception of several problems associated with obtaining reliable statistics. While these problems are not unique to energy statistics, they are perhaps more acutely felt there than in some other areas. The problems which have been identified characterize data on both the industrial and residential sectors and are as follows: • Voluntary v. mandatory reporting. The Bureau
of Mines collected much of its data on a voluntary basis. Many people viewed this arrangement as unsatisfactory. Public policy and industry interest often conflict and information submitted by industry with no penalties for inaccurate responses or nonresponse may be unreliable. This has led to an extensive grant of mandatory authority to EIA to collect and verify the data.
• Data definitions. A great deal remains to be
done to improve the consistency of data definitions used by various agencies. This is not a question which can be easily resolved. It has to be addressed on a system-by-system basis. The Federal Interagency Council on Energy Information has a task force working on data definitions, but it will require extensive study and cooperation, and perhaps changes in law,
to make significant progress here. • Adequacy and completeness. Several areas have
been identified above in which data are neither adequate nor complete. An important part of correcting this problem is to identify their
informational requirements. • Basic Analysis. Finally, analysis of basic data
must be separated from interpretation of the results for policy implications. In addition, several agencies analyze the same phenomena
with different methodologies and come to
different results. A more recent report on energy information activities was issued by the Professional Audit Review Team of GAO. This report, entitled Activities of the Office of Energy Information and Analysis, was published in December of 1977. The Professional Audit and Review Team is required by statute to make an annual evaluation of the Energy Information Administration. It is a unique form of GAO evaluation in that most members of the team are professionals in statistical and analytical work in other agencies such as the Census Bureau, Bureau of Labor Statistics, and Council of Economic Advisors.
This most recent evaluation by GAO reached four major conclusions concerning the work of the Office of Energy Information and Analysis (OEIA), FEA (now EIA in DOE). The first conclusion was that OEIA had made only limited progress toward meeting legislative requirements or goals for credible energy information and analysis. A second conclusion was that the accuracy of most energy data is undetermined. The other conclusions were that OEIA was not sufficiently independent of the energy policy function and that the credibility of energy models had not been established.
The GAO evaluations and general concerns of Congress led to establishment of several features in the Energy Information Administration aimed at correcting the problems. The agency and its administrator were given statutory responsibility to operate as an independent and objective statistical agency. The Department of Energy Organization Act and related conference report clearly provides for the Administrator to exercise his independent professional judgment on methodologies to use, on statistical and technical reports to issue, and on what
data collection and analysis work to include in his core program.
Another feature of EIA is its broad responsibility to collect administrative and regulatory data for DOE in addition to serving as the statistical center. The purpose of this responsibility is to eliminate duplication and overlap in energy information programs. To facilitate this function, EIA was also required to provide any data in their possession to any other agency that requested it in DOE. This feature complicates the issue of treating some data confidentially. DOE has conducted public hearings on alternative policies they could use on confidential treatment of data and still has the issue under consideration.
A third feature of EIA is that it is both the statistical center and the analytical center to DOE. The Office of Applied Analysis in EIA carries on an extensive program of model development, analytical studies and forecasting related to supply, use and prices of energy and microeconomic issues involving the structure, financing, competitiveness, and regulation of the energy industries.
A unique feature of EIA is the focal attention provided for continued evaluation and audit of the programs. The Professional Audit Review Team is responsible for external evaluation while the Office of Energy Information Validation was formed to provide a strong program for improving data quality within EIA. This office is to assure that organizational independence and high priority attention would be given to verifying and validating the accuracy of data collected by EIA, auditing energy information systems in general, performing special audits as necessary, evaluating new data system designs from a data validation perspective, and serving as a strong energy data standards advocate.
Chapter 7. FINANCIAL STATISTICS
Financial statistics may be broadly defined as those associated with private and public money and credit transactions. They cover the banking system, the nonbank investment community such as securities and mortgage markets, and income and balance sheet information on households, business, and governments.
This chapter focuses on financial information on domestic and international economic activity, although with major concentration on domestic activity. International economic transactions associated with the balance of payments and foreign direct investment are covered in the chapter on economic accounts. The programs in this chapter include:
1. Flow of funds accounts of the Federal Reserve
2. Statistics of Income data of the Internal
3. Industry financial data of the Federal Trade
Commission, and 4. A broad grouping of banking, credit, securities,
and government financial statistics provided by
a number of Federal agencies. The recently completed Gross National Product Data Improvement Project included several recommendations for strengthening financial statistics. For a more extended discussion of this study of the GNP data base, see the chapter on economic accounts.
development of projections of sources and uses of funds that are consistent with anticipated trends in the economic accounts, including alternative growth paths of the gross national product, as one analytic tool in the formulation of monetary policy.
Other major short-term uses of financial statistics include the Treasury Department's management of the Federal debt. This involves the continuous refinancing of maturing bills, notes and bonds and the financing of new borrowings at interest rates that clear the market in a pattern that is consistent with overall fiscal and monetary policies. Financial statistics also provide current information on government expenditures and revenues for analyzing and developing fiscal tax and spending policies. These address alternative mixes of the total amounts of fiscal stimulus or restraint, varying types of taxes and spending, and the timing of their implementation.
Major long-term uses of these data are associated with evaluating alternative proposals for tax and welfare reform. An important aspect of this work involves assessments of the effect of changes in tax laws on the income of demographic and business groups as well as their effect on governmental expenditures and revenues. Other long-term uses include projections of private and public sector capital requirements and the capacity to finance large-scale national programs such as those for protecting the environment and dealing with energy shortages.
These data are important to a number of Federal agencies. The Council of Economic Advisers, Federal Reserve Board, Treasury Department, and Office of Management and Budget use this information for macroeconomic policymaking. The Departments of Commerce, Housing and Urban Development, and Health, Education, and Welfare, as well as the agencies noted above, also use these data for special sectoral analyses such as housing markets and for studies and policy formulations affecting the financial implications of the longer run structural issues of tax and welfare reform, pollution abatement, etc. The data on household and business incomes are also used by the Department of Commerce in the preparation of the economic accounts.
Uses and Users
Financial data reflect the quintessence of the money economy. They provide the measuring rod for valuing income, production and wealth, summarize investment incentives of the private sector, and depict the basic vehicle for practically all economic transactions of households, businesses and governments. This is exemplified by the Federal Reserve Board's flow of funds accounts as the financial extension and counterpart of the nonfinancial income and expenditures of the national economic accounts. The flow of funds are used in the