This Chronicle article reports that the Commodity Futures Trading Commission has subpoenaed information from several energy companies — including Duke Energy Corp., El Paso Corp., CenterPoint Energy Inc. and Oneok Inc. — to determine more information about how storage data is compiled and reported to the Energy Department’s statistical arm, the Energy Information Administration. Dominion Resources Inc., the nation’s largest storage operator with about 28% of the U.S. storage capacity, says it is voluntarily providing information even though it has not received a subpoena.
Energy company investors follow EIA’s weekly numbers for trends on whether supplies of natural gas are plentiful or tight. The subpoenas come on the heels of a big increase in natural-gas prices last fall. Starting last October, natural-gas prices rose about 50% to $7.22 per million BTU’s in mid-December, then dropped to $6.19 per million BTUs at the beginning of 2004. Natural gas prices tend to track crude-oil prices, which are at 13-year highs. The benchmark natural-gas futures price rose 1.9 cents yesterday to settle at $6.40 per million BTUs on the New York Mercantile Exchange.
Storage operators are required to report how much working gas (i.e., gas available for withdrawal) they have injected into underground aquifers, salt caverns and depleted wells. To meet seasonal swings in demand, operators often purchase gas during the spring and summer, and then put it back into pipelines in the fall and winter. Typically, the storage operators collect fees for storing gas, and many of them also are natural-gas producers and marketers who benefit from higher prices.
The latest investigation follows the disclosure in recent years that several energy companies reported false trading volumes and prices to industry trade publications. As a result of that probe, 13 companies paid a combined $180 million to settle charges of false reporting and attempted price manipulation. For example, Enron Corp. has agreed to pay a $35 million fine, which is pending approval from Enron’s bankruptcy judge.