are, in some areas, unavailable. OEIA has made a beginning in fulfilling its responsibilities in this area, but it is too early to tell how successful it will be. Government policies and procedures in verifying and auditing energy data are illustrated in the following discussions of the main energy data gathering agencies. FEA's Office of Compliance is responsible for verifying data collected under its price-regulating programs. The soundness of FEA's audits has been questioned in a July 1977 report prepared for the FEA Administrator by the Task Force on Compliance and Enforcement. Although OE IA was meant to have a central role in assuring the accuracy and credibility of energy data. it has no auditors of its own and has made only token use of the auditing capability of the Office of Compliance. OEIA officials said (1) a separate division for the data validation function had been established, (2) a data validation program had been developed, and (3) a contract to validate six data systems had been awarded on September 27, 1977. The Bureau of Mines collects a considerable amount of energy data. Some of it is collected under FEA's mandatory reporting requirements. The Bureau does not audit the data it collects. Verification work consists primarily of a program of editing data and checking its reasonableness. The Bureau of Power, Federal Power Commission (FPC), obtains financial data from private and public power companies and generally reviews it for proper account classification, relationships between figures, and overall statistical patterns. FPC's Office of Chief Accountant examines and tests source documentation supporting the financial data reported, examines unusual balances reported, and performs tests of reasonableness on the balances reported for a specific group of accounts. FPC's Bureau of Natural Gas reviews data for reasonableness and consistency. Also, it performs eight or nine independent tests a year of natural gas reserve estimates for specific fields. Typical data verification procedures of the Energy Research and Development Administration (ERDA) include computer editing processes, comparability testing, and contact with company officials to resolve questions concerning reported data. OEIA efforts to develop adequate and comparable energy data and identify gaps and minimize duplication in Federal energy data collection systems have mainly consisted of (1) conducting an inventory of Federal energy data gathering programs, (2) participating as a lead agency in a joint project with the Federal Interagency Council on Energy Information to develop standard definitions for energy data terms, and (3) reviewing and approving forms FEA sends to industry to collect data relevant to its regulatory programs. In its inventory of Federal energy data gathering activities, OEIA determines which agencies are collecting what information, for what reason, and with what verification. OEIA has contracted with the consulting firm of Booz, Allen, and Hamilton, Inc.. to analyze the responses. OEIA said it lacked the personnel to perform this task. The increased demand for energy information that followed the oil embargo brought to light a problem. Values reported for what appeared to be the same data items varied widely. The language of energy and energy data collection was imprecise, and in important instances, undefined; data collection procedures were vague; and the energy information collection, analysis, and reporting community was fragmented. A Federal Interagency Council on Energy Information task group chaired by an OEIA official has recently completed a plan for developing a comprehensive set of energy data standards for all Federal collection and publication activities. Since the Council is an advisory body with no power to enforce its recommendations. its Chairman has recommended giving the new Department of Energy permanent responsibility for an effective energy data information standards program. (See Ch. 3.) OEIA NOT INDEPENDENT OF OEIA has not been independent from the energy policy function nor was it managed and operated in a manner conducive to promoting credibility. OEIA's senior managers have been constantly torn between the competing pressures of satisfying requests from "their bosses"--(1) the energy policymakers in FEA and (2) the energy policy and planning staff of the Executive Office of the President--and doing what was necessary to earn the confidence of energy experts and the general public. For the most part, OEIA officials devoted their limited analytical resources to providing the quick analytical responses requested by the energy policy and planning staff which was responsible for developing the President's National Energy Plan. The primary analytical tool used by OEIA to make detailed forecasts of the energy sector is a set of predictive energy models called the Project Independence Evaluation System (PIES). For the most part, requests from both the energy policy and planning staff and congressional staffs were communicated directly to individual GEIA analysts who, in turn, furnished the resulting analytical product directly to the requestor. Because so much of OEIA's analytical efforts were carried out on an ad hoc basis, no records of the specific requests or of products furnished by OEIA were maintained. Further. OEIA, with the exception of the Office of Data Services, did not have any type of comprehensive project or staff accountability system. As a result, FEA and OEIA managers cannot determine resources allocated to specific OEIA analysis projects. assign priorities to existing projects, or effectively plan for future resource requirements. In July 1977. the Office of Data Services' resource accountability system was adopted throughout OEIA. The high priority and large amount of analytical resources OEIA devoted to performing analyses requested by the energy policy and planning staff detracted from its ability to perform the analyses and forecasts for the general public that the Congress intended. The In 1975, FEA published projections of energy demand and supply for specific fuels under various assumptions in the Project Independence report. These forecasts were refined and updated in the 1976 National Energy Outlook (NEO). 1976 National Energy Outlook was widely circulated and, to most of the public active in energy matters, it represented OEIA's most significant work. Even though a draft of the 1977 National Energy Outlook dated January 19, 1977, had been circulated for public comment, the Assistant Administrator in charge of OEIA stated that it could not be completed and published because his analytical resources were devoted to responding to requests from the President's energy policy and planning staff and the Congress. The draft 1977 NEO presented many different energy alternatives, taking into account different policy options available to the Federal Government to influence market price and fuel consumption, and left the reader to choose the best alternative. However, it was never published and instead the public received the National Energy Plan--clearly 34-747 O - 79 - 92 a policy document of the Executive Office. The development of the National Energy Plan interfered with other publications as well. Efforts to refine internal working papers so they could be issued as technical reports were abandoned so that resources could be devoted to the Plan. By applying the bulk of its analytical resources to policy-related work in support of the President's energy plan, OEIA devoted substantially fewer staff than they otherwise could have to developing and making publicly available adequate, accurate, comparable, and credible energy data and analyses called for by the Congress. (See Ch. 4.) CREDIBILITY OF ENERGY The credibility of analytical products and forecasts depends not only on the accuracy of data, but also on the fundamental soundness of the tools used to analyze it. The primary analytical tools used by OEIA are mathematical energy models of a sector or sectors of the energy market. The credibility of models begins with documenting and verifying the process that creates them and continues with validating and testing the models' final products. From this initial base, credibility grows as potential users--in this case, Federal and State agencies. universities, research centers, energy firms, etc.--perceive that the models are sound and can be used with ease and confidence. As users gain access to, and knowledge of, the models, they will acquire an understanding of the models' capabilities and limitations resulting in both improvements to the models and expansion of their credibility. The credibility of OEIA's models has not been established because documentation, verification, and validation have been neglected. Furthermore, publications describing the current models are scarce, and procedures for public access to them are almost nonexistent. As a result, it is practically impossible for interested parties outside of FEA to know whether OEIA's current models have been constructed properly and used correctly and thus whether OEIA's analytical products and forecasts can be used with confidence. The most important of the analytical tools used by OEIA is PIES. By adjusting certain assumptions, PIES will produce alternate forecasts which can be used to evaluate a wide range of energy issues. Most of the analytical work requested by the energy policy and planning staff involved forecasting energy supply and demand under alternative assumptions. While doing this work, OEIA changed certain of the assumptions upon which long-term forecasts were based. OEIA subsequently adopted into its model, as the base for future forecasts, major economic changes recommended by the Administration's energy policy and planning staff. OEIA's credibility was adversely affected by a failure to make available to the public the results of all its forecasts and the source and rationale for the assumptions upon which the changes to the model were based. Moreover, OEIA failed to insure the integrity of the model by not obtaining the views of modeling and energy experts outside of FEA regarding the model's assumptions and the appropriateness of the changes. ACTIONS NEEDED The reorganization and consolidation of major Federal energy data gathering, analyzing, and reporting activities into the Energy Information Administration, Department of Energy, presents an excellent opportunity to correct the shortcomings discussed above. Here are some types of actions PART thinks should be taken. --Assign staff and responsibility for the task of --Insure that the Energy Information Administration |