February 13, 2016 - 8:19 PM EST
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How much oil does Oklahoma produce?

Feb. 14--Energy companies in

have produced about 100,000 barrels of oil per day more than previously reported over the past year, according to a new survey released by the U.S. Energy Information Administration.

The new numbers boost oil production in the state 25 to 30 percent.

"The data coming out of the tax commission are not easy to interpret at this point," Stephen J. Harvey, assistant administrator of the U.S. Energy Information Administration Office of Energy Statistics, said this month during an interview at The Oklahoman. "We just had to decide whether we believe ours or theirs."

After months of trying to reconcile oil production data from the Oklahoma Tax Commission, the EIA gave up, declaring its numbers better and more accurate than those collected and produced by the state.

The state tax commission knows its production numbers are incomplete, but said tax information is collected and reported properly. The commission blames the bad production numbers on an outdated computer system scheduled to be updated by this time next year.

"Our key focus is on making sure we're collecting the appropriate amount of tax," tax commission spokeswoman Paula Ross said.

Gross production tax data is reported by the first purchasers of oil and natural gas.

"We are not doing tax collections off the production data," Ross said. "It's a separate process as far as how we go through and verify and correlate tax data with the production volumes."

Companies report production data into the tax commission's 30-year-old mainframe computer system. If there are any errors, the report is held in a suspended return, Ross said.

"Suspended returns have to be manually reworked," she said. "Although we get the information, it won't all be in the database to be downloaded."

The tax commission is three years into a four-year computer upgrade project that Ross said will fix the oil production reporting problem by early next year.

"The old system was a mainframe system, which was becoming difficult to use," Ross said. "Companies have been having a hard time with their software reporting the data. We are aware of it, but we had to have the money and time to implement the new system."

Accurate numbers needed

Besides tax collections, oil production also is used by companies, economists and researchers to project future budgets, oil production over time and other reports.

"For a whole host of reasons, it would be important to have a reliable and accurate estimate of production by county over time," said Russell Evans, executive director of the Steven C. Agee Economic Research and Policy Institute at Oklahoma City University. "If in fact we are not getting reliable, accurate estimates of volumetric production by county over time, then it would be helpful to have that problem resolved as quickly as possible so we can use that information to better understand important research questions."

Production data also is used by companies when deciding when, where and how aggressively to drill, said A.J. Ferate, vice president of regulatory affairs as the Oklahoma Independent Petroleum Association.

"Fortunately, this is simply an estimate and doesn't bring about any legal concerns or questions or anything like that," Ferate said. "But what it does is show that

is doing much better compared to its peers than we previously thought. That is a good thing to know that
has stronger production than we realized."

With low oil prices and concerns of oversupplies, however, it's important for companies to know how much oil is being produced in each region, Ferate said.

Reporting methods

Until last year, the EIA relied on state agencies for its production data throughout the country. But the state systems took time to collect and update the numbers. The feds needed more timely information to keep up with rapidly evolving domestic and global oil markets.

"The problem is that all state data, because it's coming through some kind of authority, builds up over time," Harvey said. "It isn't fully right the first month that you want to be able to publish it. To get it on a timely basis, in the past, we would do modeling to that data to estimate where we thought the state was going to come out, and we would use that."

The new EIA survey roughly matched numbers reported over time in 15 of the 16 oil producing states. But in

, the federal data consistently showed oil production 25 percent to 30 percent greater than what the state reported.

"We couldn't figure out the discrepancy on what we were picking up from the survey for oil production in

with what we were able to estimate based on the tax receipt information from the tax commission," Harvey said.

"We kept trying to figure it out."

The EIA conducted other samples and bought data from private data firms, all of which supported the EIA numbers over what the tax commission was producing, Harvey said.

"We eventually came to the conclusion that we weren't going to figure it out, but that for a variety of reasons we believe the survey data more than the estimates based on the state taxation data," he said.

"So we switched at the end of December."

EIA on Jan. 30 reported the country's oil production in November. The updated report showed producers in

to have recovered about 403,000 barrels of oil per day, or about 100,000 barrels per day more than reported by the previous methodology.

The discrepancy has little effect on national reporting numbers, but could be significant in

, Harvey said.


production is a little higher than we thought. It's not material at
the United States
as a whole level. It's within our margin of error for the entire
, but it is a little higher than we thought. But obviously for
, it looks like there's a lot more production in


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