EIA’s estimates for state crude oil production to be helped by direct survey

Understanding how crude oil production in US key states has been affected by recent changes in crude oil prices and drilling activity is of great importance. Unfortunately, state-level production data published by the US Energy Information Administration and state agencies can differ, as EIA’s estimates anticipate and account for expected revisions to data collected by the states.

However, the need for EIA to calculate a true-up oil production volume for states will soon be replaced by a direct EIA survey of oil producers.

EIA estimates vs. state data

“EIA develops state-level production estimates for selected states based in part on state-level data. However, data published by state agencies are often incomplete when first published because of a combination of late reporting and processing delays, mainly due to the filing of production reports that do not contain all required information,” EIA said.

For example, Texas production data in the Petroleum Supply Monthly (PSM) and the Texas Railroad Commission (TRC) monthly reports published in June are virtually identical through 2013, but there is a gap between the reported data for more recent months that grows larger for months closer to the present. Data reported by TRC have evolved over time as processing and filing proceeds, with significant upward revisions in the data for recent months covered in each report as later reports are issued. EIA’s PSM estimates, which, given EIA’s effort to account for expected revisions to state agency data in its initial estimates, generally do not show large revisions as later reports are issued.

According to EIA, TRC’s initial reports tend to be low, primarily due to some reports placed in a pending file while waiting for other state reporting requirements to be satisfied, delinquent reports from oil and natural gas operators, and reports with discrepancies that take time to resolve. These issues are eventually resolved, and the production data are incorporated into TRC’s published reports, generally over the course of about 2 years.

Also importantly, EIA’s published estimates include lease condensate, while some tables that TRC provides tabulate crude oil and lease condensate separately. Condensate accounts for about 15% of the total crude oil and condensate volumes produced in Texas.

At the beginning of the monthly reporting process, EIA uses the state’s preliminary data plus the pending file from TRC as aggregated by DrillingInfo as the starting point to make production estimates. EIA also uses the first-purchaser volumes of crude oil from the EIA-182 survey, Domestic Crude Oil First Purchase Report, to make estimates of what will eventually be reported as complete production for the most recent months in an effort to account for data submitted late or incomplete to TRC.

Texas is not the only state whose data are incomplete in initial report months. A full explanation of EIA’s approach for Texas and other states can be found in EIA’s methodology report for the PSM.

New survey

The need for EIA to calculate a true-up oil production volume for states, including Texas, will soon be replaced by a direct EIA survey of oil producers, just as it currently surveys natural gas producers in its EIA-914 survey. The survey garners about 95% of produced natural gas volumes in the Lower 48 states and is expected to achieve similar results for oil production.

EIA’s monthly natural gas production survey now directly surveys producers in 15 states, 10 more than in previous years. The addition of 10 states—Arkansas, California, Colorado, Kansas, Montana, North Dakota, Ohio, Pennsylvania, Utah, and West Virginia—significantly enhances EIA’s monthly state and regional coverage, which was previously limited to Alaska, Louisiana, New Mexico, Oklahoma, Texas, Wyoming, and the Gulf of Mexico. In addition, EIA receives timely monthly production data from Alaska.

As suggested by the title of the new web site, Monthly Crude Oil and Natural Gas Production, EIA will also report survey-based volumes for crude oil production from the states covered by the new EIA-914 survey. This oil production survey, which began earlier this year, is currently being evaluated internally and will begin publication later this summer.

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