As North Dakota's oil production began rising two years ago, a shortage of pipeline space helped drive down prices, costing producers more than $200 million, industry officials and a new report say.

North Dakota's Office of Management and Budget, in a report presented to state legislators Tuesday, estimated the oil price "discounts" cost North Dakota's treasury $16.6 million in tax collections from December 2005 through April 2007.

Calculations from the report's data show oil producers themselves lost at least $211.4 million during the same period. The figures used the amount of taxable barrels of oil produced each month, multiplied by the state budget office's calculation of the average monthly discount.

Ron Ness, president of the North Dakota Petroleum Council, said Tuesday the figures were similar to the industry's own estimates of lost revenue.

The problem has begun to abate, helped by recent capacity expansions of oil pipelines that carry North Dakota crude, Ness said. If there is less pipeline space to transport oil to refineries than there is oil to sell, buyers of crude can demand reductions in its price.

"We will still be seeing a spike (in discounts) here and there as production varies, but the panic has subsided substantially over the last three to five months," Ness said.

Pam Sharp, the state budget director, said North Dakota oil usually sells at a 10 percent discount to the price quoted for West Texas Intermediate crude on the New York Mercantile Exchange, which is a commodity futures market.

The OMB report compared the average monthly price per barrel of North Dakota crude with 90 percent of the Nymex price. The comparison was done for each of the 24 months in state government's 2005-07 budget cycle.

For 17 of the 24 months, the North Dakota crude sold for less than the benchmark of 90 percent of the Nymex price, the report says. The discounts ranged from 68 cents to $11.43 a barrel, and hovered above $2 a barrel for most of the period.

Sharp presented the report Tuesday to the Legislature's Budget Section, an interim committee that includes legislative leaders and members of the North Dakota House and Senate appropriations committees.

She said the budget office calculated North Dakota's tax loss by applying an average tax rate to discounted monthly average prices. In March 2006 alone, the discounts meant $3.03 million less in oil tax collections, the agency report said.