EIA expects that lower-48 States Oil production in 2005 will decline by 340,000 bbl/d from 2004 levels, to 4.17 million bbl/d. For 2006, an increase of 400,000 bbl/d is expected. Much of the 2005 reduction and 2006 rebound is due to the disruption and subsequent recovery of production in the Gulf of Mexico.

Generally speaking, Lower-48 onshore production, particularly in Texas, has been falling in recent years, while offshore (mainly Gulf of Mexico) production has been rising. For 2005, prior to Hurricanes Katrina and Rita in August and September, Gulf of Mexico oil production had been expected to increase as new fields came online in late 2003 and 2004 (e.g., the southern Green Canyon deepwater area).

By late 2005, the Mars, Mad Dog, Ursa, Thunder Horse and Nakika Federal Offshore fields had been expected to account for about 12 percent of Lower-48 oil production. Now, with the impacts of Hurricanes Katrina and Rita, this outlook has been thrown into question.

As of November 10, 2005, 46.7 percent of the Gulf of Mexico's 1.5 million bbl/d Crude Oil production capacity remained offline, with 39.8 percent of the area's 10 billion cubic feet per day (Bcf/d) of Natural Gas production capacity also down. EIA currently expects about 23 percent of the Gulf's crude oil production and 21 percent of its natural gas output to remain shut down through March 2006. Overall, through November 14, Hurricanes Katrina and Rita had caused a loss of nearly 86 million barrels of U.S. crude oil output, and over 440 Bcf of natural gas output. In addition, around 804,000 on bbl/d of crude refining capacity remained offline as of November 9.

The destructive 2005 hurricane season came as the Gulf of Mexico had just about fully recovered from Hurricane Ivan in late September 2004. That storm had also caused significant disruptions to Gulf of Mexico operations, with 102 pipelines affected and 27 platforms either destroyed or badly damaged. According to an assessment by the U.S Department of Interior's Minerals Management Service (MMS) , "Of the 4,000 structures and 33,000 miles of pipelines in the gulf....150 platforms and 10,000 miles of pipelines were in the direct path of Hurricane Ivan"

Source: Energy Information Administration