Economists and investors seem to be gushing about the prospects for American oil and gas production. Late last year, the International Energy Agency (IEA) forecast that the United States will pass Saudi Arabia as the world's leading oil producer within a decade. In IEA's central scenario, the U.S. becomes a net exporter of natural gas by 2020 and North America emerges as a net oil exporter by 2035. Supporting IEA's prediction was new data released on April 30 by the United States Geological Survey (USGS), which indicated that 7.4 billion barrels of oil could be recovered from two massive shale formations spanning parts of North Dakota, South Dakota and Montana. That nearly doubles previous USGS estimates. In addition to oil, the two formations contain an estimated 6.7 trillion cubic feet of undiscovered, technically recoverable natural gas and 0.53 billion barrels of undiscovered, technically recoverable natural gas liquids.
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