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Is North America the Next Middle East for Energy?
CNBC.com | March 21, 2012 | 05:05 AM EDT

Increased production of energy from a number of sources including deepwater drilling, natural gas exploration and Canada’s oil sands could make North America the next Middle East, according to a new report from Citigroup.

The bank estimates that total North American energy production will rise from 15.4 million barrels per day in 2011 to almost 26.6 million barrels per day by 2020, boosting gross domestic product (GDP) and creating ripple effects throughout the economy.

Citigroup analysts say the U.S. will see large gains in oil production from deepwater drilling, while Mexico will begin to reverse recent declines in output. Production of shale gas liquids will increase by 3.8 million barrels per day by 2020. The report says this new production would amount to about 7 percent of additional global production, "a higher growth rate than OPEC can sustain."

That increase in energy supply will also be accompanied with a decline in demand. U.S. consumption of oil products has fallen by 2 million barrels per day since its peak in 2005, and the Citi report says demand will fall by another 2 million barrels per day over the next decade.

“The economic consequences from this supply and demand revolution are potentially extraordinary,” Ed Morse, head of global commodities research at Citigroup Global Markets and his team of analysts wrote.

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