The second stage includes detailed geologic surveys of those regions where the surface evidence indicates that petroleum is most likely to be found and the location of test holes at favorable points. By working out the surface distribution and structure of the formations it is usually possible to select the areas offering the best chances of success. Geology should always be the dominant factor in determining the location of test holes, although modifications to meet natural conditions must sometimes be made. OIL SHALES One of the sources of oil which is likely to become important in the future is oil shales,--that is, shales from which oil product can be extracted by distillation. These have already been referred to on previous pages. Such shales are now mined only in Scotland and in France to a relatively small extent, but there are immense reserves of these shales in various parts of the world which are likely to be drawn upon when commercial conditions require it. In the United States alone it is estimated that the oil shales are a potential source of oil in amounts far greater than all the natural petroleum of this hemisphere.[30] The solution of the problem of extraction of oil from shales is fairly well advanced technically, and the problem has now become principally one of cost. In order to recover any large amount of oil from this source, operations of stupendous magnitude, approximately on the scale of the coal industry, must be established. As long as there are sufficient supplies of oil concentrated by nature to be drawn upon, it is unlikely that oil shale will furnish any considerable percentage of the world's oil requirements. With the great increase in world demand for oil, however, which may very possibly outstrip the available annual supply in the future, and particularly with the increase in the United States demand relative to domestic supplies, exhaustive surveys of the situation are being made with a view to development of oil shales when warranted by market conditions. Oil shales are sedimentary strata containing decomposed products of plants and animals. Locally they grade into cannel coal, with which they are genetically related. They may be regarded as representing the kinds of sediments from which the oil of oil pools has in the main originated. The most extensive of the oil shales of the United States are found in the Eocene beds of northwestern Colorado, northeastern Utah, and southwestern Wyoming, and in the Miocene beds of northern Nevada. The largest known foreign deposits occur in Brazil and Russia. NATURAL GAS ECONOMIC FEATURES