| To continue from where we left off in part 1:With a | | | | This value is expected to increase to approximately |
| viable world market within striking distance, this article | | | | 2.7million barrels per day in the year 2012. Saudi Arabia |
| will argue that the only method for inducing a change in | | | | accounted for 16.8% of total crude imports and |
| OPEC behaviour is to 'steal' import supply from the | | | | Venezuela was responsible for 13.2%. Only two OPEC |
| United States. It is unlikely that oilsands products will | | | | producing nations will be considered in this example |
| make it to any other world market due to logistic | | | | since expected future output from bitumen reserves in |
| costs. Shipping oil to the nearest transport hub, British | | | | year 2012 cannot displace all OPEC exports to the US. |
| Columbia or refiners in Ontario, would be the only | | | | I chose to include the largest two exporters and will |
| alternative for the crude. It is more efficient to create | | | | account for their potential losses from an expanding |
| and build upon the existing transportation system | | | | oilsands industry. (These figures do not reflect recent |
| directly to the United States. As a result, there is | | | | 2006 market trends of increasing and increasing crude |
| potential for oilsands exports to replace OPEC | | | | prices and the impact on consumer |
| exports to the US. However, the only method of | | | | consumption.)Assuming market conditions remain |
| achieving this is by increasing current output and | | | | favourable for oilsands production, and the target |
| reducing lifting costs. The question of whether US | | | | volume in 2012 is achieved, how could the US import |
| importers will increase their Alberta consumption for oil | | | | market appear? Using regression analysis on US |
| is dependent on the cost. Is it cheaper to construct a | | | | imports, and OPEC production, one can extrapolate |
| pipeline directly from oilsands projects in Alberta, or is it | | | | future market shares and make assumptions regarding |
| cheaper to import from the Middle East? Regardless | | | | possible OPEC losses. Excluding any future market |
| of location, the consumer, or in this case the nation, will | | | | shocks from either supply or demand, US imports in |
| import from the lowest cost producer. This suggests | | | | the year 2012 will amount to approximately 16.045 |
| Saudi Arabia will continue to export crude to the United | | | | million barrels per day. This is an increase of about |
| States so long as they can maintain lower costs. The | | | | 32.2% from the year 2002. Increasing the import |
| higher transportation costs are compensated by the | | | | percentage share of the three producers mentioned |
| lower marginal lifting costs. Thus, one of the major | | | | above by 32.2% will provide 2012 daily export values. |
| factors in determining the success of the oilsands | | | | Using the 2.7million bbl/d oilsands value, and subtracting |
| export market will hinge upon the producer's ability to | | | | the future export volume of Alberta crude, will provide |
| maintain an affordable product under market | | | | a residual value which can be applied to an increase in |
| conditions. Presently this is the case, high market prices | | | | export volumes. Assume for a moment this entire |
| support the market for expensive bitumen | | | | quantity is exported and none is consumed |
| exports.Potential Size of United States Export | | | | domestically. 10.77% of OPEC's entire production in |
| MarketCurrently, Alberta accounts for over 10% of | | | | 2012 may be attributed to the US import market, if the |
| total American imports of crude oil. It is feasible this | | | | oilsands surplus is applied solely against OPEC's share, |
| value will increase when oilsands production expands | | | | it will be reduced to 6.71%, or a loss of about 494 |
| so long as it remains cost effective to the importing | | | | million barrels per year. The absolute maximum Alberta |
| market. Using data primarily from the BP Statistical | | | | oilsands could displace total OPEC production in year |
| Review of World Energy for 2004, with some data | | | | 2012 is just over 4%. Is this value large enough to |
| components from the Alberta Energy Department, one | | | | attract the attention of OPEC? Will OPEC prefer to |
| can extrapolate future US crude import volumes and | | | | hold oil reserves for future production while watching |
| percentage share amongst importers. In the period | | | | the oilsands deplete, or will they attempt to recapture |
| between 1993 and 2003, the United States | | | | the lost market share?Part 3 and the conclusion is |
| experienced declining production while supporting an | | | | now available for your world oil reading |
| increasing consumption trend. Imports therefore | | | | pleasure....DiscussEconomics is an informative |
| steadily increased throughout this period. The result of | | | | Economics forum with complete categories for foreign |
| an expanding import market share is good news to | | | | exchange rate discussion, world oil and other energy |
| the oilsands producer, especially with declining world | | | | sectors, micro and macro choices, personal finances, |
| reserves. Examining 2002 import market share states | | | | interest rate movements, and other key economic |
| Alberta alone contributed 11.3% of total US imports for | | | | indicators. |
| crude oil, or about 1,018 thousands of barrels per day. | | | | |