producer. This suggests Saudi Arabia will continue to export crude to the United States so long as they can maintain lower costs. The higher transportation costs are compensated by the lower marginal lifting costs. Thus, one of the major factors in determining the success of thTo continue from where we left off in part 1:

With a viable world market within striking distance, this article will argue that the only method for inducing a change in OPEC behaviour is to 'steal' import supply from the United States. It is unlikely that oilsands products will make it to any other world market due to logistic costs. Shipping oil to the nearest transport hub, British Columbia or refiners in Ontario, would be the only alternative for the crude. It is more efficient to create and build upon the existing transportation system directly to the United States. As a result, there is potential for oilsands exports to replace OPEC exports to the US. However, the only method of achieving this is by increasing current output and reducing lifting costs. The question of whether US importers will increase their Alberta consumption for oil is dependent on the cost. Is it cheaper to construct a pipeline directly from oilsands projects in Alberta, or is it cheaper to import from the Middle East? Regardless of location, the consumer, or in this case the nation, will import from the lowest cost producer. This suggests Saudi Arabia will continue to export crude to the United States so long as they can maintain lower costs. The higher transportation costs are compensated by the lower marginal lifting costs. Thus, one of the major factors in determining the success of the

s will make it to any other world market due to logistic costs. Shipping oil to the nearest transport hub, British Columbia or refiners in Ontario, would be the only alternative for the crude. It is more efficient to create and build upon the existing transportation system directly to the United States. As a result, there is potential for oilsands exports to replace OPEC exports to the US. However, the only method of achieving this is by increasing current output and reducing lifting costs. The question of whether US importers will increase their Alberta consumption for oil is dependent on the cost. Is it cheaper to construct a pipeline directly from oilsands projects in Alberta, or is it cheaper to import from the Middle East? Regardless of location, the consumer, or in this case the nation, will import from the lowest cost producer. This suggests Saudi Arabia will continue to export crude to the United States so long as they can maintain lower costs. The higher transportation costs are compensated by the lower marginal lifting costs. Thus, one of the major factors in determining the success of thtly to the United States. As a result, there is potential for oilsands exports to replace OPEC exports to the US. However, the only method of achieving this is by increasing current output and reducing lifting costs. The question of whether US importers will increase their Alberta consumption for oil is dependent on the cost. Is it cheaper to construct a pipeline directly from oilsands projects in Alberta, or is it cheaper to import from the Middle East? Regardless of location, the consumer, or in this case the nation, will import from the lowest cost producer. This suggests Saudi Arabia will continue to export crude to the United States so long as they can maintain lower costs. The higher transportation costs are compensated by the lower marginal lifting costs. Thus, one of the major factors in determining the success of thta consumption for oil is dependent on the cost. Is it cheaper to construct a pipeline directly from oilsands projects in Alberta, or is it cheaper to import from the Middle East? Regardless of location, the consumer, or in this case the nation, will import from the lowest cost producer. This suggests Saudi Arabia will continue to export crude to the United States so long as they can maintain lower costs. The higher transportation costs are compensated by the lower marginal lifting costs. Thus, one of the major factors in determining the success of thproducer. This suggests Saudi Arabia will continue to export crude to the United States so long as they can maintain lower costs. The higher transportation costs are compensated by the lower marginal lifting costs. Thus, one of the major factors in determining the success of the oilsands export market will hinge upon the producer's ability to maintain an affordable product under market conditions. Presently this is the case, high market prices support the market for expensive bitumen exports.

Potential Size of United States Export Market

Currently, Alberta accounts for over 10% of total American imports of crude oil. It is feasible this value will increase when oilsands production expands so long as it remains cost effective to the importing market. Using data primarily from the BP Statistical Review of World Energy for 2004, with some data components from the Alberta Energy Department, one can extrapolate future US crude import volumes and percentage share amongst importers. In the period between 1993 and 2003, the United States experienced declining production while supporting an increasing consumption trend. Imports therefore steadily increased throughout this period. The result of an expanding import market share is good news to the oilsands producer, especially with declining world reserves. Examining 2002 import market share states Alberta alone contribu