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Gaining access to China’s fast-growing market remains little more than a pipe dream (pun intended) for Alberta’s oil industry.

Although the lack of access is costing oil producers and taxpayers billions of dollars a year in lost revenues, it’s not likely to be resolved any time soon. With Adrian Dix’s NDP expected to take power on May 14, when British Columbia voters go to the polls, the odds of any new West Coast pipelines getting built seem to be dwindling. Dix is opposed to both Enbridge’s proposed Northern Gateway pipeline to Kitimat and the expansion of Kinder Morgan’s existing line to the Lower Mainland.

Alberta’s $2.3 billion forest products industry, on the other hand, has had far more success cracking the Chinese market, even if it hasn’t gotten much credit for it.

Between 2007 and 2012, exports of Alberta pulp and lumber to China soared by more than 335 per cent, to nearly $300 million.

The big jump in shipments helped Alberta’s forest products sector weather the steep downturn in the U.S., where exports fell more than $300 million during the same period, to less than $1.2 billion in 2012. Pulp accounted for more than 90 per cent of Alberta’s forest product exports to China last year. But the province’s lumber producers are also starting to gain a foothold, with exports of $10.4 million in 2012, five times the 2007 level.

Of course, Alberta’s forest products industry is tiny compared to that of B.C., which exported nearly $10.2 billion worth of lumber and other products in 2012, including $4.3 billion to the U.S. and $3.1 billion to China.

As in Alberta, B.C.’s success in penetrating the Chinese market was instrumental in helping its forest products sector survive the implosion of the U.S. housing market and the downturn in the U.S. economy.

B.C. exports of lumber, pulp and other products to China nearly tripled between 2007 and 2012, while exports to the U.S. fell by more than 40 per cent during the same period.

Ironically, B.C.’s success in ramping up lumber exports to China is having a positive, spillover effect in Alberta, where sawmills are now facing less intense competition from B.C. suppliers in traditional U.S. regional markets.

Chris McIver, vice-president of sales and corporate development at Vancouver-based West Fraser Timber, B.C.’s largest lumber producer, says the company’s Alberta mills are seeing volumes to both China and the U.S. pick up.

“We’ve got a pretty substantial (export) business in China. It’s now roughly 25 per cent of our Canadian production, and five years ago it was virtually zero,” he says. “It has been centred on our B.C. assets, but over the past six months we’ve really expanded it from almost exclusively B.C. to include a fair bit of lumber from Alberta as well.”

West Fraser’s Alberta mills are capitalizing on B.C.’s increased focus on China by shipping more product south of the border, he notes.

“As I always tell Alberta producers ... regarding the lumber that’s going to China, Alberta may not see as much of the direct effects of that business, but what they do see is they don’t have to compete against B.C. lumber throughout the marketplace, like in the U.S. Midwest,” he says.

“So it’s been a real win for Alberta in that it has taken that chunk of lumber out of the market that they would normally have to compete hard against. On top of that we actually are using our Alberta mills at Hinton, Sundre and Blue Ridge for part of our (China export) business and it’s been pretty effective.”

Most of the lumber that’s exported to China is used for forming concrete, not for building homes or apartment complexes. Given the population density of its cities, most urban residents in China live in concrete-and-steel highrises. But there is growing use of wood for construction of secondary or vacation homes, says McIver.

Add it all up, and China’s consumption of lumber equates to about 300,000 new homes per year. And now that the U.S. housing market is on the rebound, the outlook is brighter than it has been in years for Alberta’s building products producers.

“We’re expecting a very strong year for our membership,” says Brady Whittaker, CEO of the Alberta Forest Products Association. “Prices are up significantly for both lumber and panel products. The composite price for lumber at this time last year was $316 US (per thousand board feet). Right now it is $414.”

“And on the panel side (which includes products like plywood and oriented strand board or OSB) last year’s price was $349 and it is $490 right now. These extra revenues mean a lot more money to invest in communities and mill facilities.”