Alberta’s trade with the big Asian economies of China and India have attracted plenty of attention and the potential for growth to these regions is enormous. However, more than a quarter of our international exports goes to one specific region of the world—and that region is less than a quarter of the geographic size of Alberta.
Illinois, the fifth largest U.S. state by population, is the destination of more than 26 per cent Alberta’s
international exports over the last two years. That is more than the value of exports to China, Japan, the U.K, Germany and every other international export market combined—and then some. It’s also by far the largest single state in terms of sales from Alberta.
The reason why Illinois is Alberta’s #1 export market? It is home to a large number of U.S. oil refineries and natural gas distribution hubs. Alberta’s hydrocarbons exported to the U.S. are often destined for the energy infrastructure around the Chicago area and then redistributed around the country (often to other refineries and hubs).
Washington state, Minnesota, Ohio and Michigan are also popular destinations for Alberta’s exports. And in each of these cases, hydrocarbons are the dominant export product.
The Keystone XL pipeline—which is being hotly debated in the U.S. and awaiting President’s Obama’s final approval—would add extra capacity for exporting Alberta’s energy and open doors for expanded sales. However, it would do little to alter the province’s heavy reliance on the U.S. market.*
*Courtesy of Todd Hirsch, Chief Economist, ATB Financial