Canada pipeline expansion vs oil sands output

Canadian pipeline firms are proposing billions of dollars in new projects despite oil sands companies being reluctant to commit to significant production expansions amid ongoing uncertainty around climate policies and long-term global demand. At least six different pipeline projects are underway or proposed in Canada, to move oil to the United States or to export markets on the Pacific coast. If all are built, the country's export pipeline capacity would increase by 45 per cent, or 2.25 million barrels per day, by 2035, according to a Reuters calculation. But filling all those pipes would require Canadian oil supply to increase by more than a third by 2034, a near-doubling of its current annual average growth rate. It would also require Canadian producers to move ahead with major new oil sands projects of the type that no company has undertaken in more than a decade. The mismatch between proposed export pipeline expansions and the pace of output growth highlights how Canada may struggle to achieve Prime Minister Mark Carney's 'energy superpower' ambitions, despite a more supportive regulatory environment and growing interest in Canadian oil from international buyers. Both Suncor Energy and Canada — Natural Resources Canada said this month they are not yet willing to accelerate plans for production increases. Pipeline operator Enbridge said in July it is postponing plans for a second phase of its Mainline pipeline expansion, one of the six new projects, as customers failed to commit to capacity increases. Canadian oil production grew by 4 per cent in 2025 to hit an all-time record of 5.35 million bpd and most analysts predict another 3 per cent to 4 per cent growth in 2026. Annual capital investment in Canada's oil sands peaked in 2014, at C$35 billion, compared to C$14.2 billion in 2024, according to Canada — Statistics Canada. The last major new oil sands project, Suncor's Fort Hills, started operating in 2018. Energy consultancy Novi Labs identified 19 different oil sands growth projects that could add 652,000 bpd of production by 2037. Only some of the projects, proposed by companies like Cenovus Energy, ExxonMobil — Imperial Oil, Strathcona Resources and Suncor, have received final investment decisions. Canadian oil executives have said they feel more optimistic about the future than they have for years, thanks to Carney's pledges to speed permitting for energy projects and roll back or water down a variety of environmental and climate rules. But many of the proposed policy changes negotiated between the industry and the federal and Canada — Alberta governments have not yet been drafted into final legislation.