Report: Oil and Natural Gas Production Expected to Grow in Coming Years

Oil and natural gas production has a bright future in Canada, according to the Canadian Energy Regulator’s recent first-ever, IEA-style report on the future of Canada’s energy industry. The report uses scenario-based models to project Canada’s future in terms of consumption and supply for the oil and natural gas industry.

Under the two scenarios, which differ based on the rate of action to lower greenhouse gas (GHG) emissions, one common theme emerges from the report; Canada’s oil production output will continue to grow throughout the coming decades.

Listed as one of the report’s key findings, both scenario-based models predict production will continue to ramp up for years to come:

“Major crude oil pipeline projects under construction will be able to accommodate all future production growth in both the Evolving and Reference Scenarios.”

The Evolving Scenario assumes actions to address climate change will continue to be rolled out for the foreseeable future, while the Reference Scenario projects outcomes based off of no additional climate actions taking place and includes actions already in play.

Under the evolving scenario, Canada’s oil production output will increase in the next two decades by close to 1 million barrels per day (MMb/d), growing from 4.9 MMb/d in 2019 to 5.8 MMb/d in 2039. Under the reference scenario, oil production would grow by 2.3 MMb/d to 7.2 MMb/d. Most production growth is anticipated to occur in Alberta.

One key element that will drastically effect Canada’s future energy industry is infrastructure, the report insinuates. Currently, the completion of three major pipeline projects stand between Canadian energy companies’ ability to increase export capacity to the U.S. and Canadian ports on the coast.

The completion of these infrastructure projects, the report states, could drastically reduce transportation costs and increase takeaway capacity:

“A key issue for Canada’s energy system is the availability of crude oil export pipeline and rail capacity. This has implications for Canadian oil pricing and production trends. We assume that additional pipeline capacity is added according to announced completion dates of the Keystone XL pipeline, Line 3 Replacement Project, and the Trans Mountain Expansion.”

Both scenarios project that production of natural gas and liquified natural gas (LNG) will ramp up for years to come, too. The CER expects natural gas production to increase from the current 15.7 billion cubic feet per day (Bcf/d) to 18.4 Bcf/d by 2040. In the evolving scenario, LNG production and exports are projected to be 2 Bcf/d in 2025. This growth can be accounted for by the completion of just a single large LNG project now under construction, LNG Canada.


Whether Canada’s energy future involves more climate-focused policies or if the industry stays as-is, production for both oil and natural gas will continue to grow well into the coming decades. As Canada develops its strategy for addressing emissions, oil and natural gas will without a remain a key facet of the country’s energy portfolio. And, with key infrastructure projects close to completion, Canada’s oil and natural gas industry will continue to play a vital role in supporting Canada’s economy and pandemic recovery.

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