Oil sands set for 25th straight year of growth as energy export story shifts
What makes the current moment distinct, according to S&P Global Energy, is the alignment of conditions that have historically preceded major investment cycles. These include announced plans for expanded pipeline export capacity, the clarification and extension of carbon pricing to 2040, accelerated federal project review timelines, and potential changes to fiscal terms for new oil sands developments.
Canadian energy is also increasingly framed in Ottawa as a matter of national economic security, a shift in political tone that S&P Global Energy says has not been seen in more than a decade.
“The degree of alignment to drive upstream growth between the Canadian Federal and Provincial governments has not been seen in more than a decade,” said Kevin Birn, Chief Canadian Oil Markets Analyst at S&P Global Energy in Calgary. “The fresh focus on eliminating uncertainties to accelerate investment could set the stage for a return to new construction and greater growth.”
Most of today’s installed oil sands capacity was built between 2009 and 2018, with very little new construction since. Producers have instead focused on optimising existing facilities, a model that has proved remarkably durable. Celina Hwang, Director of Canadian Crude Oil Markets at S&P Global Energy, estimated that nearly half a million barrels per day of incremental capacity could come forward from previously proposed but unadvanced projects under the right conditions.
A final implementation agreement under the Canada–Alberta Memorandum of Understanding between the governments of Alberta and Canada and the oil sands industry is expected on November 15, 2026, and S&P Global Energy identifies that date as a key signal of whether new investment momentum will materialise.
