‘Dog that got the car’: Oilpatch is getting what it wanted, but will companies build?

Posted November 15, 2026 6:00 am.

Last Updated November 15, 2026 7:09 am.

CALGARY — Alberta Premier Danielle Smith has set a lofty goal of doubling oilsands output in the next decade, and industry players have said the idea of bringing new projects to the fore is becoming easier to stomach thanks to a raft of recent federal and provincial government policy changes.

“It’s almost like the dog that got the car,” said R.J. Johnston, with the University of Calgary’s School of Public Policy, in a panel discussion at an Alberta Securities Commission conference last month.

“We got what we wanted as an industry. Now the pressure’s on to invest.”

Ottawa has made several moves aimed at boosting output, including reversing a host of Trudeau-era environmental policies and making more investments eligible for immediate tax deductions, permanently. Alberta on Friday announced a new royalty program to spur development. And both governments are shouldering the bulk of the investment in the proposed Pacific Link pipeline to southern B.C., enabling greater exports to Asia.

But experts say any big-ticket upstream investments that might result will have to compete for capital with the healthy dividend growth and share buybacks oilpatch investors have come to expect in recent years, and avoid the staggering cost overruns of the past.

“Expectations that the industry will follow through with massive investment are maybe a little unrealistic,” Johnston said. “It doesn’t fully account for how industry’s positioned with its shareholders and capital providers.”

Michael Berger, a senior analyst at Enverus, said in an interview that producers have been prioritizing paying down debt and boosting shareholder returns, and he expects that to continue in the coming years.

But he said there’s an appetite for growth, too.

“The large oilsands operators have multi-decade inventory profiles. It’ll be a balancing act in terms of adequate shareholder distributions and prudent capital allocation decisions for growth barrels.”

Chris Seasons, a partner at ARC Financial who used to lead Devon Canada, told the ASC conference it was a “go go go” mindset in the oilsands from around 2000 to 2014.

“Investor expectations for growth were pretty high at that time, so the industry as a whole spent more than we brought in cash flow and capital was fairly readily available,” he said. “A lot of projects were rushed. So the capital costs went up and the economics went down.”

The 2014 global oil price collapse was a rude awakening. Since then, operators have worked hard to drive down the amount it costs to squeeze each barrel of bitumen from the ground.

“As we look at building out the industry today, I think that discipline will stay in place,” Seasons said.

On recent third-quarter conference calls, top executives of Canada’s biggest oilsands producers expressed optimism about pursuing growth — under the right conditions.

Imperial Oil has the opportunity to double its gross operated upstream production with three steam-driven oilsands developments: Aspen, Clarke Creek and Corner, chief executive John Whelan told analysts late last month. The company had been considering making a final go-ahead decision for a 150,000-barrel-per-day project at Aspen at the end of the decade, but that may happen sooner.

“We are looking at, ‘Do we want to bring it forward?’ And we have options,” Whelan said.

“Ultimately it will be driven by technology, project economics and the fiscal environment. I’m really encouraged by what I’m seeing.”

Suncor Energy Inc. had been looking at a half dozen in-situ projects to complete over the next decade, chief executive Rich Kruger said on that company’s quarterly call with analysts.

“That is the base case. But we’re asking ourselves and doing some preliminary work, saying, ‘Well, what if? What if we wanted to do more? What if wanted to go faster?’ We haven’t landed on that yet.”

Meanwhile, Cenovus Energy Inc. aims to seize on development opportunities through its proposed $5.7-billion acquisition of smaller peer Athabasca Oil Corp. Production from the target company’s oilsands assets could grow to 115,000 barrels per day by 2032 from its current 40,000 boe/d, Cenovus said. Through the deal, Cenovus gets an undeveloped brand new prospect at Corner, and sees opportunity to expand another operating one called Leismer.

“Recent announcements around tax policy, royalties, new pipelines and regulatory efficiency are important steps in the right direction,” CEO Jon McKenzie told a conference call the day the Athabasca deal was announced.

“These steps will have a meaningful impact on our ability to advance growth projects like the ones we are contemplating at Leismer and Corner.”

Top oilsands producers have been in intensive talks with Ottawa and the Alberta government, trying to pin down an agreement that will see the Pathways carbon storage project, first proposed in 2021, move ahead while at the same time encouraging an increase in oilsands output.

Pathways, since scaled down from its original plan, is meant to offset some of the greenhouse gas emissions that would result from increased production enabled by Pacific Link. Under a sweeping energy accord signed between Ottawa and Alberta last year, moving ahead with Pathways is a condition for the pipeline going ahead, and vice versa.

Growth plans at Canadian Natural Resources Ltd. will depend on the outcome of those negotiations, president Scott Stauth said in an interview earlier this month.

“As we move forward, (the agreement) will hopefully enable growth opportunities,” he said.

Berger, at Enverus, said the growth opportunities in the oilsands could take several forms: redeveloping existing projects, bolting on expansions or building from scratch.

“I think it’ll be a good mix of everything, all at different paces,” he said.

“We think that there’s enough resource, there are enough projects. It’s ultimately just the cadence at which capital gets deployed.”

This report by The Canadian Press was first published Nov. 15, 2026.

Companies in this story: (TSX:SU) (TSX:CNQ) (TSX:CVE) (TSX:IMO)

Lauren Krugel, The Canadian Press

Keep it Factual

Add CityNews Toronto as a trusted source on Google to see more local stories from us.