Let’s face it: right now, the Canadian oil and gas industry is feeling the heat. Crude prices have taken a hit, and market uncertainty is making things even more tense. But even with these short-term struggles, Lisa Baiton, the CEO of the Canadian Association of Petroleum Producers (CAPP), isn’t ready to write off the sector’s future. In fact, she believes the long-term outlook for Canadian oil and gas is stronger than ever—despite the bumps in the road.
Sure, it’s hard to ignore the recent drop in oil prices—West Texas Intermediate crude has fallen by about US$10 in just a week, hovering around US$60 per barrel. That’s tough news for anyone in the business. But, as Baiton points out, the whole world is dealing with volatility right now. Between the ongoing U.S.-China trade tensions and OPEC’s decision to boost production, the market is uncertain. However, the demand for Canadian energy, especially from the U.S., remains solid. And while things may be rough right now, Baiton is confident that the fundamentals for Canadian oil and gas are still strong.
What’s more, there’s a bigger story unfolding here. The demand for energy in the future isn’t just going to come from the usual sources—it’s going to come from the rise of artificial intelligence (AI) and the massive data centers it requires. These data centers use an enormous amount of energy, and as AI technology keeps growing, so will the demand for power. Canada, with its rich energy resources, is in a great position to supply that demand. This isn’t just a short-term blip; it’s a longer-term trend that could power Canada’s energy sector for years to come.
At the same time, companies like Tourmaline Oil Corp., which operates in B.C. and Alberta, are feeling the pinch of the recent price drop. CEO Mike Rose has been open about the challenges, particularly as stock prices have fallen. But he’s also taking a pragmatic approach, noting that the timing of this downturn might not be all bad. Spring is traditionally a slower season for drilling anyway, with rigs pausing for the “spring breakup” when the ground is too muddy. This gives the company a bit of breathing room to reevaluate its strategy. And there’s another bright spot: Canada’s first liquefied natural gas (LNG) terminal is set to open in Kitimat, B.C., later this year. Once operational, it could dramatically shift the pricing for natural gas from western Canada by allowing it to be exported to Asian markets. Rose is optimistic about the impact this could have on the industry.
On the oilsands side, things are a little trickier. Some projects that use steam-based extraction are still feasible even at lower oil prices, but new developments would need stable prices of at least US$80 per barrel to move forward. The reality is that oilsands projects require huge investments and are heavily dependent on consistent pricing. With the current market uncertainty, many of these projects are on hold for now.
But Baiton isn’t just talking about prices—she’s also pushing for policy changes to help the industry thrive. She’s calling for a “major policy reset” that would support the development of Canada’s oil and gas resources. In her view, repealing certain environmental review legislation would allow for more major projects to get off the ground. Beyond the economic benefits, she stresses that Canada’s energy resources are crucial for national security and sovereignty. With the world’s energy landscape constantly shifting, Canada’s oil and gas reserves are more important than ever.
In the end, while the Canadian oil and gas sector is facing a tough moment, there’s a lot of reason to stay optimistic about the future. Yes, there are immediate challenges to tackle, but the long-term demand for energy—and Canada’s role in supplying it—remains strong. The key will be weathering the current storm, adjusting where necessary, and keeping an eye on the massive potential down the road. The future of Canadian oil and gas isn’t written in the short-term fluctuations of the market, but in the long-term trends that are shaping our world today. And that’s a future worth betting on.
