Canada's Energy Outlook Shifts: New Report Forecasts Rising Gas Production and LNG Exports
In a significant departure from previous projections, the Canada Energy Regulator (CER) has released a new energy futures report that offers what analysts and industry producers describe as a more realistic reflection of Canada's energy trajectory. The report, unveiled on Tuesday, comes at a time when global concerns about energy security, decarbonization efforts, and affordability are intensifying.
A Changing Energy Landscape
Just a few years ago, discussions about global oil demand plateauing were widespread, with Canada's natural resources minister at the time suggesting oil use would likely peak in 2024. Similarly, the CER itself issued a rather pessimistic outlook for natural gas, indicating production would remain flat until 2040 before declining under its evolving policy scenario.
"Times have clearly changed," notes the report, which examines multiple scenarios for energy development across Canada. The analysis includes a baseline outlook based on current government policies, along with high and low variations, plus a scenario that assumes the country reaches net-zero emissions by 2050 with a pathway to achieve this goal.
Key Findings from the Report
The CER's findings paint a picture of growing energy production across several sectors:
- Electricity generation shows strong increases in all scenarios, particularly from low-emitting sources
- Oil output continues rising in the short term, with Canada maintaining its position as the world's fourth-largest oil producer
- Natural gas production is projected to increase significantly, driven largely by Canada's emerging liquefied natural gas (LNG) export sector
Under the CER's baseline scenario—which the agency emphasizes are tools for examining supply and demand outlooks rather than predictions—natural gas production is forecast to reach 27 billion cubic feet per day by 2050. This represents a substantial 48 percent increase from 2024 levels.
The LNG Game Changer
The report highlights Canada's recent entry into the global LNG market as a transformative development. The LNG tanker GasLog Glasgow's arrival at LNG Canada's shipping terminal in Kitimat on June 28, 2025, marked the beginning of Canada's first-ever exports of super-cooled liquefied natural gas to Asian markets.
"We're obviously in a situation right now where we're having an energy crisis, and having a mismatch between supply and demand—not preparing for actual supply—is dangerous," said Heather Exner-Pirot, director of natural resources, energy and environment at the Macdonald-Laurier Institute. "This is a more honest look, a more realistic look, and it leads to better policy."
Complex Energy Transition
The report underscores the complexity of the global energy transition. "It demonstrates the complexity of the energy transition. Some established fuels are hard to displace for very good reasons," observed Ian Archer, an associate director at S&P Global Energy.
While the long-term trajectory for oil remains tied to global price fluctuations, the immediate outlook shows continued production increases. The CER's comprehensive examination of different energy development scenarios reflects growing recognition that energy security must be balanced with decarbonization goals and affordability concerns.
This new energy outlook represents a significant shift from previous projections and provides policymakers, industry leaders, and analysts with updated frameworks for understanding Canada's energy future in an increasingly complex global landscape.
