Energy industry confidence drops in fast-tracking new oil pipeline

Confidence in the approval of new oil pipelines in Canada is shifting, raising concerns among industry executives. Recent findings from a survey conducted by ATB Cormark Capital Markets reveal a notable decrease in optimism regarding the federal government’s ability to fast-track energy projects crucial for the sector's growth.

Declining confidence in pipeline approvals

A recent sentiment survey indicates that confidence is waning regarding the swift federal review of new oil pipelines. Conducted between March 18 and April 1, ATB Cormark Capital Markets gathered insights from executives across a spectrum of energy services firms, exploration and production companies, and institutional investors.

Out of the surveyed participants, only 46% believed it was either likely or highly probable that a new pipeline project would receive expedited consideration under federal legislation enacted the previous year. This figure marks a decrease from 52% in a similar survey conducted in late summer 2022.

Comments from participants highlight a growing skepticism towards the federal government’s commitment to addressing long-standing structural challenges within the energy sector. One anonymous executive expressed frustration, stating, “People are losing faith that the Liberal government will actually fix any of the structural problems they created in the last 10 years.”

Calls for action from industry leaders

Executives have urged the government to move beyond discussions and take decisive action. One participant from a small private energy services company emphasized the need for “less talk and more action,” criticizing the lack of progress on oil and gas projects. This sentiment reflects a broader frustration among industry leaders who feel that existing regulatory frameworks hinder growth.

• “Start building, or better yet just get out of the way of industry,” the executive stated.
• There is a pressing demand for clear directives from the government to support new projects.
• Industry leaders are calling for a streamlined process to expedite approvals.

Government initiatives and energy sector outlook

Despite the declining confidence regarding pipeline projects, recent surveys indicate a slight increase in optimism about the overall energy sector. In a survey conducted in spring 2026, 48% of respondents expressed belief that Prime Minister Mark Carney’s Liberal government would actively work to expand the energy sector, a rise from 37% in the previous fall survey.

In November, Premier Danielle Smith of Alberta and Prime Minister Carney signed a memorandum of understanding focusing on various energy matters. This agreement outlines a path for a new oil sands pipeline to the West Coast, which has the potential to transport up to one million barrels per day for export to Asian markets. This initiative aims to reduce Canada’s dependence on the U.S. energy market.

Impact of carbon pricing and regulatory processes

The proposed pipeline's progression is closely linked to the development of the Pathways carbon capture and storage project, which is critical for the project's economic viability. This initiative is also tied to an anticipated increase in industrial carbon pricing, which is expected to support the economic rationale behind new pipeline constructions.

As the survey period coincided with a deadline for agreements on Pathways funding and the implementation of a higher carbon price, unresolved issues in these areas contributed to the overall pessimism about pipeline approvals. Patrick O’Rourke, managing director of institutional equity research at ATB Cormark, noted that the uncertain timing of key decisions may have influenced the survey responses.

Revisiting the Keystone XL pipeline

Amidst the uncertainty surrounding new pipeline projects, there is a growing interest in reviving parts of the Keystone XL pipeline, a venture pursued by South Bow Corp. and Bridger Pipeline LLC. Survey respondents expressed a greater optimism for this revived project compared to the proposed West Coast pipeline, which lacks interest from private-sector companies.

O’Rourke remarked, “We’re seeing a desire from both Canadian and U.S. counterparties to continue to grow our ability to move barrels north-south,” indicating a preference for enhancing cross-border pipeline capacity. In contrast, he noted that the challenges of establishing pipelines east to west are considerably more complex.

Market conditions and business outlook

The spring 2026 survey was conducted during a period characterized by extreme volatility in commodity prices, primarily driven by geopolitical tensions in the Middle East. As tanker shipments through critical waterways like the Strait of Hormuz faced significant disruptions, global crude prices experienced a dramatic increase, reaching levels up to 70% higher than pre-war figures.

Despite these fluctuations, a substantial majority of respondents reported a positive outlook for their business trajectories:

• 86% of exploration and production executives noted an improving business outlook over the next six months.
• 67% of energy services respondents anticipated increased activity levels.
• 82% of investors expressed heightened bullish sentiment towards energy markets.

O’Rourke emphasized that many energy businesses thrive at crude price levels between US$70 to US$75 per barrel, suggesting that they do not require prices above US$90 for their operations to remain viable and attractive to investors.