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Canada’s oil sands producers expect to boost their production by 60 per cent over the next 17 years despite concerns about lack of pipeline capacity and more onerous environmental regulations.

In a forecast released on Tuesday, the Canadian Association of Petroleum Producers (CAPP) said the oil sands will account for virtually all of the industry’s growth through 2035, adding 1.5-million barrels a day on top of the 2.6-million it produced in 2017.

Pipelines carrying steam and oil run at the Suncor Firebag in-situ oil sands operations near Fort McMurray, Alta., in September, 2014.Todd Korol/Reuters

But that bullish outlook depends on an increased capacity to export crude, the CAPP report said.

“Industry has the potential to grow in the coming decades, but only if governments lift barriers to investment and new pipelines get built,” the association said.

The outlook is based on a survey of companies’ expectations. The projected production for 2035 is slightly higher than last year’s forecast.

“It’s up from last year, but it’s down substantially from what we should be aspiring to, and what is a realistic view of where Canada can be an important energy exporter into the future,” CAPP president Tim McMillan said in an interview from Calgary.

Before prices slumped in 2014, CAPP projected the industry would produce 6.5-million barrels of crude a day from the oil sands and conventional fields by 2030; now, it says the total will be 5.6-million in 2035.

“What these numbers reflect is decreasing investment in the oil sands, decreasing investment over all this year and long-term challenges to pipelines getting built,” Mr. McMillan said.

While industry investment is climbing around the world – most notably in the United States – investment in the oil sands is expected to drop for the fourth year in a row, to $12-billion this year from $34-billion in 2014.

Companies are basing their projections on the assumption that three pipeline projects will be completed: the Trans Mountain expansion, which is being challenged in British Columbia; TransCanada Corp.’s Keystone XL, which is stalled in Nebraska; and Enbridge Inc.’s Line 3 expansion, which faces a key decision on its fate in Minnesota this month .

Mr. McMillan applauded the Liberal government’s purchase of Trans Mountain and said the move will ensure the project is completed. But he added it should not remain a Crown corporation.

Finance Minister Bill Morneau has committed to selling the pipeline as quickly as possible and has engaged New York investment bank Greenhill & Co. to deal with potential buyers.

Mr. McMillan said the industry also faces an increasing burden from environmental regulations that reduce its competitiveness compared to the United States, where President Donald Trump’s administration cut taxes and is slashing regulations.