Canadian oil production will increase by 75 per cent and gas production by 25 per cent by 2035, according to a report by the National Energy Board.

Its energy supply and demand projections report, released Friday, projects Canadian crude oil production of 5.8 million barrels a day by 2035.

The report predicts a steep rise in production of crude from oilsands and from shale, areas that are currently drawing millions in investment by companies such as Encana, Suncor and Royal Dutch Shell.

The figures from the federal regulatory agency come out the same day a poll shows Canadians are coming around to the federal government's position that oil and gas are the key drivers to the economy.

The NEB says Canadian demand for oil and gas will increase by 28 per cent in the same period, with fossil fuels remaining the primary source of energy for transportation and home heating.

Emissions standards for automobiles should slow consumer need for fossil fuels, the report said.  At the same time, there will be improved energy efficiency across nearly all sectors, allowing the economy to grow more quickly than energy demand.

“By 2035, the energy used per unit of economic output is projected to be 20 per cent lower than in 2012, due to improvements in energy efficiency,” the report said.

Power generation will shift away from coal toward gas and renewables at the same time.

But the slow growth of Canadian demand amid rising supply will force the industry to develop export markets.

And that will increase pressure for pipeline development and improved rail development, especially to the U.S. market and the West Coast. The NEB argues infrastructure is a bottleneck to developing export markets.

“Growth in export markets and the infrastructure to access them are key uncertainties in this report's projections,” the NEB said in its report.

According to the Oil & Gas Journal, Canada ranks third globally in terms of proven oil reserves, behind Saudi Arabia and Venezuela. Canada has an estimated 171 billion bbls, 98 per cent of it in oilsands.

Canada has more energy than it needs

"Canada has vast energy resources – more than enough to meet Canada's growing energy demand," said Gaétan Caron, chair of the NEB, adding that oil and gas are a “key driver of the economy.”

The NEB says the “most likely” price for West Texas Intermediate crude will be about $110 US a barrel, about $15 more than it is now. However its report does not predict new policies or political developments that could sway oil prices or affect demand.

The report comes the same day environmental groups are warning that firms investing in the oilsands are running out of room to store the contaminated water that is a byproduct processing crude.

Several firms have obtained permission from provincial authorities to flood abandoned tar sand mines with a mix of tailings and fresh water, but the impact of these toxic lakes on the environment is unknown, the Pembina Institute says.