Doug Griffiths said the province is moving too quickly and needs to step back.
"We're growing the oilsands so fast, we don't have enough warm bodies or equipment left to upgrade (the raw bitumen)," Griffiths told 1,200 people who attended the final party-sponsored debate in the race to replace Premier Ed Stelmach.
"We need to plan a proper phasing-in of the oilsands development so we can get the maximum value out of upgrading," he said.
"This is not just how much we can extract and ship to the rest of the world because they want it. It's what kind of value we're going to get for Albertans so we can build a better long-term future."
Griffiths said they also have to look at the impacts on the infrastructure and labour pool in the oilsands hub city of Fort McMurray, and make sure the expansion doesn't harm the environment.
"It doesn't mean we're opposed to the oilsands. It's just smart business."
The issue resurfaced this week when former Alberta premier Peter Lougheed, who shepherded the oilsands through its growth years of the 1970s, publicly criticized the Keystone XL pipeline.
The pipeline will extend an existing line and ship raw bitumen through to refineries in Texas.
Environmental activists in the United States are urging President Barack Obama to kill the XL pipeline, saying it will harm the environment and that the oilsands operations contribute to greenhouse gases.
Lougheed said the Keystone XL represents a multibillion-dollar opportunity lost, with Alberta shipping raw product south to create upgrading jobs in Texas rather than upgrading at home.
Candidate Gary Mar, the Alberta envoy in Washington before quitting the job to run for the leadership, said he'll back the XL line.
He said the line is just one part of a grander strategy, which includes the province's current program that offers financial incentives to petroleum producers refining within provincial boundaries.
"I support creating new markets in places like India and China, and to do that we need to increase our production of oilsands," said Mar.
Rick Orman, an energy minister in the era of former premier Don Getty, said he will push for more oil sales with Asia.
"The fact we trade 90 per cent with the United States is a mistake," said Orman.
"They've been a good trading partner, but I think it's incumbent upon us as a government to make sure we diversify the economy."
The oilsands boom has allowed Alberta to get out of debt in the past decade, but has also created heavy infrastructure demands on Fort McMurray and throughout northern Alberta.
The candidates agreed the industry can't expand without help on the ground.
Orman said Fort McMurray residents have told him they're lagging three years behind in construction.
"That's unacceptable," he said. "(We) need to make sure our infrastructure, transportation, schools, roads, and bridges are there."
Alison Redford said the province must work with Fort McMurray on solutions, and not just dictate.
"The decisions that need to be made for Fort McMurray need to be made in Fort McMurray," said Redford. "They can't be made by a secretariat in Edmonton."
Doug Horner said oilsands expansion begins with workers.
"We need an agreement with the federal government on our immigration policy," said Horner.
"We need a made-in-Alberta immigration policy that allows us to take control of that and bring in the number of workers that we need."
Ted Morton said the government must balance the growth needs without polluting the surrounding air, land, and water.
Morton said he's done that with the draft blueprint Lower Athabasca Regional Plan, which was created when he was minister of sustainable resource development.
"If we want to control our economic future, we have to control our environmental future," said Morton.
"We need to do a better job there."
Party members have been voting this week in advanced polls, with the balance casting ballots Saturday.
If no candidate gets a majority of votes on Saturday, the top three vote-getters will move on to a final run-off round of balloting on Oct. 1.