The latest report from the Calgary (Alberta, Canada) Herald was nothing but good news: The steadily declining production of light oil from 2002 to late 2010 has reversed itself completely and is now not only proving the power and principles of a free market but “will change the way we think about oil, with many weighty consequences…” says blogger Peter Tertzakian. The graph he provided here shows Alberta’s production declining by about 16,000 barrels per day (B/d) every year since 2002, dropping to just over 300,000 B/d in late 2010. Now, thanks to new capital, new technology, and new enthusiasm, production is close to 400,000 B/d. It also “could heighten the blood pressure of a few peak oil theorists,” said Tertzakian.
He refers to the theory first offered by M. King Hubbert in 1956 that claimed that oil production in the United States would reach its peak between 1965 and 1970 and begin to decline thereafter. It was based upon the assumption that the amount of oil reserves is fixed and that it is analogous, according to peak theory supporter Colin Campbell, to a glass of beer: “The glass starts full and ends empty, and the faster you drink it, the quicker it’s gone.”
From that theory, Hubbert then claimed that this would drastically alter life in the United States, predicting chaos, war, starvation, economic decline and possibly even the extinction of mankind.
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Map: Location of the Athabasca oil sands in Alberta, Canada