Jeremy Leggett: Oil still has us over a barrel

The discovery of a number of oilfields is good news for global energy but it does not mean the threat of peak oil is over

The spate of recent giant oilfield discoveries in the Gulf of Mexico, Iran, Uganda and Brazil is welcome. A cohesive society will depend on plentiful supplies of oil for years to come, no matter how quickly we can mobilise low-carbon electricity stored in batteries and other climate-friendly fuels of the future. But concerns that we face a premature descent of global oil production over the next decade are unchanged.

The full list of reasons to worry was summarised by the UK Industry Taskforce on Peak Oil and Energy Security (ITPOES) in its report last year. Three key concerns on that list are the rapid rate at which existing oilfields are depleting, the length of time it takes to bring the increasingly rare finds of new giant oilfields on stream, and the inadequate levels of investment made by the oil industry

In the 2008 International Energy Agency (IEA) World Energy Outlook, the IEA conducted an oilfield-by-oilfield study of the world’s existing oil reserves for the first time. (One might reasonably ask why they had not done so before.) The average depletion rate of 580 of the world’s largest fields, all past their peak of production, is 6.7% a year. Without investment in enhanced oil recovery (the various techniques petroleum engineers have of boosting recovery factors in their oilfields), the figure is 9%. In a key chart in the IEA’s report, crude production begins a steep descent in 2009, falling steadily all the way from about 70 million barrels a day to below 30 by 2030. The depletion factor might better be called a fast-emptying factor.

This is doubly alarming because, even with demand for oil being destroyed fast by recession in the west, the IEA expects the rate of demand growth