Bob - thanks very much for this contribution. For further information, Bob has been involved in a discussion with BERR about energy prices and this article hit my mail box at midnight.

Two things that strike me. First the uniformity of fuel prices in the top chart. The escalating rise that is taking place and will continue (unless we have massive demand destruction through price or conservation) will be unique in our recent history - I guess thats what you might call an Electric Shock.

Second, the lower chart is a fascinating portrayal of how our living standards have improved. But this is not just through the magic of economic growth - the magic is worked by abundant supply of high eroei energy sources. How do we know we are at a turning point? Well its obviously too early to say from the lower chart. But anyone with time to read the 2,786,934,907 words on TOD - will learn that we know pretty well for sure that we are at a turning point.

Add growing population to the mix and the return trajectory will not mirror the entry trajectory.

Demand can be destroyed in a proactive and virtuous way via conservation. Being able to do exactly what we do now but using a lot less energy. Energy efficiency is King and I wholeheartedly support your effort here Bob and any more support that TOD can offer - the door is open.

Thanks for this Bob. Your closing sentence is interesting. I do wonder if we are so much richer now than we were in the past. I think in many ways we are considerably poorer (we have less decent topsoil available these days for starters!). Consider physical things, large projects that we could afford to do decades ago yet the equivalent is now out of reach. In the UK things like the London Underground train system, the motorway network and in little more than a decade the construction of the 7 AGR nuclear power stations. We don't seem to have the capital to do things of that scale any more, how can this be if we're richer than ever?

I would suggest we have be living off, drawing down upon, previous wealth and investments for quite some time now. Not only is this a fundamentally unsustainable regime but is also particularly problematic when we consider the large capital investments required to move our energy systems away from fossil fuels. We might simply not be rich enough.

Bob, the contribution is much appreciated. Not quite the whole country was covered by N Sea gas however; there are still 1.5m of us, mainly in rural areas, whom the former Gas Council and subsequent private energy companies did not see fit to connect us. As a result those 1.5m households without gas are paying a lot more for their energy in the form of either electricity, heating oil or LPG.

I'm using heating oil and according to calculations I ran the other day am paying 173% more per Kw vs best quote for gas supply. With no tax on heating oil apart from 5% VAT which is applied to all UK energy bills heating oil costs have more or less tracked the crude price. To fill my oil tank cost around £250 ($360) in 2001; a fill up today is almost £1500 ($2925). If Gazprom's $250/bbl price forecast for oil within next 18 months is correct cost of a fill would hit £2500 ($5000).

From reports I've seen energy costs are already causing hardship in rural areas without gas supplies and an increasing number of thefts of heating oil are being reported, in some cases the entire tank has been emptied. It's also interesting to note that virtually all the publicity has been devoted to domestic gas prices and motor fuel prices, both of which have risen far less in percentage terms vs heating oil. Fuel protests have been more or less entirely confined to motor fuel which in UK (due to dampening effect of taxation) has risen much less in percentage terms than domestic energy supplies whether they be gas, electricity, heating oil or LPG. We might conclude that many are more concerned about their cars than keeping warm!

Thanks for an informative post.
On the road back down in energy it is apparent that a society cannot continue in it's present form at at the same energy levels as previous ones - for instance, the society of the 1900's would not have been able to run on the energy inputs of that of the 1850's, or that of 1950 on that of 1900 - IOW the energy inputs and prices shape the society.
I am wondering what stops at what level of energy input?
What are the minimum supplies needed to keep our society going?
How much oil is needed for the ancillary equipment to keep the nuclear reactors going?
How much to stop the London Underground flooding, or the barrage on the Thames working?
Power for hospitals?
For agriculture?
IOW, given energy shortages, what stops working, when and in what order?
It is plain that even in the event of a power cut a lot more things would stop than in the 1970's, with every computer down and business at a halt,and with the petrol stations unable to pump fuel.
How are the emergency services set up to run with the power out?
It is now not if, but when, so since the Government is paralysed we need to get some idea of how things will hsape up if we are not to be caught totally unprepared.
I don't know what I can do to help, but perhaps those of us in the UK can at least fadge up a rough picture.

Bob,

A fascinating post. And thanks to Euan for bringing it to TOD Europe.

I am also interested in the history of domestic energy, with regards to revisiting some of the old technologies, that fell by the wayside, with the introduction of large scale centralised power production and energy distribution networks.

Orwell's 1936 essay on urban poverty in the Northern towns, "The Road to Wigan Pier" looks at poverty from a housing and diet perspective related to income, but only briefly touches on energy poverty.

For example in Chapter 6, one family, with 32 shillings income per week, were spending 1s 3d on gas and 2s on coal per week. This was almost the same that they were spending on 28lbs of flour for breadmaking costing 3s 4d.

In Chapter 5, Orwell details a coal allowance of 1s 6d - equivalent to about a hundredweight (51kg) of coal, given for the 6 weeks either side of Christmas.

My own father in law (90), remembers the coalman delivering about 1 sack per week, during his childhood in the early 1930s, and the coming of electricity to his village in about 1930.

Your figures have helped give some indication of the magnitude of the fuel poverty, experienced by many in the 1930s.

We speak of fuel poverty these days, when more than 10% of income is spent on domestic energy to keep warm. A recent statistic quoted that for every 10% increase in the domestic energy price that 400,000 additional UK citizens enter into the fuel poverty category.

http://news.bbc.co.uk/1/hi/business/4656517.stm

However, we are no longer living in the 1930s, reliant on 20% efficient, open coal fires for our basic source of heat.

There have been vast improvements in the efficiency of home heating systems, with even the older central heating boilers being 60% efficient, and the newer condensing gas boilers being capable of reaching 90% efficiency, if correctly sized for the property and benefiting from electronic control.

Insulation returns the greatest return on investment for reducing home energy bills. With 60% of the UK housing stock built prior to 1960, there would be a terrific opportunity to create employment and industry in running a national insulation programme to upgrade the older housing stock. With new-building work floundering, this could be a way to keep the construction industry busy for the next few years of recession.

We are however, as a nation, becoming too reliant on natural gas, both for home heating and for much of our electricity production. With the upward trend in wholesale gas prices, and the ever increasing need to import gas from overseas, the UK consumer is about to see significant rises in both heating and power costs. The full extent of these rises has seen little formal discussion - perhaps TOD could run some future articles regarding the background to energy insecurity that the UK faces as a result of short-termist policies in the 1980s and 90s?

I, for one, am hedging my bets. I installed a condensing gas boiler in 2005, but have additionally installed a wood burning stove with back bolier, and a back-up generator. Even if it costs me £0.50/kWh, having some electricity is better than having no electricity.

2020

Bob thanks for doing this and giving my work a mention (Note: we collaborated on an Open University course, T206 on energy efficiency). As Bob mentions our energy expenditures are still very low by historic standards: we only spend now about 3% of household income on domestic fuel compared to a relatively constant 6% from the 1950s to 1980s. Even if energy prices were to double, we would only be returning to the situation of a generation ago, and we have the possibilities of using vastly more energy efficient appliances and homes. Would it really be a hardship to halve our energy use under these conditions?
As Vaclav Smil so aptly puts it:
Such reductions would call for nothing more than a return to levels that prevailed just a decade, or no more than a generation, ago. How could one even use the term sacrifice in this connection? Did we live so unbearably 10 or 30 years ago that the return to those consumption levels cannot be even publicly contemplated by serious policy makers because they feel, I fear correctly, that the public would find such a suggestion unthinkable and utterly unacceptable?
Energy at the crossroads, 2003: p.338.
I must also point out that 'happiness' studies reveal that our contentedness or wellbeing levels peaked then, and have since declined. Perhap using less energy is the way to a happier life?

Thanks for a great post

I am one of those elderly (71) oil burning rural dwellers with no access to gas. laat year a years supply of oil cost £450, This year a similar quantity cost £870,

Added to fuel cost has to be boiler maintainence and repair, about another £100 per year, In addition the system is ageing now and will require some replacements

I am tempted by electric off peak storage heaters but who knows what will happen to electricity costs

We have one woodburner and free wood, I could try a wood based system but neither of us are getting younger and the cutting and hauling is physically energy intensive

I find it very hard to know what to do for the best. I have just bought next winters oil and we can keep the system going for another year so the decision can wait a few months but a decision must be taken

Bob - you said

we should be able to afford decent insulated homes

And I agree with you 100% here. So lets take a look at how UK listed manufacturers of home insulation materials are faring:

Charts from
http://uk.finance.yahoo.com/

OK - so there is a severe downturn in house building. But a reliable source also told me this:

all have been dreadful recently as local and central govt spending has dropped off a cliff

I'm left wondering if initiatives to insulate the housing stock are being starved of cash - whilst we crack on with building roads and airports. I'm beginning to find it difficult to contain my anger.

We need very urgently to reduce demand for oil and gas.

I think we need to extend the analysis. We need to go back another 100 years to about 1800 to put the analysis in context. 1750 - 1800 was the beginning of the coal age, which supported the industrial revolution.
As energy became relatively less expensive (compared to previous centuries) the cost to grow food and build housing also declined. The average couple could support more children. Cheap energy allowed more "wealth" to be created. We have all seen the chart with a steady decline in all commodity prices from 1800 to 2000.
Question: what did the average family spend on energy of all types in 1800, in 1900, in 2000 as a percentage of income?

If you look at global population growth over 200 years, it maps very well to energy usage. Cheap energy allowed the world to "carry" more people.

If the average family has to spend triple on all types of energy, what does this mean for them, and for the economy.

the book "The Great Wave" actually takes this analysis back to the middle ages. we have gone thru this cycle several times in the past.

Bob

It's good to see that the Open University continues to do good work on energy realities in the UK.

If you and your colleagues have the resources, it would be very interesting to learn how "affordability" has varied over time as a function of household income - and, in particular, to learn more about recent history, the current situation and trends. I doubt very, very much whether lower income households are spending anywhere near as little as 3% of income on energy/fuel. Add a zero and you might get closer. Unfortunately for these households options for escaping the crunch are very limited - and all the more important.

Keep up the good work.

- Colin Moorcraft

http://www.belspo.be/belspo/home/publ/pub_ostc/CPgen/rappCP10_en.pdf

An interesting and detailed 100+ page paper on the sustainability and costs of 4 basic products/services: bread, water, transport and home heating, from 1800-2000. How many of us in the high consumption countries would need to work the 25 days it took a Belgian labourer to earn a ton of coal in 1825?

Also, I followed Energy for a Sustainable Future at the Open University last year and would definitely recommend it. My only complaint was it really needs to be much longer. Great text books!

Here is an e-mail I sent to the BBC in response to their asking what we would like to see covered in the news:

We are going to get very cold in Britain soon.
A lot of power production is getting old and will be retired, and there is no way it can be replaced in time with renewables, nuclear or coal.
We are relying on natural gas and LNG imports.
The price of these is going up and supplies are not increasing fast enough.
In Germany and the Netherlands houses use a third as much energy as in Britain to stay warm, as they are better insulated.
That means that they can afford to pay 3 times as much for gas as we can.
We won't be able to run industry and commerce much of the time either due to power cuts.
The BBC needs to investigate the world of power cuts and dark and freezing houses that we will shortly be in.

Someone has to wake up, sometime

Glad to read all this debate, and that our old publication 'Energy use and energy efficiency in the UK Domestic Sector up to the year 2010', by Rodney Evans and I, done 20 years ago, is still relevant!

That has energy data going back to the 1920s. One point of interest is that in 1920, the average energy use per dwelling (or household) was 161 GJ (about 5.5 ton of coal), and has fallen consistently since then to 77 in 1985. (Table 5.5b). So that indicates the enormous efficiency improvements made as we have shifted from coal (fires) to electricity and gas, and insulated our houses. {Note: until the 1960s all gas was from coal).

What we should also note is that what we are interested in is energy services (heating, lighting, cooking etc) rather than consuming fuels. Thus even if energy prices were to double, as long as we can double efficiency, then the cost of energy services will remain the same. In the past we paid far more of our income for fuel because we used it so inefficiently (like the open coal fire or gas light).
So (in the long term -decades) it is perfectly possible to halve our consumption (and return to 1960s level) but enjoy 21st century levels of energy services. And the less energy we use the easier it is to provide it through household renewables (solar, wind, and biomass).