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Oil prices were down early…
As efforts increase to reduce emissions, and the price of oil continues to rise, encouraging people to cut their energy consumption is quite important for many governments and organizations; although persuading people to reduce their usage of luxury items in order to lower energy consumption, is proving rather difficult.
The UK seems to have discovered a way to cut consumption rather quickly and effectively; increasing energy prices.
A new report released by the UK’s Office for National Statistics stated that across England and Wales, between 2005 and 2011, the average consumption of natural gas and electricity fell by 25%, due to the increase in utility bill costs of 28%.
Unlike the US, which has experienced a shale boom causing natural gas prices to plummet, gas prices in the UK have risen, along with electricity costs. These rising prices combined with a deep recession that has gripped the country’s economy, provided little alternative to citizens other than severely cut back on their energy consumption in an effort to reduce the bills.
Whilst this is likely to be the main reason for the reduction, the Office of National Statistics also offered other points that may have resulted in such a trend in the UK.
It noted that homeowners have worked hard to improve the energy efficiency of their homes, with 60% of homes in 2011 boasting roof insulation, compared to 44% in 2008. The UK also introduced a law forcing all houses and white goods for sale to show an energy rating, which has helped people to buy more energy efficient properties and items. Homeowners have also reduced energy consumption by modernising heating systems.
Energy rating charts help provide a clue as to a property’s efficiency and environmental impact. (Property Inventory Services)
Natural gas accounts for two-thirds of all energy consumption in the UK, so the high prices really have had a large impact on demand. In the East Midlands natural gas use fell by 37.5% from 2005 until 2011.
The Energy Information Agency has also estimated that energy use per person in the US will fall by 2040 as energy efficiency is increased across the country.
By. Charles Kennedy of Oilprice.com
Charles is a writer for Oilprice.com