Tracking Societal Changes / Impacts high energy costs

[Harry Morgan]

Last year a couple colleagues told me independently that they were getting rid of their second car because of the high cost of fuel. I also happened to be in some attractive rural areas over Bank Holidays & there seemed (anecdotally) to be fewer people around on nice days. I follow the news quite closely & I thought I'd start collecting egs where there seemed to be definite changes reported in response to high energy costs/ the changing economy:

27.8.11 article in The Guardian on second hand car prices says there has been a tendency for 2 car households to reduce to 1 car & for people to trade in for smaller, more fuel efficient vehicles.

late September 2011 saw both in Daily Telegraph & on BBC website statement that according to the AA, over Jan-August 2011, 15% less fuel sold in UK compared to 2008 over comparable period.

10/11/11 Daily Telegraph news item: 2 men convicted of stealing vegetables from an allotment. Offenders said "to be in extreme poverty" & stole to feed their families. Sentence: conditional discharge plus £105 costs & damages.

11/11/11 Yorkshire Post business section: Halfords CEO cited as saying that rate of MOT failure now gone upto 41%. Was 28% five years ago. 40% of tyres they see on cars are illegal as people wait till last minute before changing them. But bike sales up 10%.

14/11/11 Daily Telegraph. AA survey of 11500 members says lower income & rural drivers losing mobility due to high cost of fuel.

2/12/11 Daily Telegraph. Report according to Consumer Focus that more than 5 million households in England & Wales are now forced to spend more than 10% of their income on heating & lighting their homes [definition of "fuel poverty"]. This is up 25% from 2010 when 20% of households in this position. Annual dual fuel bill now £1293 on average. Varies from 40% of households in fuel poverty in Wales to 17% in SE. Circa 1/3 fuel poor in W.Midlands & NE.
Also, upto 2.5 million people in debt to energy supplier: average arrears for gas £320.

30/12/11 Daily Telegraph : survey of 2000 families by Bridgestone UK (a tyre manufacturer) claimed that 1 in 6 families in UK sold their second car in 2011 due to rising cost of fuel. 70% said they were trying to use their car less than last year.

2/1/2012 Daily Telegraph: according to petrol station trade body RMI Petrol & Experian Catalist, total fuel consumption by road transport declined 3% to 33.5 billion litres in 2011. Equivalent to 30 litres each less for Britain's 34million vehicles, or approx. 165 miles p.a. less each.

3/3/12: The Guardian. Citing Office for National Statistics: numbers of self-employed now at a record 4.1million (as of Autumn 2011). According to John Philpott, chief economic adviser at Chartered Institute of Personnel Development: between Summer 2008 & Summer 2011 nearly 27% of newly self-employed moved into "elementary occupations" or unskilled, intermittent odd-jobbing: stated that there is a sense that classic "employment" is a thing of the past for the groups who dominate the newly self-employed.

It would be interesting if others have come across similar reports that seem to indicate the sort of shifts in behaviour that one would anticipate happening more & more in the future as energy prices rise & the economy remains stagnant or starts declining in a similar way to Greece (where I have Greek friends & have heards some fairly shocking though anecdotal stories).

[biffvernon]

Here's a little anecdote from someone I know who lives in Portugal. He wrote this yesterday:

the use of energy here is on a completely different scale to UK. Families live on less than 1 kW hours per day, no heating in schools, you wear a coat in class. Log burners are what keep people warm at night but most of the portugues are in bed by 9 and don't bother, they live with the sun. Many cook on wood stoves, the bakeries all use wood fires.

[emordnilap]

Interesting jobs stats recently said that in the UK, about 4 people were unemployed per job vacancy. RoI: 26 to each job vacancy.

[Harry Morgan]

In the Daily Telegraph 9/3/2012:

According to the Energy Institute's Retail Marketing Survey petrol sales declined in 2011 by 7.7% compared to 2010 but diesel sales increased by 6.5%. 400 fuel stations closed in 2011 (a 4.6% decline over 2010. There are now 8480 fuel outlets (compared to 39,958 in 1967). 13.86 million tons of petrol was sold in the UK in 2011 & 13.91 million tons of diesel.

Morrison's published their annual results. This included the detail that petrol prices increased 15% in 2011 over 2010. Morrisons estimate that this removed £600 million disposable income from their customers. Beef also increased by 15%, lamb by 11% & wheat by 32%. Apparently the average Morrison shopper took an extra 20 minutes to shop in 2011 as they compare prices & look for cheaper items.

The income of the median UK family has fallen by 6.4% over the last 2 years according to the Institute for Fiscal Studies.

[woodburner]

The income of the median UK family has fallen by 6.4% over the last 2 years according to the Institute for Fiscal Studies.

That means many people at the lower income end will be more than 6.4% down, as there are plenty of rich b******s who have got much richer.

[snow hope]

The income of the median UK family has fallen by 6.4% over the last 2 years according to the Institute for Fiscal Studies.

That means many people at the lower income end will be more than 6.4% down, as there are plenty of rich b******s who have got much richer.

Technically I don't think that is actually correct. The median is the value that separates the higher half of a population from the lower half, ie. in the exact middle of the whole popluation. So if there were 30 million earners, it would be the 15 millionth earner.

I think you were maybe thinging about the mean value, which is what we usually think as the "average", ie the value you get when you add all the incomes together and then divide by the number of earners.

In this particular case, the median is probably the best way to monitor how incomes are in general falling. I'll get my coat.....

[Eternal Sunshine]

Last year a couple colleagues told me independently that they were getting rid of their second car because of the high cost of fuel.

I've been thinking of getting rid of my ONLY car due to the costs of owning and running it. The desperate pleas of my 15 year old daughter have stopped me for now. I'd be happy to get by on my bike & public transport. The cost of living is crippling.

[Harry Morgan]

I'm sorry to hear that.

As (I think) the sci-fi writer William Gibson said, "The future's already here; it's just unevenly distributed."

As a subscriber to the "slow crash" model, as we approach Peak, I think we can anticipate:

1. Increasing travel costs.

2. Increasing heating & lighting costs.

3. Greater (& more acute) social inequalities.

4. Greater geopolitical instability.

We seem to be experiencing this already.

Interestingly we're not seeing signs of "re-localisation". Rather, petrol stations are closing as people buy as cheap a fuel as possible from a fewer number of cheaper supermarket outlets.

Although I don't have a reference for this, last year I read that people in Britain are spending more money at fewer (larger) shopping centres. The Meadowhalls (Sheffield) & White Rose centre (Leeds) are benefitting apparently at the expense of smaller retail parks. Analysts are putting this down partly to a desire to minimise destinations to help "save" money.
This suggests to me that the cities will continue to grow & it will be the rural areas that will do worse as people cluster where the job opportunities are & where the larger markets will provide cheaper products.

We can anticipate

5. higher inflation generally

6 resulting in higher interest rates as credit dries up & financial risks increase.

7. This will also lead to higher unemployment.

We seem to be now seeing this as well (presumably it will become more acute). Food inflation (see Morrison's results in previous post above) are much higher than the published headline figures. The mortgage companies are starting to increase their Standard Variable Rates.

One also suspects that unemployment & under-employment is actually substantially higher than reported (see numbers of self-employed in previous post). Again, according to the Daily Telegraph (7/3/2012), citing the Office for National Statistics, 20% of all recent graduates (last 2 years) are currently unemployed & 36% are in low-skilled occupations. (such as "machine operators, postal workers or cleaners") . It is estimated that about 500,000 of the 1.5 million graduates who graduated in the last 6 years are in this position.

8. At some point past Peak I expect we'll slide from recession into depression.

Interestingly currently the economy is essentially stagnant rather than in recession after months of $100/ barrel plus. If the current c. $120-25/barrel for Brent crude continues for several more months it will be interesting to see what impact that has on growth.

9. At some point I assume a few years after Peak we'll start seeing physical shortages of goods, but for many people before that, much will have become very expensive / potentially unaffordable before that point is reached.

[biffvernon]

I know not what to say...

[Eternal Sunshine]

Food inflation (see Morrison's results in previous post above) are much higher than the published headline figures.

A while back I was wondering where all my money was going, so during November I saved all of my grocery receipts. When I added them up at the end of the month I was shocked at how much I spent. The cost of food has shot up. And I'm not decadent, I buy own brands, no meat and few prepared foods (although I am partial to the odd bottle of red wine...)



On a lighter note, how do I get hold of one of those cycle mowers Biff?

[woodburner]

Here is another http://www.youtube.com/watch?v=t7gEeyTKPr8 . Looks like it is hard pedalling to do a not very good job on a huge expanse of land that would be more environmentally beneficial if it wasn't a lawn. But then anything is more beneficial than a lawn.

[biffvernon]

You're not going to get neat stripes with that!

[woodburner]

.... neat stripes.....

Another burden of the lawn culture.

[JohnB]

Here is another http://www.youtube.com/watch?v=t7gEeyTKPr8 .

I'd have thought that one would work better than replacing the front wheel, but still far inferior to a scythe.

[woodburner]

............but still far inferior to a scythe.

Spot on. Someone dreams a complex machine and it's viewed as "must be better", when there are appropriate solutions that have been around for centuries. I do have a http://www.husqvarna.com/uk/products/lawn-mowers/64/ much better than a motor jobby as I can cut the lawn faster, and when ever I choose. I also have 4 scythes, but you need room to swing them.