Over a million UK drivers driven off the roads?

The Daily Telegraph are reporting a study by Sainsbury's Car Insurance that 1.3 million UK drivers have given up driving over the last 12 months. Apparently the average UK driver is spending £1,720 per year to fuel their cars, an increase of almost one third on the year before.

So, is there any other evidence for reduced oil based fuel use in the UK?

Taking a look at BP's Statistical Review of World Energy 2011, we can plot UK oil consumption. UK oil consumption peaked in 1973 at 2.2 million barrels a day, but the oil price shocks of the 1970's caused a structural shift in energy use in the UK and much lower oil consumption as oil was no longer burnt to produce electricity and cars became more efficient.

The recent oil consumption history in the UK (shown in the graph above) shows a consumption peak in 2005 followed by 5 years of declining consumption. The recent UK consumption peak coincides with a number of important structural changes in the oil market.

• Firstly, the UK ceased being a net exporter of oil in 2005 and became a net importer of oil for the first time since 1980.
• Secondly, the amount of oil on world markets reached a peak in 2005 and has been in decline ever since (see colourful graphic below).
• As a result of the decline in oil available on world markets and increasing demand, the price of oil broke out of its normal trading range of up to $40 per barrel in 2005, spiking at $147 in 2008 before crashing to $37 per barrel due to the financial crisis (see plot of Brent oil price below).
• To date in 2011, the average price of oil is around $110 per barrel, the highest annualised dollar price on record.

The rising price of oil and hence transport fuel combined with a weak economy has reduced UK oil consumption by almost 12% since 2005.

Meanwhile, UK oil production, which peaked in 1999 at 2.9 million barrels a day, has plummeted (shown in the graph up top) to 1.3 million barrels per day in 2010. That is a drop of 54% in 11 years.

And as UK oil production drops further, more oil will be imported into the UK at increasing cost, unless of course consumption drops at a faster rate than the dramtic decline in production.

With the potential for further oil price volatility due to a shrinking pool of world oil exports, the outlook for the affordability of oil based fuel looks uncertain in the near future, with shortages and rationing a possibility in the medium term and a geological certainty in the long term. In the UK, our ability to pay for increasing imports of oil and natural gas must also be open to question.

Update 8th July 2011: according to reports today, the AA have stated that UK drivers bought a billion fewer litres of fuel at the start of this year compared to the same period in 2008. 

And if you are thinging about electric cars with lithium-ion batteries powered by our increasingly renewable electricity supply as an alternative means of personal transport, then consider the following warning from Peter Secker, the CEO of the Canadian Lithium Corporation

Canada Lithium Corp. which is digging a mine in Quebec, said demand for lithium may outstrip global supply by 2015 because China will need more electric-car batteries that contain the metal. "If you are a strong believer in the green economy and electric vehicles, then demand is going to exceed supply by 2015-2016," CEO Peter Secker said in a telephone interview.

And it is not only oil production and consumption that is decreasing dramatically as figures from the Society of Motor Manufacturers and Traders show, estimated new car registrations in the UK stand at 1.93 million, down over 25% from the peak in sales in 2003.