The trends make depressingly familiar reading, presenting a dramatic collapse UK’s primary energy sources with the exception of small growth in local coal production. Increased reliance on coal itself is problematic due to increased carbon dioxide emissions in comparison to any other energy source.

The magnitude of these declines is quite shocking, totally 11.5% reduced total energy supply from Q205 to Q206. This really should be a significant story but I don’t see DTI document being discussed anywhere in the mainstream media, sustained surely double digit declines in production can’t continue for long without significant impact?

Looking at the detail for oil:

Total indigenous UK production of crude oil and NGLs in the second quarter of 2006 was 13.2 per cent lower than a year earlier. During the second quarter of 2006 the UK was a net importer of oil and oil products by 1.6 million tonnes, whereas in the second quarter of 2005 the UK was a net exporter by 1.1 million tonnes.

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Despite this decline the country is doing nothing to address the depletion of the indigenous resource. In fact the opposite is happening, not only is North Sea oil depletion barely on the agenda but as we transition into an oil importing country our oil consumption is increasing. Wouldn’t this shift from net exporter to net importer be a good reason to address growing oil consumption?

During the second quarter of 2006 the UK was a net importer of oil and oil products by 1.6 million tonnes, whereas in the second quarter of 2005 the UK was a net exporter by 1.1 million tonnes.

The picture is similar for gas:

Total indigenous UK production of natural gas in the second quarter of 2006 was 14.4 per cent lower than in the corresponding quarter a year earlier. In the second quarter of 2006, the UK reverted to being a net exporter of gas (1.2 TWh).

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In contrast to oil, gas demand is however falling. Total gas demand was down 7.9 percent whilst gas used for electricity generation was 14.1 per cent lower than in the second quarter of 2005 and domestic use 3.3 per cent lower. The domestic falls were attributed to milder weather in 2006 compared to 2005.

The bulk of the reduced gas consumption is being replaced with increased use of imported coal:

Coal supplied 10½ per cent more electricity than in the same period a year earlier, while gas supplied 14 per cent less.

The reality of this situation can not be masked indefinitely. As depletion drives imports the impact on the macro economy will grow. It is inevitable that UK energy consumption will fall over the next decade, for this reason the UK urgently needs a policy of energy consumption reduction rather than the current (lack of?) policy which can't avoid reduction but rather will achieve it through disruptive demand disruption as the cost of imported energy spiral.