If you follow energy-related news, you’ve probably seen discussions of “peak oil”, the moment when global production of oil hits its all-time maximum. Once peak oil has arrived, it’s all bad news with permanently declining production and increasing prices.
Our society has previously seen a peak oil event – in whale oil. Before the invention of the kerosene lamp in 1859, whale oil was used to light homes. The oil came from two species, the right whale and the sperm whale. Sperm whale oil was better, as it smoked less. As the whaling industry was winding down in 1878, Alexander Starbuck wrote a detailed history of the price and supply of whale oil.
Whaling for oil began in earnest around 1800, and mostly ended in about 1880 when the sperm and right whales were nearly extinct. By that time, kerosene refined from crude oil was taking over the market anyway (the first oil strikes in the U.S. were in the early 1860’s).
Whale oil production peaked in 1845 at more than 15,000,000 gallons. It then tapered off so that 20 years later production had fallen below 4,000,000 gallons. In the early years, the price of whale oil was stable at around $10 per gallon (in 2003 dollars). Before peak production was reached, the price began to increase. By 1845, the price was $14. As supplies began to get scarcer, the price continued rising to hit a peak of more than $20 per gallon. Then crude oil (and kerosene) was discovered and the whale oil market collapsed.
Will we see something similar with petroleum? There is one critical difference from today – demand for whale oil was not skyrocketing at the same time that supply was diminishing. If the whale-oil pattern holds but with today’s demand, the petroleum price increases will be larger and faster-paced. And the resulting shift to alternatives (conservation, renewables, nuclear) will also happen faster.
In April of 2000, a man advertised sperm whale oil for sale on e-Bay at $40 per ounce ($5,120 per gallon). All he got was a $2,000 fine for dealing in endangered species. In 1978 the last legal whale oil was sold in the U.S. – it was used for lubricating watches.
