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Page added on November 29, 2019

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What Can We Learn From Peak Whale Oil?

Consumption

The energy industry is based on what was once thought of as an inexhaustible natural resource, but over-exploitation and a growing reliance on oil has made extraction more and more costly and difficult as previously abundant areas have run dry. What’s more, in the areas where this natural resource has been depleted, what’s left behind is environmental devastation. We have reached peak oil–peak whale oil, that is. The year is 1846.

In the 18th and 19th centuries, sperm whale oil, known as spermaceti–which is extracted from the heads of sperm whales–became an invaluable source of lamp oil, as its smokeless flame made it an ideal fuel source, which in turn made it a commodity with high value and high demand. The whaling industry responded in kind, by massively ramping up their production and quickly driving sperm whales bear to extinction.

As reported by Gizmodo in their article “1846: The Year We Hit Peak Sperm Whale Oil,” the craze spread rapidly on both sides of the Atlantic. “Sperm whales were hunted mercilessly in the mid 1700s and early 1800s. A single, large sperm whale could hold as much [as] three tons of sperm oil, making them an incredibly valuable commodity — and in fact, they became the first of any animal or mineral oil to achieve commercial viability.

“And like any new innovation, consumption habits quickly followed suit. Americans and Europeans started using sperm whale oil to fuel lighthouses, street lamps, and public buildings. Wealthier folks stopped using home-made tallow candles, preferring the more hi-tech alternative. The spermaceti candle became so prevalent that it created a new light standard: the lumen.”

Sperm whaling spread rapidly off the east coast of the United States in the 1760s and 1770s, “moving from the east coast of the American colonies to the Gulf Stream, the Grand Banks, West Africa, the Azores, and the South Atlantic,” ramping up most critically between the years of 1770 and 1775 as whaling became a huge industry in  Massachusetts, New York, Connecticut, and Rhode Island, which together “produced 45,000 barrels of sperm oil in each of those years.” The success of the U.S. whaling industry soon caught the attention of European interests as well, with the French particularly keen to cash in on the endeavor.

Whales quickly became critically overfished in the Atlantic, pushing whaling enterprises further and further into faraway, colder waters and to hunt smaller and smaller whales. “The intense whale hunting drove the number of sperm whales down appreciably. It’s estimated that nearly 236,000 whales were killed in the 19th century alone,” reports Gizmodo. Negative externalities of the rapidly expanding whale oil industry were widespread and almost immediate in a textbook case of the tragedy of the commons, with seas turning into grizzly bloodbaths described by Gizmodo as a “showcase of terrors,” an epidemic of “whale widows,” and sharp increases in the price of whale oil as demand continued to grow and whale stocks were fished nearly into extinction and “whalers, after plundering the Atlantic, Pacific, and Indian Oceans, were having to chase smaller whales in colder and more extreme waters, while having to utilize bigger ships over longer periods of time.” In 1846 the industry reached a breaking point, culminating in what we now know was the moment that the world reached peak whale oil.

Even after demand shrank, however, whales almost certainly would have been fished into complete extinction as long as there was any profit margin–albeit a shrinking one–to be made. But whales were saved at the last moment by an unexpected and unrelated innovation. Gizmodo writes: “the industry peaked at this time for another reason — and it had nothing to do with what was happening on the oceans. Rather, it was the invention of a new fuel source, one that, quite literally, saved the whales.” This fuel source was kerosene, the petroleum product that started it all, initiating the petroleum industry in the United States that was later revolutionized by John D. Rockefeller’s Standard Oil.

So what can peak whale oil teach us about the modern day oil industry? The question is extremely relevant, considering the fact that peak oil has been in the news all week in the wake of Saudi Aramco’s record-breaking initial public offering. As part of the IPO, the world’s largest oil company released a prospectus including projections that oil demand will continue to grow until 2035, but that peak oil may occur even sooner, in the 2020s. On top of this, at least according to Bloomberg’s Liam Denning in his opinion piece “Brazil’s Oil Flop Is a Warning for Majors and Aramco,” Brazil’s recently lackluster sale of oil deposits–their biggest ever–was another knell for impending death of the oil industry, remarking that the sale’s failure indicated “expectations on the part of many investors that oil has entered its twilight years.”

Peak oil is an inevitability, but the timing exactly when it occurs will have major implications for the global economy as well as the globe itself. As the scientist community and the Intergovernmental Panel on Climate Change have consistently asserted, the majority of the world’s proven oil reserves will have to remain in the ground if the global community has any chance of avoiding catastrophic climate change and keeping the world from warming more than 1.5 degrees Celsius over pre-industrial average temperatures as stipulated by the Paris climate agreement. Denning argues that this fact itself could be one of the factors making peak oil approach even faster than previously projected. “Climate change concerns and impacts could reduce global demand for hydrocarbons and hydrocarbon-based products and could cause the Company to incur costs or invest additional capital.”

It’s unequivocally true that the issue of peak oil is arising not from an issue of scarcity, but because of a projected peak in oil demand. As Bloomberg reports, “The peak oil that’s talked about today is quite different from the concept that emerged in the 1950s, when M. King Hubbert, a Royal Dutch Shell Plc geologist, predicted that U.S. oil production would crest in the 1970s and the world would physically run out of oil.” It’s not just Saudi Aramco that is predicting that peak oil is just around the corner–although their admission of this fact is particularly salient. The International Energy Agency has also predicted that oil consumption will plateau in approximately 2030 “amid the use of more efficient car engines and electric vehicles,” as paraphrased by Bloomberg. “Renewable energy is taking off, electric companies are switching to cleaner-burning natural gas, and the cost of solar power has fallen 50% in a decade. That’s upending the business model of utilities, which were designed to deliver fossil-fuel energy from large power plants to homes and businesses.”

So what is the lesson from peak whale oil? It’s that innovation and new technologies are the key. We have to accept that both oil and oil demand are finite, and the peak is just around the corner. The question is what industry will fill that vacuum. Solar and wind are already major contenders and the sectors are seeing massive growth, along with a boom in the energy storage industry, which will potentially allow these variable energy production methods to be stable and viable replacements for fossil fuels. Then there are those that suggest nuclear fission is the answer. There is also geothermal, the world’s cleanest energy, which is already being developed with unprecedented vigor in countries like Japan and the United States. And then there are those new clean energy alternatives that are still in development but closer to reality than ever, like the clean energy holy grail of nuclear fusion. On, some, or all of these could be the key to the future of energy. The only certainty is that the future of energy will not be in oil.

By Haley Zaremba for Oilprice.com



62 Comments on "What Can We Learn From Peak Whale Oil?"

  1. REAL Green on Fri, 29th Nov 2019 8:18 pm 

    Inequality tends to do that Davy. Please go back on our meds so I don’t have to experience us getting hung. Or worse.

  2. po.com on Fri, 29th Nov 2019 9:14 pm 

    Hello Davy,

    Just an FYI that I hate your fucking guts.

    That’s everything in a nutshell/

  3. The Importance of Being Earnest on Fri, 29th Nov 2019 9:25 pm 

    “Why do all you Americans keep ganging up on me so much?”

    Davy, come now, the answer is quite obvious. You represent in one individual all of the ugly characteristics of human nature.

    In doing an internet search, the adjectives most frequently associated with your name are:

    1. Pathological liar

    2. Gross hypocrisy

    3. Rude and condescending/arrogant

    4. Biased and imbalanced

    5. Rotten/corrupted

    6. Supercilious to the extreme

    7. Annoying and repugnant.

  4. Davy on Fri, 29th Nov 2019 9:27 pm 

    The feeling is mutuel po.com. That’s why I don’t spend my time on this lame forum anymore and me an REAL Green areconsentated on our own lame blog.

  5. Cloggie on Sat, 30th Nov 2019 12:14 am 

    “The US needs to help them to spread democracy to China!”

    I’m in favor of that too!

    #BeerAndPopcorn

    Something needs to unleash WW3… and CW2 in its wake.

    https://apnews.com/1d90436ff3e948bda963bb6acf80264f

    “Angry China weighs options as Trump backs Hong Kong bills”

    #TheLastRegimeChange

  6. Real Green on Sat, 30th Nov 2019 12:33 am 

    I’m real hopeful that with the right drugs Davy, we can get your insane dumbass out of my head. If that doesn’t work, I’m gonna commit suicide. Just for you.

  7. JuanP insanity on Sat, 30th Nov 2019 4:22 am 

    Stupid
    Real Green said I’m real hopeful that with the right drugs D…

    full woke supremacist muzzies jerk so anyways i’m a cat lover and i love to run. sorry i’m being emotional i’m thinking about cats again said Somebody did something in london and Hague Love fo…

    full woke supremacist muzzies jerk so anyways i’m a cat lover and i love to run. sorry i’m being emotional i’m thinking about cats again said let’s forget todays attack by muzzies becaus…

    Davy said The feeling is mutuel po.com. That’s why I don’t s…

    The Importance of Being Earnest said “Why do all you Americans keep ganging up on…

    po.com said Hello Davy, Just an FYI that I hate your fucking g…

    Davy said Thanks Juan, but I prefer to be nown as the founta…

    REAL Green said Inequality tends to do that Davy. Please go back o…

    JuanP said I continue to be amazed by the wisdom shown here,…

    Davy said Why do all you Americans keep ganging up on me so…

    The Importance of Being Earnest said Here’s the deal with the Kunt. His bread was…

    Real Green said One more thing Davy. Why do we keep copying and pa…

    REAL Green said Davy, I know how much it upsets you when I questio…

  8. Where is stupid? on Sat, 30th Nov 2019 6:03 am 

    anyone heard from stupid?

  9. Davy on Sat, 30th Nov 2019 7:54 am 

    I’m write hear troll.

  10. JuanP ID theft on Sat, 30th Nov 2019 8:14 am 

    moring stupid. A troll has to be up all the time to be effective. You are a failure, troll.

    this is stupid:
    Davy said I’m write hear troll.

  11. REAL Green on Sat, 30th Nov 2019 10:44 am 

    Do not feed the JuanP ID Theft troll.

  12. Dooma on Sun, 1st Dec 2019 6:48 am 

    Well said, Mak.

    Team America is not going to come to the rescue of ANY country or province that China has an issue with. Including countries such as Taiwan and Japan. They (China) are getting ready to show some real power in the South China sea. The US keeps sailing close to China, spouting bullshit about “freedom of navigation”.

    America is bogged down in other never-ending trillion-dollar conflicts. It has massive domestic trouble brewing. And a President that acts like a 14 yo boy on twitter.

    Basically, they are in too much trouble to even contemplate taking on China. Come on Mob, get a grip on reality.

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