Energy Prices and Resource Depletion: Lessons from the Case of Whaling in the Nineteenth Century

The Hubbert model assumes that the worldwide production of crude oil will follow a bell-shaped curve. Oil prices are expected to increase, or even to spike up, at or after the production peak. However, the Hubbert model provides no description of price trends. We also lack historical data that can be used as a guide, since so far there have been no cases of a complete, worldwide depletion of a mineral resource. Nevertheless, historical examples of worldwide Hubbert-like behavior can be found with biological resources. The present paper examines the cycle of whaling in the nineteenth century, showing that for both whale bone and whale oil the smoothed price curve shows a gradual increase that starts well before the peak. A strong increase in the amplitude of price oscillations is also observed after the peak. If the same trends will be observed for crude oil, the production peak may not be such an epochal change as it has been sometimes described.