Prices: Oil, Whiskey and Rum?

[Capn Jimbo]

If things go as predicted, the increasing price of rum will be the least of our worries...

About ten years ago I first got a whiff of what is now a famous article, "The End of Cheap Oil" by Jean Laherière and Colin Campbell, two respected oil industry veterans and published in 1998. And recently I received a Malt Maniacs E-pistle (By Nabil Mailloux, Canada), regarding oil and the price of whiskey, and by extension to rum.

Here's my summary of this fine article:

Even earlier, in 1970 a Mr. M. King. Hubbert, a geologist of thirty years from Shell Research Labs, predicted that oil production in the United States was at its peak. This proved true. His models have been verified and we are now experiencing a global peak in oil production. From now on oil will become dearer and dearer with each passing year. And although we won't run out for some time...

It's gonna get expensive. Very expensive.

Worse yet we are also approaching a peak in natural gas, and then energy in general unless we move aggressively toward alternative energy sources. Not likely. Here's the problem:

It takes a considerable amount of oil to grow barley or cane, to distill it, to manufacture the bottle and label and to ship and deliver it. And that's just the beginning. Consider this:

1. 0.3 liters to grow the barley for 1 liter of whiskey
2. 1.0 liter to distill it
3. 0.1 liter for primary transport

And so on.

Already distillers are installing higher efficiency boilers, anaerobic digesters to convert waste into energy, better recovery and use of hot water, and even the use of solar power to drive stills.

Oil has been predicted to go to $200/barrel by 2012 for a rough doubling - yes doubling - of energy costs. And due to dwindling oil stocks declining at exponential rates it will only get worse, and faster. Consider that when I created this website just two years ago you could buy these world class rums (representing the five basic styles of rum).

1. Mount Gay Extra Old - was $32, now $52
2. Appleton Extra - $22, now $34
3. Matusalem Gran Reserva - $26, no change
4. Barbancourt - $19, no change
5. El Dorado 15 Year - $25, now $35

Total: was $124, and just two years later is $167! That's a 34% increase before we may see energy doubling. Not a pretty picture. Add to that increasing population, dwindling resources and diminishing earnings, and...

Well, you get the picture.


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On a positive note, I just found an extremely rare bottle of Smith & Cross (London) Traditional Jamaica Rum (pure pot still, Plummer and Wdderburn style). This is an amazing powerful rum using extended fermentation with the addition of dunder, and that boasts of up to 500 esters (flavors) - hundreds more than ordinary rums.