Open challenge to long-wrong Michael Lynch, who predicted back in 1996 “real oil prices FLAT for the next two decades”: I’ll take your bet on $30 oil.


A guy who has been wrong on oil prices longer than most has managed to convince the New York Times to give him some of their precious op-ed space to issue yet another sure-to-be-wrong prediction.  That would be energy consultant Michael Lynch, with his remarkably content-free piece, ” ‘Peak Oil’ Is a Waste of Energy,” asserting:

Oil remains abundant, and the price will likely come down closer to the historical level of $30 a barrel as new supplies come forward….

Here’s my bet to Lynch.  Let’s take the average price of oil from 2010 to 2015.  For every $1 a barrel it is below $40, I’ll pay you $200, if you pay me a mere $100 for every $1 a barrel it is above $40.

That should be a no-brainer since I am giving him 2-to-1 and spotting him $10 a barrel off of what he says the right price is.

I wasn’t going to post on this since I have blogged endlessly on the painfully obvious reality that we are at or near the peak (see “Peak Oil? Bring it on!“).  It is so obvious that the International Energy Agency, which until recently had been a bastion of relatively staid and conservative and hence useless energy prognostication, has begun desperately trying to warn people of what is happening — see World’s top energy economist warns peak oil threatens recovery, urges immediate action: “We have to leave oil before oil leaves us.” Heck, half of the most cautious “show me the money” people in the entire energy business agree (see “Half of oil & gas CFOs say we are peaking“).

But one of the congressional staffers who reads this blog sent me something I didn’t know existed — an online transcript of a 1996 Congressional hearing “U.S. energy outlook and implications for energy R&D : hearing before the Subcommittee on Energy and Environment of the Committee on Science, U.S. House of Representatives, One Hundred Fourth Congress, second session, March 14, 1996” (hard to read HTML here, massive PDF here).  I was Acting Principal Deputy Assistant Secretary, at DOE’s Office of Energy Efficiency and Renewable Energy, and the House GOP were basically putting me on trial for

  1. Predicting that oil prices were going to rise in the future because of our growing reliance on oil from unstable regions and
  2. Using that as an argument for why we needed to dramatically increase funding for clean energy R&D.

That prediction and argument were published at length the next month in my Atlantic Monthly piece (coauthored with Deputy Secretary Charles Curtis), “Mideast oil forever: Congressional budget-cutters threaten to end America’s leadership in new energy technologies that could generate hundreds of thousands of high-wage jobs, reduce damage to the environment, and limit our costly, dangerous dependency on oil from the unstable Persian Gulf region” (see also here).

And who did the Republicans drag in as their witness to rebut me — one “Michael C. Lynch, Research Affiliate, Center for International Studies, Massachusetts Institute of Technology.”  Even back then, in the good old days of $17 oil (1995 average nominal price or $24 in 2008 inflation-adjusted dollars), Lynch was predicting flat oil prices for decades:

In previous work, I have shown that past oil market forecasts were biased towards rising  prices and declining non-OPEC production.  Correcting for the supply pessimism leaves a  forecast in which oil markets remain in surplus over the long-term, suggesting that oil prices will remain weak for the indefinite future….

Conclusions: Prices are much more likely to be weak than strong….

the ongoing technological revolution in the industry, combined with managerial improvements and a more friendly fiscal environment in  oil exporting countries, will keep real oil prices flat for the next two decades.

a flat oil price forecast appears to be much more consistent with historical behavior than the rising price forecasts of DOE and the lEA. A declining price, or flat at a lower  level, would hardly be unrealistic.

Not clear how an energy consultant can keep making the same predictions with his track record.  Not clear just how wrong your past predictions have to be before the NYT won’t publish your op-ed where you repeat the same exact wrong predictions.

For the record, here is in fact what happened in the decade after Lynch’s prediction of flat real prices:

oil prices

Real prices more than double in the subsequent decade.

Lynch’s analytical worldview is that “a flat oil price forecast appears to be much more consistent with historical behavior.”  Well, the future is just like the past, until, of course, it isn’t.  We aren’t making more oil, we are, however, consuming more and more.

For completeness sake, and with apologies to my regular readers, as Dr. Fatih Birol, the chief economist at the International Energy Agency (IEA) recently explained:

Dr. Birol said that the public and many governments appeared to be oblivious to the fact that the oil on which modern civilisation depends is running out far faster than previously predicted and that global production is likely to peak in about 10 years – at least a decade earlier than most governments had estimated.

The IEA’s work makes clear that for oil to stay significantly below $200 a barrel (and U.S. gasoline to be significantly below $5 a gallon) by 2020 would take a miracle “” or rather 6 miracles see “Science/IEA: World oil crunch looming? Not if we can find six Saudi Arabias!”  See also “Merrill: Non-OPEC production has likely peaked, oil output could fall by 30 million bpd by 2015,” which noted,

Steep falls in oil production means the world now needed to replace an amount of oil output equivalent to Saudi Arabia’s production every two years, Merrill Lynch said in a research report.

So how about that bet?  Michael Lynch?  Anyone?

One final note:  The conservatives in Congress thwarted efforts to ramp up clean energy R&D in the 1990s, and the situation has become so dire now, that increased R&D, while useful, is quite secondary to the urgent need to massively deploy clean energy technology, as Obama and Congress have done in the stimulus and the major fuel economy deal earlier this year, and as they hope to do in the climate and clean energy bill.

41 Responses to Open challenge to long-wrong Michael Lynch, who predicted back in 1996 “real oil prices FLAT for the next two decades”: I’ll take your bet on $30 oil.

  1. ecostew says:


    I don’t remember a post on this report:

    There is reference to a study indicating it will cost government $16.6 billion.


  2. TaylorS says:

    I’ll also take the bet on $30 oil, Lynch is on the wrong side of history here. People can talk about Peak Oil all they want – the problem is that Americans are not talking about rising global oil demand. China and India will increase their oil demand respectively by 7.5% and 5.5% annually while other countries, including America, continue to increase. OPEC will have to produce more oil from new fields yet to be developed. In a October 2008 report, the IEA stated global oil consumption will increase by 60% by 2030 and it will cost ~ $350 Billion PER YEAR of new project investments to produce enough oil to appease the growing demand. What Americans don’t realize is that OPEC spent $390 Billion over the last 8 years COMBINED in new project investment. Do the math – we’ve got big problems coming folks and to quote Joe – “WAKE UP”

  3. Davis Tucker says:

    Well said. I would also point folks over to The Oil Drum’s rebuttal thread as well, which lays out a few other points and points to other posts with more empirical evidence to take down this charlatan.

    Here’s the link:

  4. Ben says:

    The real problem with Lynch’s argument is that when we hit peak oil is not the key issue. He may have a point that technology and tar sands and oil shale will allow production to keep up with demand for longer than some predict, but there are far more important reasons to limit our consumption of oil that just that there is a coming peak. First and foremost that continued burning of oil is destroying the planet as we know it. All the new technology only worsens that, by increasing the carbon output of extracting/producing oil. Second, we still buy most of our oil from places that we’d rather not be sending all our money. New discoveries in West Africa are not likely to improve this situation much.
    Peak oil seems like a convenient distraction, whether it is here, past, or many years down the line, there are more than enough reasons to try to reduce our consumption of oil and invest in efficiency and clean renewable energy alternatives.

  5. ecostew says:

    Oil shale should be left in the ground: EROEI is low, GHG emissions high, requires significant scare water to process, and will cause significant environmental impact to extract/process.

  6. Bill R says:

    One scenario where Oil could be 40$ or less for quite awhile… massive demand destruction following a financial collapse resulting from commercial real estate loans collapsing, runs on the bank, and the chinese refusing to buy our bonds any more.

    Its not beyond possiblility either that China’s bubble could burst as well… their economy is married to an extent to our consumption and they have a host of environmental/political issues that could deflate their economy.

    Its the only likely scenario in which you would owe Mr. Lynch money… if demand holds near where it is, most of the newly developed oil will be deepwater or oil sands which is expensive oil.

  7. Jeff Huggins says:

    The Dumbest Smart Species?

    You know, at some point soon we (humans) should look in the mirror and ask ourselves the question: Do we want to be intelligent, or do we want to knowingly make choices that qualify us as the Dumbest Smart Species that ever lived?

    I agree with those who point out that we should see the “big picture” here.

    Whether oil starts running out in “X” years or whether we can squeeze every last drop out of deep Earth and every rock for “50X” years shouldn’t matter much. Burning it messes up our climate, folks. And it’s limited, whether in X years or 50X years. And, in the meantime, the large majority of it is overseas. The longer we stick with it, the more money we pour into those regions, and usually not to the general public in those regions, but (instead) to a small number of private individuals, huge corporations, and governments that (who knows?) may or may not be democratic.

    I was a chemical engineer. I’ve worked for Chevron before. I’ve felt the “excitement” and (to use a movie term) “mojo” that come from standing on a tower in a big refinery, or in the middle of an oil field, or watching the huge tankers dock.

    But, burning the stuff is not good for us! Are we willing to let that information enter our often-thick skulls?

    There is an important moral issue here too, among many: If Person A gives a gift to Person B, or treats Person B with respect, and does so voluntarily — because he wants to benefit Person B or at least be “just” towards Person B — that’s good. Give Person A credit.

    In contrast, if Person A gives a gift to Person B, or treats Person B with respect, solely or mainly because he (Person A) has little other choice and sees the whole thing as a matter of his own necessity, then that’s not nearly as good — and Person A should get little, if any, credit.

    IF we shift to renewable clean energy sources because we don’t want to mess up the climate for future generations, that is good and responsible and noteworthy. IF we make that choice. Bravo to us!

    But, IF we slowly and grudgingly shift from oil to other energy sources because we’re forced to do so, mainly because of “peak oil”, that’s “not so good of us”, to put it mildly.

    We really do have to ask: Do we want to be an intelligent and ethical species, or do we want to be a dumb, selfish, and un-ethical one? We have the ability to be the former, but we haven’t made that decision yet.



  8. Common Sense says:

    Can’t wait for oil prices to go up. I have a couple thousand shares in USO, DBO, OIH, and CVX.

    It’s not too late; those of you who think oil prices will go up can join me.

  9. Greenish says:


    A commenter at the Oil Drum thread mentioned above raised the point that the motivation for printing these lies may be more sinister than the lying itself. What do you think of the following? If it has some truth to it, how do we head this off?

    “…My suspicions are that the Obama administration was so backed into a corner that they had to cut a backroom deal with some oil state Blue Dogs in order to get their support for the health plan. The deal is that the green energy initiatives get ‘postponed indefinitely’ (i.e., for the remainder of Obama’s term of office), with the public explanation being that the brakes need to be applied to the spending. The real back room explanation is that that is the price paid for the votes. Part of the deal was probably to delay the announcement of this for a while, in order to start in to play the machinations with the media that would lay the groundwork and condition public opinion to accept this policy change without too much opposition. Thus the appearance of Lynch’s piece at this time. Look for others like it, in other venues (e.g., Samuelson’s hit piece on passenger rail in yesterday’s WaPo).

    This is a testable hypothesis. If this initial salvo becomes a flood tide in the media of things like this, followed by a public announcement that ‘we just can’t afford to move forward with green energy right now’, then that will be confirmation.”

    [JR: Not possible. First off, NYT op-ed page is, for better or worse, run by the NYT. My father was in the newspaper business all his life. Such decisions are 100% hands off.

    Second, your theory is 100% backwards. The health care bill busts the budget by $1 trillion, whereas the climate bill pays for itself. That’s a point I have blogged on earlier.

    Third, I can’t speak for the White House political operatives and economics/health team, but Obama would never make such a trade. I’m pretty sure he understands global warming and that his presidency will be judged a failure if the climate bill goes down.]

  10. Lou Grinzo says:


    I know you asked JR directly, but please let me toss in my 2 cents.

    I would put zero credence in any such explanation until there is evidence. Not someone’s suspicion or a sequence of events that happens not to be inconsistent with the theory, but real, honest-to-Pete evidence.

    A flood of such opinions could much more simply be explained as nothing more than the fossil fuel interests fighting like cornered rats (my apologies to any rats in the reading audience), with no political shenanigans involved.

  11. Rockfish says:

    There doesn’t have to be a White House conspiracy theory. There will be no climate bill (of any substance, anyway) with the GOP in full control of the message.

    The really clever scheme would be if Obama had convinced the Blue Dogs that he was trading this bill for their votes, knowing full well the bill isn’t going to pass anyway.

    Don’t get me wrong, I read this blog because I’m as convinced as anyone that we NEED to do something, but I am resigned to the fact that it won’t happen.

    [JR: It might not happen, but I’d say it’s better than 50-50 it does. Don’t be resigned yet!]

  12. Patricia says:

    Well, just weeks after destroying T. Boone Pickens’ credibility, the good folks in the Man-Bunny Matrix have done a number on Michael Lynch.

    These muck-raking rabbits always make me realize how little I actually know.

  13. Apparently we now live in an era where repeatedly screwing up in public and being wrong about everything you say bears no penalty of credibility with the mainstream media.

  14. RoySV says:

    Side comment for two cents: I hope we can all stop using MSM referring the various mouth-pieces for the status quo. How about “traditional media” or “establishment media”. After all these mega corporate beasts may quite soon not be so “main” at all.

  15. Omega Centuri says:

    There is no substance on earth (or in this universe) which is infinite in quantity-and that an exponential increase in consumption will not rapidly use up. Excepting unfortunately human stupidity, I’ve become convinced that that is the one limitless resource. With the nearly continuous disinformation from the establishment media stupidity is growing exponentially.

  16. Rockfish says:

    I really do love your enthusiasm. Thanks.
    It remains to be seen if Obama goes to the mat for health care. He hasn’t yet, for sure, but if he does I suspect he’ll happily abandon the climate bill to get it.
    Health care is an every day, every dollar issue for every voter. Climate change just isn’t. With $10 gas, failed crops, starvation, flooding, Houston under water (and N’Orleans under water a few more time), etc it would be. But that’s not going to happen soon enough to make every voter a sobbing, panicked mess. And politicians will go with the voter every time.

  17. pete best says:

    Ah Peak Oil again only when will we know. Who does the USA listen to, the IEA or the EIA, the latter I am sure. The same EIA who use the USGS to demonstrate that if we massively inflate untapped reserves in the USA then oil companies will go on drilling and prospecting and finding that oil that the USA needs to continue driving 2 tonnes vehicles doing 10 MPG.

    Every country in this world has something to lose from peak oil but the western countries of the USA/EU and Autralia the most. From food production which is wastefully reliant on oil to freight that gors by road and not much any other way etc and because everyone likes the suburbs especially in the USA where driving 20 miles to a supermarket is probably quite common.

    The USA consumes 20 Mb/d and if you convert that it into its energy value than you can only say that the USA throws it away. Even the cash for clunkers programme which has been touted as hand in your gaz guzzling ford for a toyota has not only run out of money but is not a oil changer. If every swithes to hybrids then within 10 years at 2% growth per year all that is undone.

  18. van says:

    So people here really think that the oil companies would be fighting climate change legislation if they thought they were going to run out of oil? I suspect they think there’s is plenty of oil for decades to come,otherwise they’d be putting all their bucks into solar energy. First of all a disclaimer, Mike Lynch is my brother. That being said, I don’t agree with him on a lot of things, but I know he truly believes in his positions. As for the peak oil theorists they’ve been wrong plenty of times as he points out in his editorial. I remember after Katrina reading posts at “the oil drum” saying the price of gas was going to just keep going higher and higher and that the end of civilization was upon us. I say stick to climate science. It’s alarming enough as it is. If the peak oil argument turns out to be wrong, you just lose credibility. There’s an element to the peak oil argument that’s a lot like the Y2K( remember that) crowd.

    [JR: I’m not making an “argument,” I’m presenting analysis. The difference on peak oil now vs. earlier is that now credible, detailed analysis by IEA and others make clear it is happening. It’s happening whether or not we talk about it.

    Ask your brother if he’ll take my bet!]

  19. van says:

    By the way, I’m in favor of bold change to stop global warming.

  20. K. Nockels says:

    Hey Van, When you start, as we all did, with a finite amount of product of any kind and you can only search and extract that product not produce it, and the amount of people using it is increasing as is the amount each person is using. YOU will hit the finite limit and run out.
    Nothing on this earth is limitless as we are quickly learning to our great shagrine. So why anyone would believe oil couldn’t or isn’t going to peak and then run out is truly beyond me.

  21. Steven Kopits says:

    I have to admit to finding the timing of Mike Lynch’s article in the NYT peculiar. Peak oil really wasn’t on the agenda anywhere (except an upcoming article of mine!).

    However, what’s interesting is the degree to which a consensus has emerged in much of the oil patch. It’s hard to find an oil analyst at the major banks that particularly cheery about the oil outlook, and a few who are downright grim.

    It’s also interesting to see the feedback in Houston. I have a chance to speak to a number of folks in strategy and marketing in oil field services companies in Houston–the guys who have to find and produce the oil in the real world–and I find widescale acceptance of peak oil there. It may be caveated as ‘practical peak oil’ or ‘affordable peak oil’, but whereas I still write ‘peak oil’ with quotes in New York, in Houston you can write in as peak oil, without adornment.

  22. van says:

    K.Nockels, I agree with you that the amount of oil on the earth is limited and if we keep using it we may eventually run out. But it’s a big difference to say we’ve already reached peak oil when we might not reach it for 100yrs. If you go around crying wolf, but there’s no wolf. My brother may be wrong about this, I don’t know. He is pretty smart and I don’t think he’s pulling his belief out of thin air. There was just a post on this site a few days ago about the massive new reserves of natural gas available due to new technology, but when Mike says that newer technologies will make more oil available peak oil people say that can’t be. My question is what is the science on this? On global warming there is scientific consensus(pretty much). Is there on peak oil? Should we really be tying the global warming debate to peak oil? There seems to be a bit of a fringe element to the peak oil believers. I personally think the climate crisis is the most important issue humanity has ever faced. I favor a WW2 style all out effort to build solar and wind power. I come to this site for the excellent posts on climate change issues. Just not sure Joe should be jumping on the peak oil bandwagon.

  23. Mike#22 says:

    “The trouble is, of course, that it was Lynch that aimed wildly off course here, and it is his nemesis Campbell that appears to have hit the bullseye.”

  24. van says:

    Joe, I’ll forward him the link to this post, if he wants he can take your bet.

  25. van says:

    Mike#22: From the first comment in the oil drum post you link to.

    think it is important to make sure we are comparing apples to apples in the forecasts. From previous reads of Lynch’s comments in the press it seemed to me he was refering to total liquids including spare capacity and not just actual production (I may be wrong so please correct if so). The market collapse and attendant collapse in demand of course had it’s predictable impact and spare capacity has indeed increased. Of course when you talk about supply it is hard to take long term demand out of the equation as certainly back when there was lots to find demand drove how quickly supply could come on. Campbell and others were definitely referring to how much could ultimately be supplied and hence would have to include spare capcity in the equation. We will of course circle back to the question of what is current spare capacity and whether it is believable until you see it but hence the problem in this sort of “he’s right and he’s wrong” analysis. Certainly Lynch is crazed if he thinks it is a limitless resource but he does make some good points about reserve growth. Reserve numbers are tricky beasts and trying to interpret what is reported versus what it’s category should be is a bit of a mugs game, fraught with potential large error. That being said reserves can’t grow indefintely and Campbell tried to take account of the growth phenomena by backdating, which of course also requires some assumptions. Campbell and others who have said we are already peaked make excellent points as we all know but they are also incorrect in assuming that economics, technology, markets etc don’t come into play in some manner. A clear example of that is the affect shale gas has had on the dynamics of the natural gas industry in North America. Over the years I’ve come to see this as a pretty complex system that goes beyond the notion of a simple two dimensional view of Resource versus Production.
    Perhaps it is simpler to say that everyone has been wrong most of the time, some have been right occassionally almost certainly a result of luck (which is required in a complex system I think). What is important, I believe, is understanding the dynamics that influence available hydrocarbons and demand at any given time and how potential future impacts on economics/people dynamics etc will be influenced.
    Just my tupence worth.

  26. van says:

    I followed some of the links in Joe’s post here and read them. It’s obvious there is a lot of disagreement from the experts. Some people say we have reached peak oil. Some say we have 10 years. Others say 100 yrs. Half of oil and gas cfo’s think we are peaking, but half don’t. This is my point. When I read these analyses, my eyes glaze over. It’s very technical and I don’t really understand it. The scientific consensus on global warming is that it’s real. Glaciers are melting, polar ice is thinning, the evidence is all around us. Do you really want to muddy the waters with cries about peak oil, which may or may not be happening. We need to take action on reducing carbon emissions now. My fear is that catastrophic climate change will make peak oil a moot point.

  27. Michael Lynch says:

    Hi, this is Darth Vader himself. Is this page put up by Joe Romm? It’s not absolutely clear.

    Please note I’ve been overwhelmed with emails, and cannot respond immediately, but will when I get the chance.

    [JR: Hi, Darth. Is it really you? It is really me.

    I’ve got my name, “Joe” on this post (and 90% of the other posts) and the “About” section identifies Joseph Romm as the editor. And the post itself identifies the author as “I was Acting Principal Deputy Assistant Secretary, at DOE’s Office of Energy Efficiency and Renewable Energy” — the guy you testified in rebuttal so many years ago. So I apologize if that wasn’t absolutely clear :)

    I look forward to a longer comment and your accepting my bet.]

  28. Mike#22 says:

    “It’s obvious there is a lot of disagreement from the experts.”?

    In projecting future oil production, there are two issues. Producible reserves at existing fields, and new fields which are coming into production.

    Regarding exisitng fields, there is wide agreement that the OPEC reserves data is highly inflated. This is why BP, in it’s annual Statistical Review of World Energy puts this disclaimer right at the bottom of the page showing reserves: “The estimates in this table have been compiled using a combination of primary official sources, third-party data from the OPEC Secretariat, World Oil, Oil & Gas Journal and an independent estimate of Russian reserves based on information…”

    The reason OPEC’s reserves are inflated are explained by Campbell and Laherrere in this 1998 SciAm article.

    As for new fields, Megaprojects, coming into production, they are being tracked here

    If one has the time and the interest, one could gain a good understanding of global oil production by spending a few hundred hours reading the posts at the Oil Drum on peak oil, and following up the references provided. Start here with “Peak Oil Overview, July 2009”

    Last year world oil demand exceeded available production, and the normal supply and demand picture went out the window. Instead of supply ramping up to meet demand, supply was flat, and prices went into a super spike. I have (without any hard evidence) connected this event with the financial melt down. For example, I reason that at the periphery of our housing industry, growth was based on a lot of ducks staying in a row. Demand for new homes 40 miles out in the desert, cheap gas to get the contractors and materials out there, cheap fuel to run the construction equipment, cheap fuel to get the new owners out there and back every day, cheap fuel to get employees out to the service jobs in the supermarkets and box stores. Out at this margin, profitability died of a thousand cuts as fuel prices rose and rose, and the first wave of bad paper starts showing up on Wall Street. This same scenario could have played out in pockets all through our economy–anywhere cheap fuel and efficient supply lines made the absurd profitable. Housing developments in the desert? Absurd.

    Watching the world economy pick itself back up and start running at the oil production wall again is slightly scary.

  29. coyote says:

    I am curious why Mr. Romm even bothers to support cap and trade if he honestly believes oil prices are going up by $140 or more. The CBO estimates the clearing price for a ton of Co2 emissions under the current bill will be between $20-$30 a ton. Since a barrel of oil creates about a third of a ton of CO2 emissions, this implies the cap and trade bill might increase the price of oil by $7-$10 per barrel. But if Romm think oil is going up by natural market forces by $140+, why even bother? Why not just put a tax on coal and be done with it?

  30. coyote says:

    There are many negative feedback loops that tend to act as a check on oil prices — rising prices promote substitutes, new exploration, new production technologies, conservation, etc. It is funny to me that Romm gives little credence to these negative feedbacks while instead suggesting a runaway model for prices. Funny, because these are the exact same issues (positive vs. negative feedbacks in the system) that likely separate Romm’s view of future global warming from those of skeptics. It is assumptions about feedback in the climate that separate catastrophe from slow nuisance warming. I wonder if certain people are wired to see catastrophe in every system?

    [JR: The climate feedbacks are all scientific fact. They are in the paleoclimate record and we are seeing that now.

    As I have explained — and will have to explain again I guess — as the famous Hirsch analysis for DOE shows, the substitutes for oil today require at least one decade and probably two decades to massively deploy (given how long cars and other infrastructure last). If you don’t act 20 years before the peak, you are screwed.

    Put another way, the supposedly negative feedback loops on oil prices in fact drove us off of oil in all of the easily substituted areas, like power. Now the majority of our oil use is in the transportation sector, where we have been stuck on oil-based fuels for about a century.

    I wonder if certain people are wired to assume the future will be like the past and that problems will solve themselves. That strategy usually works, but when it fails, it fails big-time.]

  31. coyote says:

    I realize I did not comment on the bet per se. Here are two reasons I don’t like the bet:


    [JR: You missed the point of the bet entirely — I’m calling out Lynch. If you want to misrepresent what I wrote and why — do it somewhere else.]

  32. Scott Mollett says:

    I have been re-reading Atlas Shrugged. Ellis Wyatt the oil man from the story is all set to use the very shale oil Lynch mentions. I believe Atlas Shrugged was written in 1957. EROEI limits will probably never allow shale oil to be viable for mass consumption. How long is this pipe dream going to be touted?

    Lynch either does not understand what peak oil is or he is a liar. I believe it is the latter. I’m all for a constitutional ammendment allowing prosecution for liars in the media. Lynch and the owners of the NYT’s belongs in jail for their lies and the damage they will cause. The 1st amendment should not be a license to lie when it comes to the media.

  33. Dag Johansen says:

    Any response from Lynch? I find this interesting like the famous Simon-Ehrlich wager.

  34. Michael Lynch says:

    Yes, it’s really me, Joe. I was asked to testify on the DOE forecast, and when I arrived, found out it was a hearing in response to your article and the question of renewable energy research, which I don’t (and didn’t) oppose. But, it being an election year, the Representatives all made the point that they weren’t going to cut funding for anything because it meant jobs in their districts and in my concluding remark I said the biggest problem was politicians steering money to research primarily for political credit. People laughed and I was never invited back.

    [JR: I am aware that you probably didn’t know what you were getting in to. I also meant to mention in my post that they were silly to invite you as a witness because, as you said, someone from M.I.T. was not going to show up and testify that investment in R&D was a bad idea.

    The main point of that hearing, aside from what I wrote in the post, was to try to show that DOE (i.e. me, although I hardly represented all of DOE) had a different forecast in oil from EIA (which is nominally a part of DOE, though independent).

    As the transcript reveals, the hearing was a hopeless failure for the Republicans from every perspective.

    Still hoping you’ll take my bet.]

  35. estetik says:

    waiting for the oil prices to go up may take much time

  36. Z. says:

    That’s not a very sporting challenge. Only someone with no comprehension of statistics would take that bet.

    With oil around $65-70, offering a bet on an average starting in a few months with an over-under of $40 is simply not a fair bet. And while you feign being sporting by offering “2-to-1”, that is also heavily skewed in your favor as your downside has a limit of $8,000, while your upside is unlimited.

    A fair bet would be more along the lines of you offering $100 for every dollar oil is below $60, and taking $100 for every dollar oil is above $90, up to a certain maximum. (In fact, that bet would be so fair, I don’t know what side I would take)

    And if you seek to argue that your over-under of $40 is justified because Lynch said $30, you must have missed how much he hedged in that one sentence you cited, saying “the price will LIKELY come down CLOSER to the historical level of $30 a barrel as new supplies come forward” (emphasis mine). In fact if the price comes down to $65, you could say he was right (it is “closer” to $30).

    In the spirit of your offer, I’d like to offer you a bet of my own. Since, citing the IAEA, you say that “for oil to stay significantly below $200 a barrel… by 2020 would take a miracle — or rather 6 miracles”, and most people could agree that miracles are at least a 1-to-100 longshot, I would like to bet you $100 at 10,000-to-1 odds that oil will be below $200 in 2020 (i.e., if oil’s below $200 you give me $1,000,000, if it’s above I give you $100). That should be a no-brainer since I’m spotting you 4 miracles (the odds for six miracles should be 1,000,000,000,000-to-one). By the way, I actually think it will be above $200, but I’d certainly take those odds.

    [JR: That’s a funny bet coming from Lynch. But if you’re not Lynch, I don’t have much interest in your bet, whoever you are. Now if you had a blog with an Alexa rank below 70,000….

    Also, your own fourth paragraph eviscerates your entire argument. And if you actually think it will be above $200, you’ll get plenty rich in the stock and futures markets.]

  37. Z. says:

    Man, you must be paranoid to think I’m Lynch. I am not, and have never met him, I don’t think I’d heard of him until his article. Lynch certainly would have had a more public response, and I’ve got to assume he would have done so less than a week after your post.

    [JR: I was kidding. Lynch already posted here.]

    I’m just a disinterested observer drawn here by Paul Kedrosky’s link (email me at the attached address if you still doubt my identity). I don’t even really have a strong opinion on peak oil or the price of oil. I am just bothered by sophistic arguments along the lines of “if you don’t accept my skewed bet you are a coward who knows he’s wrong”.

    [JR: The sophists were victims of bad PR, as you may know. In any case, this particular bet is 1) not sophistic and 2) not framed as in your reductio ad absurdum. I’m bothered by people who can’t tell the difference. Lynch has been wrong a LONG time. Such folks should be held accountable for their mistakes, and one way is to challenge them to make bets to see whether they believe what they say or are just BS-ing.]

  38. Ellen Kramer says:

    My husband recently covered the controversy surrounding Michael Lynch on his website and also issued a challenge of his own that I think you might be interested in looking at. His website is Please feel free to leave him comments on his site or reply to me directly. Thanks.

  39. Michael Lynch says:

    Joe, I have posted a long response with a counteroffer on
    Mike Lynch

    [JR: I can’t send people to that disinforming site, sorry. Post the bet here. I’m open to it. Whose price are we using?]

  40. ” Man, you must be paranoid to think I’m Lynch. I am not, and have never met him, I don’t think I’d heard of him until his article. Lynch certainly would have had a more public response, and I’ve got to assume he would have done so less than a week after your post. ”

    i thinks so..:)))