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Okay, Michael Lynch, I’ll take your wager on $65 Oil

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"Okay, Michael Lynch, I’ll take your wager on $65 Oil"

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Energy consultant Michael Lynch and I do not agree on oil, especially peak oil (see 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).  So I offered him a wager:

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.

He didn’t like my terms and counter-offered (here) “say $65? per barrel adjusted for inflation.”  I don’t actually read that website, since it’s run by the anti-science disinformers, and he didn’t post the terms in the comments here, which is the main reason I’ve been slow to reply but in any case, the bet is one no believer in peak oil could refuse, and I did want to accept it before the year ended.

It isn’t entirely clear from his post whether he is taking the other terms of my wager or offering a straight bet on the average price, which would also be fine by me.  So we’ll have to work that out along with which oil price we’re going to use.

I do take Lynch’s point that the oil price is not definitive proof one way or another of the peak oil theory:

Realizing that you are not an economist, it nonetheless should be obvious that price levels are not proof of peak oil, as they have fluctuated quite a bit historically and long before peak oil ever occurred (even assuming it has now). A wager on price is, first and foremost, a wager on the perceptions of many industry players on the value of oil, not on the value of oil. (This was something Keynes discovered, to his regret, after losing money on his investments.) Many of those investing in oil and related instruments are not particularly cognizant, and even if they were, they correctly realize that money can be made by wagering on the misperceptions of others. I would recommend the excellent book, Devil Take the Hindmost, for a discussion of profiting from bubbles and how momentum trading can take prices far beyond what the fundamentals of the industry imply are valid.

We could, for instance, have a global depression — or a major terrorist attack on the Persian Gulf.  But I will say that if there is no recession from 2010 to 2015, and oil prices still average below $65 a barrel, that would effectively disprove the notion that oil has peaked during the time span of the wager or has already peaked.

Yes, I’m sure many readers would love me to take some of this bet.  Not gonna happen:

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31 Responses to Okay, Michael Lynch, I’ll take your wager on $65 Oil

  1. Arthur Smith says:

    Actually if you read Deffeyes’ book “Beyond Oil: The View from Hubbert’s Peak”, peaking in a resource is characterized more by very large price volatility, rather than a consistently high price. The reason being that the periods of high price encourage substitution or more efficient use (as we have seen already); demand drops, then the resulting lower prices cause substitution to slack off, demand rises again, etc. I don’t think price is actually a very good signal of the peak – total demand volume is probably more important.

  2. charlie says:

    which is why we should be ensuring a steady price for gasoline. I’m not sure where to draw the line. $3/G feels great at the pump but the number of cars on the road is increasing. $6/G would ensure a lot of changes in both driving and get a lot of substitute fuels on the road. I’m quite convinced that $4 gas pushed the US into a recession in 2008.

  3. mike roddy says:

    Peak oil does appear to be upon us, probably including OPEC if the reserves reports were changed to reflect what’s in the ground.

    I’m interested in how quickly the market for heavy oil will expand if oil prices go up and stay there. There will be a lot of pressure to greatly increase production in not only the tar sands, but shale deposits in the US and, especially, heavy oil in Venezuela. When I was in Caracas a few years ago they told me that there are over 200 bb of heavy oil in the Orinoco region, and it won’t require much of a price increase to make it feasible. It’s easier to get to than the tar sands, because the deposits are more dense. Chavez isn’t going to care at all about the heavy CO2 emissions and pollution, and the same is likely to be said about the Canadians.

    Massive development of either would be an environmental holocaust. The Orinoco region is one of the most verdant and spectacular areas on the planet, as is the Canadian wilderness. If the oil is boycotted, someone else will buy it.

    If this is a little too OT for you or someone else to answer these concerns, I hope you address it in a future topic, and soon. We are not going to be able to stop heavy oil development after these regions crank up funding and pay off politicians.

  4. Jeff Wishart says:

    Mike,

    While it’s true that oil companies in the tar sands region (almost entirely Alberta) of Canada have been exploiting this resource with the help of all three levels of government, it’s false to lump all Canadians in with Chavez as not caring “at all about the heavy CO2 emissions and pollution.”

    We have (lamentably) our share of deniers, but also a large proportion of enlightened citizens: the Pembina Institute conducted a poll in 2008 and found that “83% of Canadians surveyed agreed with the statement that ‘Canada should commit to strong action on global warming without waiting for other countries.’” While I think that’s probably a bit high (and without a discussion of costs, the pollsters may have rigged the poll a bit), it still shows that we aren’t complete Luddites up here.

  5. Chris says:

    Let’s not forget that the true cost of gasoline is much higher. When you factor in the subsidies (not paying their fair share of corporate taxes) and the cost of securing oil from volatile places (the military) and when you add in the cost of cleaning the environment (unknown) the true cost is 3 to unknown, maybe 10, times higher. And your government is going into massive debt to do so; you’re not even paying for the true cost today but leaving the true cost of gasoline to your Grandchildren.

    This Canadian is truly worried about the Alberta tar sands; and many others are too. I think Mike R (previous post) meant to say that Chavez in Venezuela and Harper in Canada don’t care about heavy emissions. We Canadian citizens, because of the tar sands, are turning into a Petro-state; crude alone determines most policy – including environmental policy.

  6. David says:

    Good time for everybody to review their predictions about when oil will it $100 a barrel. So far the following people were wrong: Brewster, Romm for Cabinet, Tyler, Harry Applin, hapa, Russ, Jim Eaton, paulm, Philip L, Linda S, Wonhyo, Craig, TomG, JCH, Anthony, Barry, Koen, and Matt.

  7. Wit's End says:

    Perhaps I’m slow to the table, but I’ve been reading life after the oil crash dot (thanks to a CP commenter for that link) net all morning in a state of mounting near-paralysis of fear, having come to the conclusion that with the concurrent collapses – environmental (and that includes sources of food), financial, and energy – we will imminently experience the full force of what I now call The Trifucta.

  8. Lamont says:

    We’ve probably already seen what is going to happen.

    Oil will swing betweeen $150/bbl and something like $40/bbl (inflation adjusted), with the upper limit triggering recessions, and the lower limit due to reduction in demand at the bottom of recessions. That pattern will reoccur until there’s a significant acceleration in adoption of alternative energies.

  9. T Lehman says:

    The expression “peak oil” is an eroneous expression.

    The expression “peak oil production” is less vague.

    The expression “peak in Oil reserves” is also less vague.

    We have’nt gotten actual reserve reports from many Persian gulf states for many decades. 2009, the planet had a net increase in proven reserves. some major exploration finds. I recall dates from the 30′s declaring how many years till we run out and they are always advanced.
    south Africa makes oil out of coal. Russian petroleum geologists say more oil is being created.

  10. T Lehman says:

    Points for Charlie. $4 dollar gas ( crude over $100) did great damage for the American economy last year. It resulted in a negative balance of trade of 1 trillion dollars. Money that did not go into house payments and other purchases. Secondly damage in the shorts in stocks and commodities and hedgefunds, lost hundreds of billions on commodities going down. Drop in commodities actually did damage to financial instutitutions because of mark to market rules also.

  11. Leland Palmer says:

    Hi Joe-

    It’s a shame that much of the information about the reality or not of peak oil is in private oil corporation hands, I think. I believe that the DOE essentially takes the oil companies’ word on it, and that significant distortions in projected oil supplies have occurred in the past, with those distortions often apparently serving oil corporation political interests.

    Absent climate change, we could shift to heavy oils, tar sands and oil shale and still provide petroleum, I think, in a very carbon intensive way, even if secondary production, sensing and drilling technology do not keep up with demand.

    The Council on Foreign Relations’ Scott Borgerson apparently looks forward to a melting Arctic, opening up an estimated 22 percent of the remaining undiscovered oil and gas on earth to exploration.

    http://www.cfr.org/publication/19313/prepared_remarks.html?breadcrumb=%2Fregion%2Frecent

    2) This dramatic and unprecedented climatic change is affecting the geopolitics of the region. The Arctic is home to an estimated twenty-two percent of the world’s remaining undiscovered hydrocarbon reserves as well as access to the fabled shipping routes over Eurasia and North America, both of which have led to balance-of-power struggles in the region. The next few years will be critical in determining whether the Arctic’s long-term future will be one of international harmony and the rule of law, or of a Hobbesian free-for-all with dangerous potential for conflict.

    This, what happens to the Arctic, will in fact affect the onset of peak oil.

    Borgerson is a David Rockefeller visiting fellow at the CFR, and the Rockefeller family has dominated the CFR for decades. The Rockefeller family also has an unknown but apparently large degree of control over ExxonMobil, having sent Lee Raymond back to Texas with a 450 million dollar golden parachute in 2006, according to the New York Times, supposedly for insulting the Rockefeller family and supporting the ExxonMobil paid climate denier network.

    So, if we take the Borgerson’s CFR output and testimony before Congress to be the foreign policy voice of big oil in this case, it looks to me like ExxonMobil wants the Arctic to melt, so that they can drill for oil under the existing polar icecap.

    In the absence of climate change, we could likely use the heavy oils, secondary recovery, and better exploration techniques to continue to supply oil to the world economy.

    During the Clinton administration, in fact, which had essentially no energy policy and let the market dictate oil prices, we had the cheapest oil products in real dollars in decades.

    It was only during the Bush administration, which arguably invaded Iraq to control and restrict the flow of oil out of Iraq, and during the speculative bubble supported by Goldman Sachs, among other commodities speculators, that we had four dollar per gallon gasoline. A barrel of oil back during the bubble was supposedly traded an average of twenty seven times before it got to the consumers. This excess speculation effectively decoupled price from supply and demand, and let to the highest oil company profits in decades.

    So I don’t know about peak oil, and I don’t know when the real peak of oil production will be. Until we get the speculation and the manipulation out of the system, we won’t know what the true situation is.

    I only know that in the absence of offsetting CCS (Carbon Capture and Storage) or BECCS (Bio-energy with Carbon Capture and Storage), no matter how much oil there might be, we can’t burn it.

  12. Ric Merritt says:

    I guess it’s a little late for this suggestion, but if people want to disagree about whether we are more or less at the oil production peak (my amateur opinion is that we are), it would make much more sense to bet on oil production. The figures are public from the EIA (not to be confused with the IEA!), and I don’t think there’s a lot of dispute over their accuracy (within a reasonable +/-).

    If production continues to rise (hasn’t happened to speak of since 2005), the cornucopians win. If production stagnates or falls, the peakers win, even if this causes economic pain and therefore lower prices. No fair pointing out that “sure we aren’t pumping it, cuz demand is lower, cuz lookit this depression!”, as this is eminently consistent with peak oil, even expected by many. The onus is on the cornucopians to deliver. They are the ones who are predicting rising production for decades to come, up to maybe 50% above current levels.

  13. Peter Wood says:

    The futures market is currently predicting oil prices between US$78 and US$94 during 2010-15.

  14. David B. Benson says:

    I’ve seen a prediction of a plateau in pumping lasting for a few decades.

    Dunno.

  15. T Lehman says:

    Reporting from Sacramento – Facing a budget deficit of more than $20 billion, Gov. Arnold Schwarzenegger is expected to call for deep reductions in already suffering local mass transit programs, renew his push to expand oil drilling off the Santa Barbara coast and appeal to Washington for billions of dollars in federal help, according to state officials and lobbyists familiar with the plan.

    LAtimes

    Use local oil and hire local workers Arnold.

  16. From Peru says:

    Really I am amazed by the HIPOCRISY of the Hugo Chavez government. He call himself a “revolutionary, anti-imperialist socialist” but actually his government depends on the Oil exports to the US.

    In Copenhaguen he argued strongly against Imperialism and Capitalism, but his regime is completely US-dependent, as it is ALMOST COMPLETELY FUNDED BY THE USA, specifically by the USA’S Oil dependence.
    He expressed its concern about the total destruction of life on Earth, but His government has plans to completely wipe out the Venezuelan Plains and Rainforest to obtain the Heavy Oil.

    He is a shame to everyone that considers itself socialist, as I am. His “Socialism of the XXI century” is a total fraud,and it should be obvious for the reasons pointed in the lines above.

    He is the Rockefeller of Latin America, no matter how much “red” are his shirts or how much he cites Karl Marx. Yet he has bought(with USA MONEY, obtained selling his oil)nearly all Left Paties in Latin America:

    -The Bolivian “Movement to Socialism” of Evo Morales.

    -The “socialist” government of Rafael Correa in Ecuador.

    -The left parties in Peru, such as the Nationalist Party of Peru and bunch of Communist Party of Peru(PCP) splits, such as:
    a) the mainsteam PCP,that dominates the CGTP, the Peruvian main Labor Union.
    b)the Maoist PCP-Red Flag with dominates the SUTEP, the Teacher’s Labor Union
    ————————————————————————
    NOTE: Don’t confuse “PCP-Red Flag” with with the also Maoist “PCP-Sendero Luminoso” (PCP-SL) or “Shining Path” , that initiated a so-called “People’s War” in 1980 that triggered a near-civil war between them and the Peruvian Army that killed more than 70 000 people, mainly poor Andine peasants, until their leaders were captured in 1992 and sentenced to pass all their lifes in prison. They then surrended and their guerrillas demovilized.

    The internal conflict left the Peruvian population traumatized , and armed splits from the mainstream PCP-SL still plague High Rainforest areas and are funded with money from Cocaine Black Market.
    Ironically Cocaine production needs Kerosene, an Oil derivative, to concentrate the drug. So the Drug Mafia that funds the insurgent guerrillas in Colombia and Peru is also dependant on Oil (think of this supreme irony: the “Anti-imperialist-Communist guerrilla” insurgency is funded by the Oil-dependent Capitalist Economy)
    ————————————————————————
    -Left governments in Argentina and Nicaragua that had a long history of struggles for the rights of poor people are also inside Venezuelan influence.
    -Cuba had substituted the USSR assistance with the Venezuelan aid funded with the Oil exports (think: the “Cuban Revolution” funded with US money…)

    The power of Big Money (here in the formed of the so-called “Petro-Dollars” as Peruvians call the Venezuelan money) is astounding!

    The “Socialism of XXI century” completely bought by the Big Oil …
    … this is the maximal Tragi-comedy of Latin-American Potitics!

    True Left fighters such as Victor Raul Haya the la Torre (the founder of the “American People’s Revolutionary Alliance”, or APRA. The APRA won the last elections, and since they got power are completely dominated by the Big Money in the free-trade variety (as opposed to the State-dominate Venezuelan Big Oil) and forgotten their electoral promises) …
    and Jose Carlos Mariátegui (founder of the Peruvian Socialist Party-PSP, that then was renamed Peruvian Communist Party-PCP) …

    are surely TURNING OVER THEIR GRAVES after seeing all this political aberrations.

  17. joe1347 says:

    What do you think the chances are that the Democrats will raise the tax on Gas to help reduce demand and improve efficiency. Is less than Zero (percent chance) a possible answer? If anything, there will be continued pressure (if gas prices rise) to eliminate the gas tax.

  18. Chris Dudley says:

    There was an editorial in the NYT the other day saying that Copenhagen had changed the situation for oceans since a deal on trees had been worked out. Preserving bio-services in oceans could follow a similar path: http://www.nytimes.com/2009/12/27/opinion/27lafolley.html

    I think that a similar thing has happened with fossil fuels. Once the topic of a limit on temperature a has been broached, fossil fuels are no longer a strategic issues. One needs to figure out the best way to use those that will still be allowed to be burned, but it does not matter much anymore where they come from. China can get coal from Wyoming and we can get oil from Iran, who cares? What matters is making the transition smooth and low cost. In that context, peak oil is pretty unimportant. The US could help to bring the cost of oil down right now and keep it down for as long as it is important to do so. http://mdsolar.blogspot.com/2008/06/oil-is-too-expensive.html

  19. From Peru says:

    Well, I forgot the other “Socialism of XXI century” epicenter, that is completely at odds with the Venezuelan one: South Asia.
    There Maoist insurgents are spreading as bushfires in dry grassland.

    The reason is fourfold:

    1)The government of India has turned to the Industry as their main GDP growth provider. So the countryside was left behind. But it is there were the bitter fruits of tha so-called “Green Revolution” of the 1970s-1980s are emerging.
    The agricole production was increased 4-fold thanks to intensive land exploitation based on massive use of groundwater and highly toxic fertilizants and pesticides. Noew the water table is falling several meters per year in Northern India, and the grounwater is in many areas poisoned by decades of agro-chemical use.
    Poor peasants now have not access of groundwater, so they depend on the moonson rains. And their lands are heavily polluted, so the rate of intoxications and cancer has soared.

    2)The massive air pollution coming from both Factories and Agricultural Fires hasd created a 3-kilometer thick layer of toxic smog, the so-called “Asian Brown Cloud”. The observations and models of the research group of V. Ramanathan indicate that this layer of smog is weakening the monsoon by dimming the sunlight that power it.
    A dramatic example of that is given by the 2009 Indian Drought: the moonsoon rains were more than 15% below average. The result was a collapse in agricultural production that make the grain prices soar by 100-200%. As this was not enought, in late-September a series of flash floods hit mid-Southern India, destroying a lot of fields that survived the drought and a lot of grain storage facilities. The country is now importing grains massively to prevent widespread famine.

    3) The massive US military operations in Afghanistan and Pakistan make the zone the ground zero of US Iimperialism, and the stories of atrocities in the “Af-Pak” area are now widespread in the area fueling People’s fears and People’s Anger.(thank you, Mr. Bush! I have no idea what should Obama do, from a change of strategy to a military withdrawal, any idea?)

    4) The Maoist insurgents have seized the oppotunity and leaved their inter-factional fights and joined in 2004 forming the Communist Party of India (Maoist) or CPI(Maoist) in short.
    Since 2004, they spreaded like bushfires in dry grassland and now control1/3 of India’s countryside. The Maoists oppose the exploitation of mineral resources in their areas, gaining the sympathy of the Natives.
    The government had launched several antinsurgent operations that were a total failure and the atrocities suffered by tribals in the war zones have turned them, millions of Native Adivasis, Dalits and Lower Caste peasants, against the State and now support the Maoists.
    The government is decided to eliminate them, and now launched the biggest operation to date, the so-called “Operation Green Hunt”. Currently thosands of Natives are leaving the war zone.
    The reason for the desperation of the Government seem to be the interests of Big Business, that need the COAL and IRON ORES to power their industries.

    Particularly distrurbing is the fact that this attack against the insurgents have begun AFTER THE WORST CLIMATE DISASTER IN 30 YEARS (THE DROUGHT), and that even the so-called “Mainstream Communist” parties support the Military anti-insurgent operation.
    So it seems the only way out for nealy a BILLION of poor peasants to express their opposition to the current economic scheme (that really seems the ultimate Ponzi Scheme)is the ARMED REVOLT (called “People’s War” by the Maoists).

    This situation is worsening month by month. The Maoists now have menaced with Luddist-like attacks, for exaple, they warned West Bengal State to close the Sponge Iron Plants, accused of polluting the air in Adivasi Tribal Areas, or they will BOMB THEM.

    This while the government, in a behaviour totally insulting to millions of starving peasants, doesn’t want any emission and pollution regulation to “guarantee economic development”. Yes, the development of Billionary Industrials…

    The phenomenom is not restricted to India. Bangladesh, Bhuthan and specially Nepal are affected. In Nepal Maoists nearly won the elections. They are united in the Coordination Comitee of Maoist Organizations of South Asia (CCOMOSA).
    They also talk about “Socialism of XXI Century”, and unlike Chavez, are totally anti-coal, anti-industry, anti-fossil fuel use. But they also are MUCH MORE VIOLENT.

    Really is very sad that in the Country of Mahatma Ghandy the resolution of the extreme rural povery, residual feudalism, and massive pollution and Climate Disruption are now not in the hands of Mainstream Politics, but in the hand of an extremely violent Maoist Insurgency.

    Guerrilla Warfare, Luddist-like bombings, that is the only possible salvation for more than 1 Billion South Asians?

    Really Human Stupidity is astounding!

  20. Rabid Doomsayer says:

    June 2014 oil futures (light crude) are $94. Bargain! Deal or no deal we are going to want every drop that we can suck out. Alternatives will take time to ramp up and there will be false starts.

    We are searching for oil at 40,000 feet, not cheap and not quick. We are using huge amounts of energy to get oil from the tar sands. We will cease to extract oil when the energy required exceeds the energy extracted, irrespective of how much oil remains.

    Comparing the oil that will not be available as the whales decline, against the oil that is becoming available from new elephants we have hit peak. There is no replacement for that super K, giant of whales; Ghawar.

    Do the sums, look at the super giants declining. Then consider it is not just how little oil there is, but how fast can we suck it out.

  21. Bob Wright says:

    The continued recession with empty houses and closed stores and factories, at least one new Prius in my town every week, 40 mpg subcompacts, 30 mpg small SUVs… East coast oil refineries closing units and laying off workers. Iraq about to gear up with international oil companies for record crude exports. It looks like stable prices for a while (unless the sabre rattling towards Iran heats up again).

    Let’s hope for a win-win-win with oil demand and prices staying low, and making tar sand production unprofitable.

  22. stroller says:

    Take the bet Joe!
    Prices will rise as the temperature falls.

  23. From Peru says:

    Will Big Oil push the Sionist nonsense about Iran Nukes to drive prices up?(actually Iran’s Nuclear + Wind policy is a smart one to deal with Peak Oil)

    Given current political turmoil in Iran, the political wheather in the area will probably heat up…

    By the way, how many Big Oil Businessmen are ultra-pro Israeli ones?

  24. evnow says:

    #19 from Peru

    Thankfully socialism in India went with the Gulf war I in the 90′s. Unlike the lip service that was paid to the poor in the socialist days – now people are really being lifted out of poverty.

  25. Leif says:

    From Peru: You ask, what should Obama do as a changed policy from the Shrub? I think there is only one approach that has even a slim possibility of success and that is to take about 200 billion dollars out of the defense budget currently allocated for weapons and transfer to social strife and climatic mitigation as expounded by Lester Brown in Plan B 4.0. As you point out above, the masses first and foremost need food and water. The US can help to a degree but as agriculture becomes more problematical the world over, (10 to 15% of US corn not harvestable this year due to weather anomalies). However we do have the one thing in abundance that the world will need for the future and we are too near-sighted to recognize it. HIGH TECHNOLOGY. Unfortunately all that brain power has been focused toward maximizing profits and mot social well being. “I know, what is good for GE? is good for the USA.” Unfortunately that is crap as witnessed by the present. Business as practiced means consolidation of the wealth and a toxic legacy and service jobs for the masses. And business god-damn well knows it and cares not…

    On the other hand: If you have a working cell phone you might know the best direction to go to escape a flood, buy food, strike a deal. Solar or wind power could help pump water, make your night time productive. A charged computer could forecast weather, or function as an onsite school teacher.

  26. From Peru says:

    Maybe the only hope for Indian Subcontinent, apart from Maoist Revolution, will be a strong pressure on the current Criminal Government to stop his War Against its own People and adopt emergency measures to save Agriculture.

    That is:

    -Aggressive Land Reform, with abolition of all residual Feudal practices and expropiation of all Big Agrarian Properties.

    -Switch to sustainable agricultural practices, eliminating the use of toxic agro-chemicals, monocultives, and building a cluster of mini-reservoirs to accumulate water from the monsoon season.

    -Erradicate the burn-and-crop tecniques, that produce so much smoke that it make nearly half of Indian Pollution (google “Proyect Surya”, by V. Ramanathan)

    -MAKE AN AGGRESSIVE EMISSION REGULATION, centered specially on reducing BLACK CARBON EMISSIONS. This is fundamental for PREVENTING TOTAL MONSOON COLLAPSE.

    But the West need MORAL AUTHORITY, and it can’t put pressure on Indian Government without
    1)Withdrawing troops from Afghanistan-Pakistan
    2)Do drastical emission reductions, specially the BLACK CARBON ones.

  27. Neven says:

    Isn’t the problem with tar sands and oil shales etc that they can only extract a relatively low amount of oil per day? Just a few million barrels, where US/Global consumption is 20/80 million barrels per day? And let’s not even get into the net energy or EROEI issue here.

    There will be no ‘solution’ until the root cause, ie the neo-classical economic concept of infinite growth in a finite system, gets addressed. Everything else is dealing with the symptoms and will not avert serious problems.

    Emphasizing this should also take the sail out of the right-wing argument that AGW is used to destroy capitalism. There’s nothing wrong with capitalism, but if you base it on the economic concept of infinite growth, you get what the world is getting now: AGW, Peak Oil, ocean acidification, top soil erosion, financial bubbles, psychological-spiritual-physical problems, dead oceans filled with plastic debris, resource wars. Surely capitalism can be based on something less destructive?

    The most important step to take towards real solutions is to replace the litany of ‘growth is good’ that is taught at all economic faculties and business schools around the world with something that is truly sustainable: steady-state or biophysical economics.

    There is a wealth of potential articles in this subject, Mr Romm. Please, give people like Herman Daly and Charles Hall some space. Promote http://www.casse.org. I hope you find some space for this on your excellent blog in the near future. All the best for 2010!

  28. Neven says:

    Oops, I meant CASSE.

  29. Michael Lynch says:

    Back from winter break and getting caught up now, Joe. I have a couple of suggestions to make. First, let’s not wager on price, since that is only loosely correlated to ‘peak oil’ as you say. A major recession, bird flu, lots of things could send prices down, just as unrest in Iran, Venezuela, etc., could send it up. So let’s bet on actual production, and not just global production (which can be depressed by low consumption), but non-OPEC production. I’m assuming that you agree that non-OPEC oil is more constrained than OPEC oil (even ignoring the presumed inflation of OPEC reserves in the 1980s), and that in accordance with your 1996 argument about rising Persian Gulf market share, and your current belief that the peak is here or near, you expect non-OPEC production to perform poorly, presumably decline.

    So why not wager on whether non-OPEC production increases from, say, 2008 by, say, 2013 (just throwing out dates). We can use BP or IEA data to confirm.

    Second, would you agree to a debate? I can set something up in Washington, we each have a chance to talk 20 minutes, respond for 10 minutes, then go back and forth with questions, etc., covering 2 hours. The point is not to just have a he-said, he-said back and forth, but to get to some of the real, underlying issues.

    Waiting to hear from you, Mike Lynch (aka Spike the Evil Vampire, the Faith Healer, Darth Vader, etc.)

  30. Michael Lynch says:

    If you don’t wish to debate me, Joe, you can certainly arrange a stand-in. Perhaps Robert Hirsch, who is in the DC area.
    Mike aka Darth

    [JR: I want you to take the bet that you offered me. That's the puzzler here. What's the point of a debate if you won't even back your own blog posts with a bet??? It suggests your words don't mean much.]

  31. Michael Lynch says:

    Gee, I thought science advanced through debate? I am willing to make a bet: $5k says that non-OPEC liquids in 2014 is greater than in 2009, using BP as the data source. Let me know if you will accept, or what revisions you want.

    [JR: That is a meaningless and uninteresting bet. It has nothing to do with "science." Price is what affects people's lives. You are the one who laid out the bet that you are now retreating from. Indeed, for reasons that aren't clear to me, you decided to post on a far-right-wing anti-science website, when you never struck me as that sort of person at all. That's your business, I suppose. In any case, our entire back-and-forth has been over price. I take it now you are conceding that your that is a losing one.]