John Tierney crows in the NYT:
Five years ago, Matthew R. Simmons and I bet $5,000. It was a wager about the future of energy supplies — a Malthusian pessimist versus a Cornucopian optimist — and now the day of reckoning is nigh: Jan. 1, 2011.
The bet was occasioned by a cover article in August 2005 in The New York Times Magazine titled “The Breaking Point.” It featured predictions of soaring oil prices from Mr. Simmons, who was a member of the Council on Foreign Relations, the head of a Houston investment bank specializing in the energy industry, and the author of “Twilight in the Desert: The Coming Saudi Oil Shock and the World Economy.”
I called Mr. Simmons to discuss a bet. To his credit — and unlike some other Malthusians — he was eager to back his predictions with cash. He expected the price of oil, then about $65 a barrel, to more than triple in the next five years, even after adjusting for inflation. He offered to bet $5,000 that the average price of oil over the course of 2010 would be at least $200 a barrel in 2005 dollars.
Crude oil prices are at about $91 today.
I certainly would have bet against Mr. Simmons, as well, but he didn't offer to bet me.
My suspicion at the time was that Simmons was, more or less, writing a $5,000 check postdated January 1, 2011 to buy his book publicity right now on the NYT op-ed page. That might explain why he didn't haggle and try to split the difference with Tierney, such as putting the win-lose line halfway between $65 and $200, the way a real betting man trying to make money would. But a public bet that the price of oil would be, say, $132.50 or higher would have been kind of a boring story. In contrast, a man confident enough to put $5,000 on the round number of $200 is a man who is acting like he might know something, and thus you'd better buy his book to find out what it is.
All that said, I fully expect to see gasoline pump prices of $5 to $10 per gallon. (I'm just not telling you when.)
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