Joe (Romm), Where Art Thou? (my peak oil bet deserves an up or down)
In a post on his blog and then again on the Huffington Post, Joe Romm challenged me to a wager on oil prices, claiming prescience concerning the price rise in the past decade compared to my 1996 forecast of low prices for two decades. He seems to be implying that that I have refused to wager him, having closed the webpage to any further comments.
I find myself taken aback, as my experience with the blogosphere is somewhat limited. My experience is primarily as an academic, writing articles for refereed journals and books, as well as working papers, with an intention to make them carefully sourced and referenced. A blog can consist of nothing more than a rant, and the comments appended to them often worse (and usually anonymous). I will not however yield to the temptation to follow suit (even if our illustrious moderator would permit it, which he won’t).
Having put up approximately 20 posts on the subject of peak oil, it might be thought that Romm is an expert on the subject. But so far as I know, he has a grand total of one article on oil, his famed, “Mideast Oil Forever” Atlantic Monthly piece (co-authored with Charles Curtis), which is the source of his pride on the subject.
A careful reading of “Mideast Oil Forever” shows that his argument was not so much that prices would soar, but that global dependence on Middle East oil would soar, which has not happened. My argument was that the forecast of rising Middle East market share was likely to be incorrect, and it was (see Figure), so that economic fundamentals would not imply ever rising prices.
Forecasts of OPEC Market Share from 1996/97
Which is a far cry from saying my forecast was wrong and Joe’s correct. In my testimony, I specifically stated,
“The reality is that prices may go up in the future. And Persian Gulf oil production and exports will rise. However, the most likely scenario, given what we know about oil supply and demand and what we have learned about forecasting in the last 10 to 15 years, is that OPEC is going to be under continued pressure for at least the next 10 years, possibly for much longer, that they will be fighting with each other for market share. And, it’s going to require some very substantial changes in the world to see prices rising.” (See my opening statement on pp. 127-128.)
Arguably, the price collapse leading to the rise of Hugo Chavez, the September 11 terrorist attacks and the Bush Administration’s decision to invade Iraq, are those ‘substantial changes’. Certainly, not the soaring Middle East market share predicted by Romm. (Since he downloaded the transcript of the hearing, it’s not clear how he missed this.)
And I allowed for this in my testimony, specifically commenting in my opening remarks, “But, I’m not saying there won’t be an oil crisis, because an oil crisis is a short-term political event. If there were a civil war in Saudi Arabia today, we would have a big oil crisis. But, all I’m trying to say is that the crisis is not really related to the level of U.S. oil imports or the level of world oil demand.” This is, in fact, what happened.
So What Happened?
Joe’s posts on peak oil include references to forecasts of oil prices hitting $175 by 2016 (a Deutsche Bank analyst) and $200 without a miracle (the IEA, as interpreted by Joe). He has also predicted oil will hit $100 by this coming June (which it might), which raises the question of why he wants to bet on $40 oil prices for the next few years, instead of something closer to what he expects….
And I responded to Joe by offering a wager with the price level at $65, whereupon he admitted (thank you) that “I do take Lynch’s point that the oil price is not definitive proof one way or another of the peak oil theory…” and commented that other factors could take the price down, such as a recession, before adding, “Yes, I’m sure many readers would love me to take this bet. Not gonna happen.” (Although he thinks that if prices are below $65 without some external event such as a major recession, that would disprove the argument oil production has peaked, which is also arguably incorrect).
So, to be accommodating, I suggested that we have a debate (and he could send a surrogate, if he wasn’t comfortable), adding that we change the bet to production itself, offering him what most peak oilers would accept as very generous terms, namely that non-OPEC production would rise by 2013 instead of decrease. (Nearly all forecasters, not just peak oilers, are more pessimistic than that.)
Joe’s response was not completely coherent. He reverted to the earlier bet on prices (as near as I can tell), said that betting on production was “meaningless and uninteresting”. Perhaps, not being a physicist and lacking a Ph.D. and a blog, I don’t understand why betting on production levels would be meaningless in the context of a peak oil discussion, and some readers can enlighten me. (Note: all of Joe’s posts on the subject are in the peak oil category of his website and include the silly bell-curve “You are here” peak oil graphic, so he can’t claim that this isn’t about peak oil. Well, he can: obviously, facts shouldn’t get in the way of a good blog, to paraphrase Robert Wuhl’s ‘go with the story’.)
Do You Know Jack, Joe?
Romm’s refusal to debate should actually be taken as a point in his favor, inasmuch as he really doesn’t know much about the subject. Joe exhibits that wonderful quality of ‘expertiness’ (with apologies to Steven Colbert), in which he appears to be an expert, with many posts and comments on peak oil, was an Acting Assistant Secretary of Energy, and has a Ph.D. in physics from M.I.T., a noble institution (and my alma mater), but these are all misleading. I will address the evaluaton of qualifications later, but point in fact, Joe has a grand total of one publication on oil, in a non-referreed journal, and that relies primarily on the US Department of Energy for its information about oil. Nothing in his background suggests he is familiar with oil or oil supply, and his posts on the subject display a marked ignorance.
So, What Are We Left With?
Joe Romm posts a challenge to me on his peak oil website section (but doesn’t inform me of it), and then slams me on the Huffington post, except:
His criticisms of me are misguided, bragging about his prediction that oil prices would rise because of soaring reliance on Middle East oil, which did not happen, and he says I predicted prices would stay low for a lengthy period, when in fact, I acknowledged that oil prices could rise with supply disruptions.
He says he won’t wager on prices, because external events can affect them besides peak oil, then declines a bet on production by demanding a bet on prices.
He closes the page to comments, while stating that I refused the bet, which is untrue.
Others are welcome to clarify my interpretation, by looking at his posts here, specifically numbers 1, 29–31, rest are pretty much wasted space.
So, my suggestion is that if Joe doesn’t believe in peak oil enough to either wager on the subject or debate it publicly, perhaps he should either exclude the subject from his website or admit he is only passing on third-partly information, which he believes in because he ignores all contrary points of view and denounces those who hold them. Of course, that sounds more like how the Catholic Church responded to Galileo than the pose that a scientist should hold.