I have asked Jeremy Leggett, now CEO of Solar Century and author of Half gone: oil, gas, hot air and the global energy crisis to back his prediction that the world will reach ‘Peak Oil’ by 2010 (ie. oil production will start to fall after that date). I regard this as very unlikely, but he seems to mean it. Over dinner some months ago, we agreed to bet on it.
My prediction and outline arguments are lodged with the Long Bets Foundation, (see post below) and are awaiting a challenge through a bet. Long Bets promotes ‘predictions with acountability’, by having people bet on their predictions – their reputations mainly, but also money that goes to charity. Obviously, I can win this in 2011. To prove a real peak requires many years – there was a false peak in 1979 that wasn’t surpassed until 1994 (see chart), but we have agreed a protocol for settling a bet.
Hooray… advance to 2012 and I have won this bet. £1,000 has been donated by Dr Leggett to Wateraid. He was defeated by the effect of prices on innovation and activity. Even though in 2012 there is recession and geo-political barriers to oil export in Iran, Iraq and Libya, the industry still matched supply and demand at a price that was not so high that it was sufficient to reverse the underlying pressures from growth. Peak oil is underpinned by a nonsense, static view of how natural resources, activity, innovation, substitutes and prices interact.