Betting on Cheaper Oil

The insightful New York Times columnist John Tierney has placed a $10,000 bet with peak oil doomster Matthew Simmons. Simmons is author of Twilight in the Desert: The Coming Saudi Oil Shock and the World Economy which predicts soaring oil prices soon because Saudi oil reserves are much less than they've been telling us.

The bet is modeled on the famous 1980 Julian Simon/Paul Ehrlich bet over the future prices of a basket of five metals. Simon handily won the bet in 1990 when the prices of the metals selected by Ehrlich had fallen by more than half.

Simmons is betting Tierney "that the price in 2010, when adjusted for inflation so it's stated in 2005 dollars, would be at least $200 per barrel."

For the record, when I report the story on January 1, 2011, I expect Tierney will be the winner.