Wednesday, February 2, 2011

Hayward-Deneen Wager Update

I haven't written much of late here about "peak oil," though my concerns and interest in the subject have not waned. I've been working on some other projects (ultimately connected), and in general have posted here less.

That said, I have been following the price of oil, and as I predicted, with the increase of economic activity (I won't deign to call it a "recovery"), the price of oil has been steadily rising. It has now settled in at about $90/barrel, and may yet spike if there are concerns about the security of the Suez canal.

Since it's February 2, I have a note to myself on the second of each month to check in on the gauntlet that was thrown by Steven Hayward at AEI on June 2, 2008 (so, 2 years, 8 months ago). At that time Steve was confident that on three years from that date, oil prices would be below $75 a barrel. I was confident that it would be well above that price. He was feeling pretty good about his position a year ago, in the midst of the economic crisis (though, truth be told, this was not the reason he thought that oil prices would come down - he thought that we would come up with a cheaper alternative within three years' time. I suppose, though, the market did speak - in part in response to $150/barrel oil, the world's economy cratered).

With four months to go until the three year mark, I'm starting to feel pretty good about my chances. Unless there's a severe "double dip," I don't foresee oil dropping much below current levels. And, just about the time the snow will melt, we'll begin hearing more about the beginning of the "summer driving season," making doubtful the prospect of a $15 drop in oil prices. So, Steve, I hope you've saved up for my book or the dinner or both - I have to look back at the specifics of the wager, but there's a nice space on my bookshelf for the new Tocqueville bilingual edition of Democracy in America at Liberty Fund, and/or I've been wanting to try a few new restaurants in D.C....

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