Group bets $100,000 against CERA supply forecast
HOUSTON, Feb. 6 /PRNewswire/ -- A group of businessmen and energy experts who believe that global oil production will soon peak, plateau and decline has issued a $100,000 wager to Cambridge Energy Research Associates (CERA), a prominent oil forecasting think tank. Members of the challenger group also renewed an invitation to hold a public debate on the issue of peak oil with CERA.
The group is betting against CERA's June 2007 forecast that world oil production capacity will reach 112 million barrels per day (mmb/d) by 2017, which extrapolates to 107 mmb/d of actual production, up from about 87 million barrels today. CERA will hold its annual conference in Houston next week.
"CERA is forecasting an addition of 20 million barrels within a decade," said Steve Andrews, co-founder of the Association for the Study of Peak Oil-USA (ASPO-USA). "That's a vision in search of reality. Anything is possible on paper, but we are betting you can't do that with the drill bit."
The challenger group also notes that CERA called for a civil dialogue on peak oil, but then declined several invitations to engage in such a conversation. Andrews said members of ASPO-USA would be happy to debate the issue, during CERA week, or at another time and place that is mutually convenient.
The 11 members of the betting pool have issued the wager to raise awareness about the fragile state of the world's future oil supplies. Participants include Jeremy Gilbert (former Chief Petroleum Engineer for British Petroleum), Matt Simmons (Houston energy banker), Jean Laherrere (retired oil executive), Herman Franssen (economist), Marvin Gottlieb (businessman), Jim Baldauf (ASPO-USA co-founder), Bob Kanner (investment manager), Scott Pugh (retired Captain U.S. Navy), Aage Figenschou (oil industry, shipping), Randy Udall (ASPO-USA co-founder) and Andrews.
"CERA's claims of 'plentiful energy resources' are misguided, overly optimistic and out of touch with recent warnings from oil industry CEOs," Udall said. "CERA projections have been wrong so often that policy makers should think twice about embracing their data," added Bob Kanner, CEO of Cleveland-based PubCo Corporation, who has wide-ranging investments in the oil and gas industry. "I'm participating in this bet to illustrate the need for greater truth and clarity in the prediction of oil and gas supplies. We're not just betting our money, we're betting our nation's future."
Marvin Gottlieb, who operated an international business for more than 40 years, understands the geopolitical forces that spawn conflict around the globe.
"Shifting patterns in global military and economic alliances are troublesome. Energy concerns are pitting American interests against those of Russia, Iran and China. American politicians must recognize the dangers of ignoring resource depletion. Energy realities are AWOL, absent without leave, in the current presidential campaign," Gottlieb said.
"Between 1950 and 2005, global oil production grew 800 percent," Udall said. "But now oil production in more than 50 nations is in decline. Evidence indicates that a peak in global production is near."
To call the bet, CERA must match the Peak Oil group's $100,000 letter of credit from National City Corporation. In the event production in 2017 doesn't exceed CERA's forecast of 107 million b/d, the individuals of the group have agreed to donate their winnings to an energy-focused non-profit organization.
"If the CERA seers really believe their crystal balls, they should call our bet," said Texas oilman Baldauf.
Note: Because "production capacity" is hard to verify, and since it might require access to and disclosure of proprietary information, the wager proposes an alternative threshold: Since world oil production at the end of 2007 was roughly 87 mmb/d, a ratio of (87/91) X 112 would be an equivalent production threshold. That threshold would be 107 mmb/d.
ASPO-USA is a non-profit, non-partisan group dedicated to educating the public and decision-makers about our peak oil and natural gas energy challenges. ASPO-USA's 2007 Peak Oil Conference was held in Houston. The 2008 Conference will be held in Sacramento, California from Sept. 21-23. For more information, visit http://www.aspousa.org/.
CONTACT: Jim Baldauf, +1-512-517-2663, or +1-512-250-8596, or Randy
Udall, +1-970-963-0650, or +1-970-963-0517, both of ASPO-USA
Web site: http://www.aspousa.org/