The Donahoo-Leigh Bets

Daniel Donahoo, a fellow at the thinktank OzProspect, recently wrote an article in New Matilda on our use of oil (the title is "Our Greatest Addiction" – alas you need to pay to view it). In the spirit of the Ehrlich-Simon bet, Daniel and I have now placed two bets on oil prices. He believes that:

  • Petrol will cost more than A$3.50 per litre on 1/1/2007
  • Petrol will cost more than A$5.80 per litre (in 2004 dollars) on 1/1/2025.
Not surprisingly, I’m adopting the stereotypical economist’s view that oil prices will stay pretty stable.
Watch this space….
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2 Responses to The Donahoo-Leigh Bets

  1. Graham Young says:

    Andrew,

    Daniel made similar predictions in this article – http://www.onlineopinion.com.au/view.asp?article=2631 – which I think are off the mark. However, I think your “pretty stable” prediction will be wrong too. I already have a bet that in 50 years the price of oil will be higher in real terms than it is today, but I wouldn’t be game to nominate a percentage increase.

    If we are to move from an oil based economy to something else, either something else is going to have to become dramatically cheaper, or oil much more expensive – I’m betting on a bit of movement on both fronts. The problem with Daniel’s forecasts is that something else should have cut in long before we got to his predictions, probably push bikes if it happened on his timescale!

  2. Alistair says:

    Well I have to agree with Graham Young and agree that prices will rise.

    What interests me is that will our spending on oil (as a percentage of GDP) go up, will we combat this by using less oil and turning to renewable sources (such as using hybrid cars)?

    Sorry for the vague post as I don’t know the actual percentages currently and say back 30 years. Would anyone know where to find them?

    Thanks
    Alistair

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