Oil shortage, schmoil shortage

The Sunday NY Times magazine had a long article by Peter Maass about the “peak oil” theory which suggests that petroleum shortages are inevitable and triple-digit oil prices are not far off. Scary stuff, if true. Steven Levitt at Freakonomics isn’t convinced:

One might think that doomsday proponents would be chastened by the long history of people of their ilk being wrong: Nostradamus, Malthus, Paul Ehrlich, etc. Clearly they are not.

And speaking of Paul Ehrlich, NY Times columnist John Tierney has just replayed Ehrlich’s famous wager with Julian Simon, betting analyst Matthew Simmons that a barrel of oil will be cheaper (adjusted for inflation) than the $65/barrel price today. Simmons – a real pessimist – is convinced a barrel of oil will be selling for over $200/barrel in 2010.

Yeesh. I think the only possible way that Simmons’ prediction could come true is if Saudi Arabia runs dry over the next five years, and that’s simply not going to happen. OTOH, if Simmons is correct, shouldn’t we start exploring and developing oil production in ANWR? Toodle-loo, caribou!