bundler (1.0.18) Impasse

Hi folks.

Just got this upon generating a new controller and view:

$ rails generate controller demo index
/System/Library/Frameworks/Ruby.framework/Versions/1.8/usr/lib/ruby/1.8/rubygems/dependency.rb:52:in `initialize': Valid types are [:development, :runtime], not nil (ArgumentError)

rails (3.1.0)
bundler (1.0.18)

I've seen this mentioned online in some places, and they're using other web servers. I'm on Snow Leopard using Apache 3.1.

Not really sure what to do. I do want it to be a development project, but I don't have to provide that from what I have seen. Just the controller and view names. I'm assuming this would be generated for any type of the three options (development, production, test).

Have I done something wrong?