How Politicians Unknowingly Hurt The Oil Industry

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Political actions often impose costs on the oil industry and consumers that are not obvious.

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e"war profiteering," taking aim at businesses' record profits as households grapple with soaring inflation. One of the dumbest political soundbites was President Obama saying, about a bridge, “You didn’t build that.” His basic argument was sound: government not business provides public goods like infrastructure.

Politicians—like most of the population—generally have no sense of economics, let alone business, and frequently take steps that are economically irrational because they don’t perceive the costs being inflicted on companies. Most egregiously, setting regulations and then canceling them means that companies are forced to make investments to satisfy them, and then write them off as losses.

But also, if governments take steps that interfere with project developments, the delays add to costs but again, in a manner that isn’t very transparent. A company that buys a lease in the Gulf of Mexico and then finds drilling or development delayed because of a government interdiction is bearing a significant cost—the interest payments on the money spent for an idle project. And if production is postponed, the net present value of the investment drops, sometimes significantly.

In the figure below, I compare the discounted present value of an income stream from a stereotypical shale oil well . In the first case, the well is drilled and brought on line in a couple of years and then production and revenue start and decline abruptly, as is typical for such wells.

 

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I wouldn't go so far as to say 'unknowingly,' it's driven by greed.

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Not all politicians… just the election thief

I don’t care about the oil industry

Dang he bout 900 years old man 😂

He campaigned on putting the industry out of business. Biased article, fake news designed to manipulate the truth…

If only Exxon gave to their cause as much as FTX, nothing unknowingly would happen.

Oh God more politics and religion my grandpa warned me about this stuff

“Unknowingly” bahahahaha 🤡🤡🤡🤡 recordprofits onlyhurt taxpayers

I would prefer ascoundrel like Trump than this a ss h ole

Let’s hurt US oil companies(the ones we collect billions of tax dollars from every year) in the name of climate change so we can turn around and buy oil from Russia at higher prices, and then give money we don’t have to Ukraine.

Unknowingly, really you think this is not getting even between old families both here and abroad?

Unknowingly? Yeah...OK

Should we shed a tear for an industry that has ruthlessly fought change too save our planet & way of life while making obscene profits? I think not.

I'm only sad it was unknowing. they should be intentionally sabotaging it. along with all greedy corporate swindlers and grifters

You should say knowingly because all actions got consequences

...and Americans

Hurt me with another year of record profits. It’s so hard controlling and profiting off the literal spigot of the world economy.

Unknowingly or intentionally Thank Joe or his puppet master?

and that's a good thing..

Forbes headlines are unknowingly hilarious.

Biden 'unknowingly' put ourselves at the mercy of dictatorships by 'unknowingly' hurting domestic oil.

Biden did it intentionally

Covid Outbreak in China is real!

UNKNOWINGLY , I Call BS , Democrat Overlords Know What they do ,

“Unknowingly” LOL

You keep using the word unknowingly’ Forbes…their policies & words (not the lame denials & blame) have been very specific in targeting the oil industry

Politics undoubtedly have massive potential to undermine private industries. Political powers have a responsibility acknowledge this risk! It seems too good to be true at first, but it’s negligent. Private industry will eventually seek to cut political ties for freedom.

The title of the article is completely biased. How they can use the term unknowingly

“Unknowingly”

Who gives af about the oil industry anymore? End oil subsidies

'unknowingly' 🙄

Taking subsides away from oil and give it all to climate change

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