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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They knew exactly what they were doing

Am is the defacto largest producer n exporter of oil, if it wished to. It adopts a policy of ambiguity on oil to keep it high in competition with China. But the policy is shooting it on the foot instead of at its imaginary competitor. China is never keen on the 'competition'.

“Unknowingly”. Does Forbes do nothing but sham pieces?

Unknowingly 😀

*knowingly

I’ll be honest. I didn’t read the article. The headline is hilarious though 😂😂😂

Unknowingly Yeah, sure bro.

The Democrat Party wanted to hurt the oil industry. Their policies and agenda were designed to punish the oil industry. The 'progressive' Democrats are at war with the oil industry. The Biden administration is executing their plan

quite intentional

I resent your use of the word 'unknowingly.' Let's be truthful as say 'deliberately.'

This story is so funny! 🤣 Hi hunny. I “unknowingly” impregnated another woman. But, it’s ok. I didn’t know what I was doing. We all good? What’s for diner? Anyone else buying stupid? This narrative needs work.

Ha ha. Watch like the one time this guy campaigned. He tells you all about it.

Biden does almost everything 'unknowingly'😂

Unknowingly only because he has no idea where he is most of the time.

How about knowingly..

And yet, the industry is on target to be debt free by 2024. Talk about a misleading article. U.S. Shale has been a joke, they never missed raising production due to an event ....until now. They also bought 4,266 permits under Trump. There is no excuse.

These comments are gold! I think Forbes has a misunderstanding about the word unknowing. Strange, but maybe because they're so business-centric, english fell off the radar. 🤡🤡

Unknowingly?😄

If you don't allow my son Hunter Biden to sit on foreign energy boards then those energies will have to fail. So, help us out. Help us help you.

Unknowingly my ass!!!

It was knowingly and intentional

Unknowingly my ass !!

Unknowingly Really? That’s misleading! Try intensional! Green New Deal ring a bell?

It’s on purpose not unknowingly

Anyone who really believes they (unknowingly) hurt the oil industry needs to take their blinders off and see what it is really going on. They are doing everything in their unrighteous power to drop this country and the world to its knees.

LOL 😂 Unknowingly yea right 😆

Knowingly!! Intentionally!!

Unknowingly Hurt? Biden announced a war on energy and no more drilling, shu down pipelines..... and Americans suffer

oh no how horrible those poor oil companies

Hahahaha. Really? Unknowingly? Is this the “I’m making excuses for grandpa?” You got two years to build this narrative. I “unknowingly” screwed up the energy market to force everyone to get electric cars from the guy I hate on a power grid that can’t support it. Unknowingly.

Meme?

'Unknowingly' my flat white ass...

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