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While I largely agree on most of your points, I think there's a porblem with this: The incentive structure for a CEO or other executive at a large multi-nation
by miked 17y ago
While I largely agree on most of your points, I think there's a porblem with this:
The incentive structure for a CEO or other executive at a large multi-national oil firm is likely such that he/she would much rather have a lot of oil drilled in the short-term, rather than a smaller ammount of oil in the short-term and a larger total ammount over the long-term.
That seems to me a bit of a strawman, though I confess I know little about how the oil business works. The issue here comes down to a present value calculation for proposed investments. You seem to be implying that the Iraqi engineer pushed for short-term maximization thru the use of new technologies. But those technologies cost money, now. That would reduce the company's profit and (if he's a shareholder) his (short-term) return.
- Estragon 17y agoI confess I know little about how the oil business works So basically you're arguing from the axioms of free-market fundamentalism. \yawn\
- anamax 17y ago> So basically you're arguing from the axioms of free-market fundamentalism. Since he was responding to an argument with even less basis, it's curious that only the response rated the above comment.
- miked 17y agoI'm curious, are you saying that you know a lot about the oil business. And do you think that calling someone's position names (free-market fundamentalism) is a strong argument?
- vitaminj 17y agoThe risks associated with introducing new technology need to be taken into account. An oil company may not think it's worth the risk to try untested technology (or rather, try standard techniques on untested reservoir conditions). But the Iraqi engineer / regulator, who isn't bearing the costs of failed forays into new technology, may think its a good idea. So their incentives are different.