Extractive markets exist in constant tension between private drive and public virtue, and they deliver on neither.

Look at the promise both state and capital make.

Both vow to bring you prosperity, and in practice, deliver plunder. Both exploit, extract their pound of flesh, and then leave the costs for others to endure. What looks like control blurs into collusion, and what begins as oversight devolves into a procurement racket.

If every reform fails, the core abuse runs deeper: land is a lever of power. Power to amass, to preempt, to withhold, and to deprive those without. Control it, and you set the terms for the pace, the flow, and the fallout. So capital hoards, the state enables, and both bend to serve that grip over power.

Private Rule

Lean toward private rule, and firms will bleed nature to please shareholders. They want instant payouts, so they drill, drain, then abandon. This means deeper, faster penetration (as they leverage high-yield debt), aggressive fracking (as they exploit contract labour), and enhanced EOR tech to maximize flow-rate (as they push geological limits).

No heavy industry has ever self-priced its externalities to account for its real death toll—every spill, leak and decommissioning cost will land on you.

This isn’t abuse of the system. This is the system. Limited-liability firms exist to sever risk from responsibility; they extract gain, then externalize collapse. Once their reserves are booked, they’re pushed through repo chains to tap cheap liquidity, magnifying their leverage far beyond their actual yield. One fragile well becomes collateral for layers of derivatives held by pensions and insurers. One shock, and the public bleeds for every speculative loss.

This is private enterprise—perfectly optimized to dump the entire liability stack on you and walk away clean.

And of course, when industry dominates, safety rules become farce. Integrity data (pressure tests, flare volumes, pipeline scans) are self-declared, and audits come once a decade. Fines are a fucking joke, trivial, and even shut-in orders come with exit clauses and legal sleights so firms can stall, sidestep, or quietly undo them.

Capitalists love this weak oversight—until someone dies, and they’re now staring at serious felony charges for their lethal negligence.

Bureaucratic Decay

Lean public, and reform just decays in bloat and inertia. Bureaucracy gains prestige from process, not results; electoral turnover severs today’s decisions from tomorrow’s costs; and every delay is a gateway for those with power to exploit the wait (trading favors for access).

Lease rounds drag for a decade; each permit demands another study, another baseline survey, another lost year; payouts stall behind five desks; and wells run on half-life rigs with dead sensors that bleed reserves. By the time drilling starts, the tech is obsolete, the seismic map irrelevant, the project well past its price window—and the public trust gone.

Regulators all promise safety. Then they defect to industry, stamp exemptions, seal data as proprietary, sell waivers to the highest bidder, and move on. When they don’t defect, they become paralyzed by inertia instead, stifling emergent tech. Graded on clean incident-free metrics, they focus on optics—micromanaging trivial bullshit to exhaustion (and yet issue ‘variance’ letters to the firms that promise them jobs in a swing district).

Subsidies all start small—framed as risk buffers to push capital into energy frontiers. Over time, they harden into corporate welfare. Once rigs break ground and decade-long LNG contracts lock in, the subsidies all become lifelines for the agency in question. Regulators build offices around it; bureaucrats claim their turf; companies, suppliers, officials all embed the subsidy into their cost structure and off-book incentives.

Cutting the subsidy now feels punitive, so every party merges into one lobbying bloc. Each budget cycle, concentrated pressure demands renewal, met only by scattered, faint calls for repeal. The privileges all survive, the add-ons pass as ‘transition support,’ and cost discipline dies.

Mixed rule

Lean toward mixed rule (the norm) and the worst of both endures. Production-sharing contracts front the cash for operators, leaving every abandoned well to taxpayers. Firms see this asymmetry and play it well; they can lease cheap, hold long, magnify depletion allowances, deduct casing, sand, flowline, then walk—leaving dead wells to rot on the public ledger.

This incentive infects every stage of field development. Prime fields sit half-finished; half-built, overcapitalized, frozen mid-cycle, leaving interest to compound. Marginal sites are stripped fast; operators dump sand and acid, blow pressure, foul aquifers, and leave the rest unrecoverable. All that remains is debt, waste, and no steady output. The hunt for ‘new frontiers’ loads the industry with even more debt and long-tail risk (leaving no buffer when the shock lands).

With taxpayers carrying every risk, firms ease back, wait longer, and earn more. The endgame is to fence the resource, delay completions, meter the flow, and watch quotas track their growing financial weight—never overtly, only through plausible surrogates like ‘added import’ and ‘refining capacity.’

The prize pays by just sitting still. Each year reserves stay untapped, scarcity deepens, forward prices steepen, and in-situ value compounds. Artificial scarcity becomes strategy, not constraint—cartels lock down leases, idle rigs, keep wells at minimum draw to defend price floors, and watch quotas suppress rivals.

This is whu mixed rule endures: it pays every power bloc. Landowners can keep the (unbounded) upside, then dump losses; politicians can flaunt jobs as ‘market dynamism’ and green pledges as public virtue; regulators can expand on audit fees—and the public bankrolls the damage. Efficiency dies, but the pact (landowners, officials, local patrons) secures the arrangement.

The Core Abuse

The engine of dysfunction isn’t state or capital, but the land monopoly. Land is forever fixed, liability is deferrable, and power is only fleeting, so both state and capital act on borrowed time; extract now, offload later. Politicians look no further than the next election; they inflate reserve estimates, float cheap bonds, then bless projects whose reclamation bills mature on their successor’s watch.

Net-present value wins—stewardship never figures in. Sovereign immunity absolves the state; limited liability shelters the investor. Every crisis (every orphaned well, every captured regulator) stems from this core problem: control the land, and you dictate the pace, bleed the commons, and socialize the fallout. The true monopoly is not of money, but of what is fundamentally scarce by nature, irreplaceable—in this scarcity, power endures.

Control what is irreplaceable, and power is yours.

Own the land, own the rules. Own the rules, own everyone else.

Control over the rare, the finite—these are levers of power that bind markets and governments alike.

The end, always, is absolute control and vertical lock-in—suffocating competition, taxing every downstream move, and feeding the monopoly.

In this hunger to hold what others cannot, nothing else matters; fence it, borrow hard, magnify capital barriers, and make the state a silent partner—once its treasury depends on your flow, it becomes your ally, bound by necessity.

All the debt then demands quick, high-grade extraction and slow release; regulators go soft and ease bonding to protect cashflow; and operators meter output to defend high prices.

Land is the true lever of power. Tax it, fully.

The LVT reclaims everything that has been stolen—and severs land from its parasitic hold.

Reserves now become liabilities; owners must sell, drill, or bleed.

Lenders, with rent-collateral gone, must face price risk openly; no more speculation. Bonding now covers full reclamation costs, and regulators finally have teeth. No capture, no land-lobby, only strict, paid-up oversight.

All firms now face the same fiscal squeeze to put assets to work; the LVT locks profit to stewardship. It forges a bond between wealth and duty, demanding that profit preserves the land that creates it. Firms will begin to form early to share the tax and pool high-recovery EOR, as capital shifts from lease hoarding to precision extraction and site remediation.

By taxing the reserve heavily, and the flow lightly, we can capture the scarcity rent, compel lean extraction, and leave capital free to optimize. Norway gets this: exploration, drilling and site-care is deductible, but once the oil flows, a steep upstream tax kicks in to compel efficient extraction. The US pays speculators as they wait; taxes on value-added downstream (processing, storing, conserving) are high, but the upstream (finding, holding, exploiting) is exempted. As soon as the raw product leaves the ground, tanker or pipeline, value-added on its way to the consumer is hit hard.

Land is power. Tax it, the power falls, and the cycle ends.

The simplest fix always stands ignored: shift the tax burden where it belongs—on land, not labor, and let efficiency drive the rest. Do this, and the field can finally open to transparent bids, full-cost accounting, and a universal right to share in nature’s yield.