Matt Levine’s Money Stuff: Oil Companies Give Back the Cash (Correct)

People are worried about oil stock buybacks

Here is a theory you could have:

• The world runs on oil right now, demand for oil is high, the price of oil is high, and getting oil out of the ground is lucrative.

• In X years — pick a number — the world will not run on oil, because the environmental effects of burning oil are bad, and eventually, through some combination of better green-energy technology, consumer demand and government regulation, the world will stop burning oil.

• Therefore the oil-drilling business will produce a series of cash flows that is large now and will, ...