The Corporate Living Dead of Oil & Gas
This failure is doubly tragic because LNG exports represented a once-in-a-lifetime opportunity to rehabilitate natural gas pricing. Instead, since the advent of shale, gas prices have been systematically destroyed at levels unprecedented in modern business. Historically, natural gas traded at its 6:1 heating value equivalent to oil. That ratio has since collapsed—sliding to 50:1 in February 2024, and averaging 124:1 throughout July 2025 in Alberta. Producers remain in denial, dismissing our solution at People, Ideas & Objects as “collusion.” Their objections reveal either staggering naivetΓ© or a complete absence of business understanding.
If one were to calculate the differential between the actual prices producers received for natural gas and the 6:1 oil-equivalent benchmark, the magnitude of this dereliction becomes clear. The result: an estimated $4.7 trillion in lost natural gas revenues over the past 25 years. That figure alone should stun the industry. Yet outside of People, Ideas & Objects, the number provoked no discussion whatsoever—producers casually dismissing it as “opportunity costs.”
The absurdity of this denial was compounded in early 2025, when the EIA reported that 2024s average annual natural gas prices were the lowest on record in inflation-adjusted terms. And by August 2025, we finally learned what producers had been doing since late 2023.
Litigation as Strategy: A Symptom of Failure
Months after this pricing anomaly was first identified, producers had the choice to engage with People, Ideas & Objects to pursue a structured, constructive, and productive solution—or attempt a legal workaround. Predictably, they chose litigation. Shell, most notably, sought to claw back lost export revenues from those domestic purchasers. This reaction underscores not strategy, but desperation: a misplaced reliance on courts to remedy what are fundamentally managerial and structural failures.The results are staggering. By the most conservative measure, producers have already forfeited $4.7 trillion in natural gas revenues over this century alone—dismissed by officers and directors as mere “opportunity costs.” This framing is a distortion. No rational operator willingly abandons trillions in value. The reality is systemic incompetence. Counterparties such as Venture Global, recognizing producer sloth, have extracted profits effortlessly. It begs the question: why wouldn’t others ship the gas to Japan or Norway themselves and realize the windfall? The notion that litigation can restore that lost value or credibility is not only implausible—it is untenable.
The surreal element is Shell itself. When Shell, of all companies, believes it is entitled to sue for revenues it willingly concedes? For more than a decade, Shell and its peers defied their shareholders, delivered performance that scarcely registers on the commercial scale, and ridiculed in debate with People, Ideas & Objects—dismissing our solution as an argument over “opportunity costs.” Meanwhile, counterparties like Venture Global took the “opportunity” to earn billions in margins producers themselves abandoned. Only now, with litigation, does Shell acknowledge the true ”cost” of their negligence.
The Issue Now
Shell’s litigation—and any subsequent actions—implicitly acknowledges that producers were fully aware of the issue, its scope, its scale, and the enormous losses incurred. It also concedes an understanding of the differential between domestic and export prices as a direct consequence of the structural deterioration in natural gas pricing from the historical 6:1 ratio. Otherwise, those prices would be harmonized.People, Ideas & Objects has spoken to these matters extensively, while also putting officers and directors on notice regarding their fiduciary obligations and the implications of inaction for their Directors & Officers (D&O) Liability Insurance. If producers were aware of the issues and chose not to act, then their coverage could be jeopardized. Filing a weak, almost perfunctory lawsuit that fails the smell test does not constitute a remedy for their share of a $4.7 trillion problem.
“Muddling through” may be an option, but not for D&O insurers. Producers had been warned. People, Ideas & Objects formally advised officers and directors of the leakage in LNG revenues beginning October 11, 2023, in a series titled “This One’s Nuclear,” which detailed the free-on-board issue and the erosion of natural gas price structures. On January 24, 2024, in “Willful Misconduct or Negligence?” We specifically addressed the looming D&O liability exposure. Yet natural gas prices went on to record their lowest annual average ever, and the industry’s only visible response was to launch superfluous lawsuits.
Throughout 2024, People, Ideas & Objects published a 54-part series under the label Notice, documenting and discussing these issues. The final entry, “These Are Not the Leaders We’re Looking For, Part XXIV,” appeared on May 1, 2024. Taken together, these notices establish a clear evidentiary record—one that insurers could use to disavow liability in any shareholder vs. officers and directors action tied to the $4.7 trillion in losses.
The only regret we have is that the strategy People, Ideas & Objects developed to give officers and directors a “get-out-of-jail-free card” has gone unused. Our approach, “Issue Mitigated, Nothing Litigated,” would allow producers to materially reduce their exposure by supporting the development and implementation of the Preliminary Specification. With our budget fully funded, we could execute this strategy and meaningfully reduce their risk.
I am not a lawyer and this should not be taken as legal advice. These are facts based on the interactions between producers and People, Ideas & Objects since the LNG issue was identified. Anyone seeking legal guidance or validation should consult qualified counsel.
New Issues to Contemplate
First…
What we need are dynamic, innovative, accountable, and profitable producers. Instead, what we have are organizations defined by lethargy and denial. When natural gas prices began their structural decline in 2009, which officers and directors recognized the gravity of the problem? The silence spoke volumes—no one stirred. By 2015, it was evident that capital structures were unsustainable, yet again, no one acted. The reality is that solutions were available, and industry leadership was aware of them. Their willful inaction is indefensible.Second…
The alternative is clear. Clinging to outdated practices will only amplify losses as industry velocity accelerates. The combination of speed and complexity in today’s market all but guarantees the creation of countless “Venture Globals” at producers’ expense. Structural reform is no longer a choice—it is a necessity. Litigation may acknowledge that problems exist, but it is no substitute for strategy. Shell’s case was only the beginning; BP is next, with more to follow. These losses were predictable from the outset. The rational response is not the courtroom but the adoption of the Preliminary Specification. Equally troubling is the industry’s persistent reliance on tackling complex issues with one narrow, serial “solution” at a time. Such a piecemeal approach is a guaranteed path to failure in this marketplace.A New Paper
People, Ideas & Objects is preparing a paper that evaluates the legislative and policy initiatives advanced under President Trump’s Administration which directly affect American oil & gas producers. These measures are being assessed through the framework of the Preliminary Specification, demonstrating how this shifting policy environment will reshape industry practices. The conclusion is clear: the oil & gas sector emerging from these changes will bear little resemblance to the industry of today.Our review includes:
- The Big Beautiful Bill
- The GENIUS Act
- The proposed Clarity Act
- “Strengthening American Leadership in Digital Financial Technology”
- “Winning the Race: America’s AI Action Plan”
- Several tariff and trade agreements
- Alaska’s energy development initiatives
- Energy sector deregulation