which may be termed 'political. risks'-may be important deter- minants of investment. After taking such risks into consideration in the exploration and development stage, a firm computing the pres- ent value of its probable income stream must consider several other factors. In addition to the current rate of production, it must con- sider these: (I) engineering limits to the rate of extraction in any given period, (2) physical limits to the total amount of the resource that can be produced within a given location, and (3) limits to the availability of new petroleum sources at the same costs...