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(2) With regard to the Carmel VaporTherm technology, it is
sufficient to reiterate that it was not known whether such
technology would work on Cromwell's acreage, and Cromwell could
have licensed the technology directly from the inventor for no
fixed fees.
(3) The credible evidence establishes that pilot tests are
necessary when there is not enough information available to know
whether and how well a proposed technology and project would
work. This was Cromwell's situation. It licensed untested,
unknown technology, and it had always planned to do a pilot. Any
argument against the need for a pilot to test the usefulness of
EOR technology conflicts both with respondent's experts and
recognized industry practice and is not credible.
(4) Regarding energy price predictions, there is no dispute
that many people expected oil prices to rise. Respondent's
experts took price increases into account in their analyses. In
Krause v. Commissioner, supra, we recognized the anxiety that
existed in the late 1970's and early 1980's concerning future oil
prices, and we still concluded that the stated consideration for
the license from Elektra of EOR technology and for the lease from
TexOil of tar sands acreage was unjustified. The U.S. Court of
Appeals for the Tenth Circuit reviewed our findings in this
regard and found no error. Hildebrand v. Commissioner, 28 F.3d
at 1027-1028.
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