▁prices ▁decl ined ▁below ▁adjust ed ▁base ▁prices ▁resulting ▁in ▁zero ▁wind fall ▁profit ▁tax . ▁ ▁Over ▁the ▁ 1 9 8 0 - 1 9 8 6 ▁period , ▁it ▁is ▁estimated ▁that , ▁depending ▁on ▁the ▁assumed ▁supply ▁curve ▁price ▁el astic ity , ▁the ▁tax ▁reduced ▁domestic ▁oil ▁production ▁from ▁between ▁ 3 2 0 ▁million ▁bar rel s ▁( 1 . 2 % ▁of ▁domestic ▁production ) ▁and ▁ 1 , 2 6 8 ▁million ▁bar rel s ▁( 4 . 8 % ▁of ▁domestic ▁production ). ▁The ▁effect ▁of ▁reducing ▁domestic ▁oil ▁production ▁was ▁to ▁increase ▁the ▁level ▁of ▁imported ▁oil . ▁The ▁estimated ▁production ▁losses ▁caused ▁by ▁the ▁tax , ▁as ▁a ▁% ▁of ▁the ▁actual ▁level ▁of ▁imported ▁oil , ▁under ▁three ▁assumed ▁supply ▁curve ▁el astic ities ▁range ▁from ▁ 3 . 2 % ▁of ▁total ▁imports ▁to ▁ 1 2 . 7 % ▁of ▁imports ▁for ▁this ▁period , ▁depending ▁on ▁price ▁el astic ity . ▁ ▁The ▁tax ▁also ▁may ▁have ▁dist orted ▁the ▁way ▁resources ▁were ▁allocated ▁within ▁the ▁oil ▁industry . ▁Since ▁the ▁tax ▁was ▁im posed ▁on ▁oil ▁production ▁— ▁i . e ., ▁upon ▁its ▁removal ▁and ▁sale ▁— ▁extra ction ▁( and ▁other ▁up stream ▁operations ) ▁was ▁pen al ized ▁and ▁other ▁aspects ▁of ▁the ▁business ▁( ref ining ▁and ▁market ing , ▁the ▁down stream ▁operations ) ▁become ▁relatively ▁fav ored . ▁Thus ▁it ▁created ▁financial ▁in cent ives ▁to ▁shift ▁resources ▁from ▁expl oration