The author's assertion was that LVT disincentivizes one from using the land productively, and used oil specifically as an example. This example is basically completely divorced from the realities of oil extraction. Nevermind that nobody is building wells in the middle of cities, where LVT matters.

So, that argument seems to rely on a contrived, unrealistic example. I can't see how LVT disincentivizes productive use of lands.