This week has seen me rage at the bureaucracy. Something that I do to contrast the differences between our Preliminary Specification and the status quo. We are entering a phase where the difficulties are evident that action is needed to be taken. Evident to everyone within the industry that this is an unsustainable and particularly dire situation. But that is not the difficult problem. As we have discussed the investors have been abused in this industry for a number of decades due to the manner in which the SEC dicates the capitalization of assets. There is also the manner in which the people who work in the industry are abused. They are tossed on the street as soon as there is any problem being faced by the producer. The remaining people are expected to “pick up the slack.” It seems like we are still picking up the slack from the layoffs that occurred in the 1980’s.
An industry can’t be operated for the long term on short term thinking. And oil and gas has been operated on the basis of short term thinking. The third element that makes these actions all necessary is the natural decline curve of the oil and gas reservoirs. They are steep and unforgiving. A producer is the proverbial hamster in a wheel. This is what causes most of that short term thinking. If we take the decline curve into consideration at this point in time, on an industry wide basis. And understand the demands of the consumers of oil and gas in the next 25 years. We have more work than we could ever imagine. Not a time when the investors are considering writing off their investments in oil and gas and checking out technology. And the people in the industry checking out the tourist industry in Florida.
We are so poorly prepared for what is ahead. If you look critically at any producer firm. And in my opinion, the hamster is aged, running a marathon a day, at a sprinter's speed with nothing to eat. An impossible situation. We need oil prices that are at least twice what they are to meet the costs. And natural gas prices need to be at least three times as much just to cover their costs. I would suggest they need substantially higher prices than that. Consumers like to belittle the high prices of energy. They have so little regard for the value that they gain from the products that we provide that they have no respect for them.
I’ve developed a saying in my professional life that you should never expect a mouse to run like a horse. What I have seen is many people get promoted into positions that they are never going to be able fill and you know it’s going to fail. Right now we have an exhausted half dead hamster being loaded into the gates for the start of the Kentucky derby. All our money is bet on him winning the race, and really we know we’re doomed, but also know that damned hamster will run the best race of his life. He’ll just be run over as the horses come around the track again. What do we expect?
We need to prepare for that race in the Kentucky derby as a real thoroughbred. An industry that is in tip top shape and capable of taking on the challenges that face us in the next quarter century. We need to start from the ground up. With a new organizational construct, the Joint Operating Committee. The legal, financial, operational decision making, cultural, communication, innovation and strategic framework of the industry. An industry based on the Preliminary Specification, the user community and service providers. It will be in that way the producers will be able to approach the expectations of running like a horse in the most difficult race we have before us.
The Preliminary Specification and user community provides the oil and gas producer with the most dynamic, innovative, profitable and successful means of oil and gas operations. People, Ideas & Objects Revenue Model specifies the means in which investors can participate in these user defined software developments. Users are welcome to join me here. Together we can begin to meet the future demands for energy. And don’t forget to join our network on Twitter @piobiz anyone can contact me at 403-200-2302 or email here.