Sunday, December 31, 2006

My Christmas tradition...

In past years I have blogged a specific writing of my favorite author, Ralph Waldo Emerson. This year I am extending the tradition to me two new blogs.

The writing that I have selected for this year is Ambraham Lincoln. A writing that was prepared for the president at his funeral.

From - The Complete Works of Ralph Waldo Emerson - Volume XI - Miscellanies (1884)
Contributed by Ralph Waldo Emerson


" NATURE, they say, doth dote,
And cannot make a man
Save on some worn-out plan,
Repeating us by rote:
For him her Old-World moulds aside she threw,
And, choosing sweet clay from the breast
Of the unexhausted West,
'With stuff untainted shaped a hero new,
Wise, steadfast in the strength of God, and true.
How beautiful to see
Once more a shepherd of mankind indeed,
Who loved his charge, but never loved to lead;
One whose meek flock the people joyed to be,
Not lured by any cheat of birth,
But by his clear-grained human worth,
And brave old wisdom of sincerity!
They knew that outward grace is dust;
They could not choose but trust
In that sure-footed mind's unfaltering skill,
And supple-tempered will
That bent, like perfect steel, to spring again and thrust.

Nothing of Europe here,
Or, then, of Europe fronting mornward still,
Ere any names of Serf and Peer
Could Nature's equal scheme deface; . .
Here was a type of the true elder race,
And one of Plutarch's men talked with us face to face."
LOWELL, Commemoration Ode.


WE meet under the gloom of a calamity which darkens down over the minds of good men in all civil society, as the fearful tidings travel over sea, over land, from country to country, like the shadow of an uncalculated eclipse over the planet. Old as history is, and manifold as are its tragedies, I doubt if any death has caused so much pain to mankind as this has caused, or will cause, on its announcement ; and this, not so much because nations are by modern arts brought so closely together, as because of the mysterious hopes and fears which, in the present day, are connected with the name and institutions of America.

In this country, on Saturday, every one was struck dumb, and saw at first only deep below deep, as he meditated on the ghastly blow. And perhaps, at this hour, when the coffin which contains the dust of the President sets forward on its long march through mourning states, on its way to his home in Illinois, we might well be silent, and suffer the awful voices of the time to thunder to us. Yes, but that first despair was brief: the man was not so to be mourned. He was the most active and hopeful of men; and his work had not perished: but acclamations of praise for the task he had accomplished burst out into a song of triumph, which even tears for his death cannot keep down.

The President stood before us as a man of the people. He was thoroughly American, had never crossed the sea, had never been spoiled by English insularity or French dissipation ; a quite native, aboriginal man, as an acorn from the oak ; no aping of foreigners, no frivolous accomplishments, Kentuckian born, working on a farm, a flatboatman, a captain in the Black Hawk War, a country lawyer, a representative in the rural legislature of Illinois ;- on such modest foundations the broad structure of his fame was laid. How slowly, and yet by happily prepared steps, he came to his place. All of us remember - it is only a history of five or six years - the surprise and the disappointment of the country at his first nomination by the convention at Chicago. Mr. Seward, then in the culmination of his good fame, was the favorite of the Eastern States. And when the new and comparatively unknown name of Lincoln was announced (notwithstanding the report of the acclamations of that convention), we heard the result coldly and sadly. It seemed too rash, on a purely local reputation, to build so grave a trust in such anxious times ; and men naturally talked of the chances in politics as in-calculable. But it turned out not to be chance. The profound good opinion which the people of Illinois and of the West had conceived of him, and which they had imparted to their col-leagues, that they also might justify themselves to their constituents at home, was not rash, though they did not begin to know the riches of his worth.'

A plain man of the people, an extraordinary fortune attended him. He offered no shining qualities at the first encounter ; he did not offend by superiority. He had a face and manner which disarmed suspicion, which inspired confidence, which confirmed good will. He was a man without vices. He had a strong sense of duty, which it was very easy for him to obey. Then, he had what farmers call a long head ; was excellent in working out the sum for him-self; in arguing his case and convincing you fairly and firmly. Then, it turned out that he was a great worker ; had prodigious faculty of performance ; worked easily. A good worker is so rare ; everybody has some disabling quality. In a host of young men that start together and promise so many brilliant leaders for the next age, each fails on trial ; one by bad health, one by conceit, or by love of pleasure, or lethargy, or an ugly temper, - each has some disqualifying fault that throws him out of the career. But this man was sound to the core, cheerful, persistent, all right for labor, and liked nothing so well.

Then, he had a vast good nature, which made him tolerant and accessible to all ; fair-minded, leaning to the claim of the petitioner ; affable, and not sensible to the affliction which the innumerable visits paid to him when President would have brought to any one else.' And how this good nature became a noble humanity, in many a tragic case which the events of the war brought to him, every one will remember; and with what increasing tenderness he dealt when a whole race was thrown on his compassion. The poor negro said of him, on an impressive occasion, " Massa Linkum am eberywhere."
Then his broad good humor, running easily into jocular talk, in which he delighted and in which he excelled, was a rich gift to this wise man. It enabled him to keep his secret; to meet every kind of man and every rank in society ; to take off the edge of the severest decisions ; to mask his own purpose and sound his companion ; and to catch with true instinct the temper of every company he addressed. And, more than all, it is to a man of severe labor, in anxious and exhausting crises, the natural restorative, good as sleep, and is the protection of the overdriven brain against rancor and in-sanity.

He is the author of a multitude of good sayings, so disguised as pleasantries that it is certain they had no reputation at first but as jests ; and only later, by the very acceptance and adoption they find in the mouths of millions, turn out to be the wisdom of the hour. I am sure if this man had ruled in a period of less facility of printing, he would have become mythological in a very few years, like Æsop or Pilpay, or one of the Seven Wise Masters, by his fables and proverbs. But the weight and penetration of many passages in his letters, messages and speeches, hidden now by the very closeness of their application to the moment, are destined hereafter to wide fame. What pregnant definitions ; what unerring common sense ; what fore-sight ; and, on great occasion, what lofty, and more than national, what humane tone ! His brief speech at Gettysburg will not easily be surpassed by words on any recorded occasion. This, and one other American speech, that of John Brown to the court that tried him, and a part of Kossuth's speech at Birmingham, can only be compared with each other, and with no fourth.

His occupying the chair of state was a triumph of the good sense of mankind, and of the public conscience. This middle-class country had got a middle-class president, at last. Yes, in manners and sympathies, but not in powers, for his powers were superior. This man grew according to the need. His mind mastered the problem of the day ; and as the problem grew, so did his comprehension of it. Rarely was man so fitted to the event. In the midst of fears and jealousies, in the Babel of counsels and parties, this man wrought incessantly with all his might and all his honesty, laboring to find what the people wanted, and how to obtain that. It cannot be said there is any exaggeration of his worth. If ever a man was fairly tested, he was. There was no lack of resistance, nor of slander, nor of ridicule. The times have allowed no state secrets ; the nation has been in such ferment, such multitudes had to be trusted, that no secret could be kept. Every door was ajar, and we know all that be-fell.

Then, what an occasion was the whirlwind of the war. Here was place for no holiday magistrate, no fair-weather sailor ; the new pilot was hurried to the helm in a tornado. In four years, - four years of battle-days, - his endurance, his fertility of resources, his magnanimity, were sorely tried and never found wanting. There, by his courage, his justice, his even temper, his fertile counsel, his humanity, he stood a heroic figure in the centre of a heroic epoch. He is the true history of the American people in his time. Step by step he walked before them ; slow with their slowness, quickening his march by theirs, the true representative of this continent ; an entirely public man ; father of his country, the pulse of twenty millions throbbing in his heart, the thought of their minds articulated by his tongue.

Adam Smith remarks that the axe, which in Houbraken's portraits of British kings and worthies is engraved under those who have suffered at the block, adds a certain lofty charm to the picture. And who does not see, even in this tragedy so recent, how fast the terror and ruin of the massacre are already burning into glory around the victim ? Far happier this fate than to have lived to be wished away ; to have watched the decay of his own faculties ; to have seen - perhaps even he - the proverbial ingratitude of statesmen; to have seen mean men preferred. Had he not lived long enough to keep the greatest promise that ever man made to his fellow men, - the practical abolition of slavery ? He had seen Tennessee, Missouri and Maryland emancipate their slaves. He had seen Savannah, Charleston and Richmond surrendered ; had seen the main army of the rebellion lay down its arms. He had conquered the public opinion of Canada, England and France. Only Washington can compare with him in fortune.

And what if it should turn out, in the unfolding of the web, that he had reached the term ; that this heroic deliverer could no longer serve us ; that the rebellion had touched its natural conclusion, and what remained to be done required new and uncommitted hands, - a new spirit born out of the ashes of the war ; and that Heaven, wishing to show the world a completed benefactor, shall make him serve his country even more by his death than by his life ? Nations, like kings, are not good by facility and complaisance. " The kindness of kings consists in justice and strength." Easy good nature has been the dangerous foible of the Republic, and it was necessary that its enemies should outrage it, and drive us to unwonted firmness, to secure the salvation of this country in the next ages.

The ancients believed in a serene and beautiful Genius which ruled in the affairs of nations; which, with a slow but stern justice, carried for-ward the fortunes of certain chosen houses, weeding out single offenders or offending families, and securing at last the firm prosperity of the favorites of Heaven. It was too narrow a view of the Eternal Nemesis. There is a serene Providence which rules the fate of nations, which makes little account of time, little of one generation or race, makes no account of disasters, conquers alike by what is called defeat or by what is called victory, thrusts aside enemy and obstruction, crushes everything immoral as in-human, and obtains the ultimate triumph of the best race by the sacrifice of everything which resists the moral laws of the world.' It makes its own instruments, creates the man for the time, trains him in poverty, inspires his genius, and arms him for his task. It has given every race its own talent, and ordains that only that race which combines perfectly with the virtues of all shall endure.'

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Saturday, December 30, 2006

One year summary.

It was December 29 last year that I started writing this blog. It was at the prompting from a friend that I write about the things that I was researching. Write about the things I was passionate about, to write about innovation in the oil and gas industry. I thank him for pointing out this opportunity to me. I started this blog with several specific objectives in mind;

  1. Discuss the methods of (re)-organization of oil and gas firms, and specifically, replace the hierarchy or bureaucracy with the industry standard Joint Operating Committee (JOC).
  2. Debate and discuss the attributes and elements of innovation within the oil and gas industry.
  3. Explore the impact of today's information technologies, and their role in making energy firms more innovative and accountable.
  4. Discover what is possible and how things could be better.
I am pleased to report that these objectives are being, and will continue to be, met. I am also pleased to report that I have no shortage of material to write about. The basis of this website is my Master's Thesis that proved the joint operating committee is the optimal organization for innovative oil and gas producers. The scale of this revised organizational structure is not small. The re-organization, re-configuration, and re-everything of every element of activity, process, data and approach in oil and gas is affected. I've certainly landed in the middle of a fire storm of controversy, conflict and best of all, value for all concerned.

Reviewing the material that I posted this past year, I noticed a theme that I thought was rather valuable for the industry. That these concepts and material, particularly the new organizations supported by the new information technologies, was being accepted in the larger academic arena. Explicit support was being built for these concepts. I was able to spin these concepts out of this weblog and publish the "Final Research Report." This support alone has significant tangible value for the energy industry. Value in that it documents the many calls to action that are being stated throughout the world for both the energy industry and business community in general.

There is something else I want to point out. That is the value that this weblog represents. I think the oil and gas worker has a central location for discussion and presentation of material that is consistent with the innovative employee / worker, and the technologies impact. These are the main focus of the recent revisions that I've done to the website. I am therefore making this an unexpected, and much valued objective of my writings.

Another area that I am particularly enthusiastic about is the Massachusetts EnerTech Cluster that was recently announced by Dr. Robert Metcalfe. This is based on the desperate need for something of this nature, and is building on the works done by the recent efforts of MIT's. This is necessary, and I would assert should have been done many years ago. I also foresee similar, however more limited, clusters of Energy Information Technologies in both Silicon Valley and Houston. These three locations will be the brain trust of how the energy needs of the future are met.

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Friday, December 22, 2006

MIT President Emeritus on MIT Video

Dr. Charles M. Vest provides an interesting discussion regarding the teaching and developmental challenges that the engineering disciplines will go through in the next 14 years.

At around the 35 minute point, Dr. Vest states their is a parallel to the current issues the energy industry faces, with the issues the auto industry faced in the 1970's. An interesting and accurate analogy.

During the Q and A Dr. Vest makes the point that at a diner with Secretary Rice, regarding the changes at the State Department, Newt Gingrich made it very clear, we have something that was built for a different era, that science and technology in industry have to re-organize to meet the challenges of today.

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Monday, December 18, 2006

Metcalfe's declaration of the Massachusetts Enertech Cluster

Dr. Robert Metcalfe is a major force in the technology world. He is the inventor of Ethernet which is the basic underlying infrastructure of the Internet. Based on Ethernet, Metcalfe founded 3Com which was an integral part of the building of the Internet. A man of great ideas, and a man who has the ability to make those ideas operate in the real world.

Dr. Metcalfe has been affiliated with MIT through out the years, and works with Polaris Partnerships, a venture capital firm he owns, and has recently guest blogged on VCMike's Blog, a silicon valley early stage venture capitalist. Click on the title of this entry to review Metcalfe's ideas.

Metcalfe's ideas are that the greater Boston area holds 10 first class research universities and over 100 universities in total. This is the place that he proposes to house the "Massachusetts Enertech Cluster"(MEC). He proposes the MEC to be modeled on the Silicon Valley Cluster, the area of MEC's focus will be on innovation in oil and gas, and I can not agree with him more.

Metcalfe's interest from a venture capital perspective are listed in this blog entry and include: Ember, Scicortex, and Greenfuel.

"Ember is a networking company that delivers tiny radio semiconductors and protocol software. Ember’s aim is to network all the world’s embedded micro-controllers, of which, according to IDC (another Massachusetts company) there will be 10 billion new ones shipped next year. Ember’s go-to-market focus is home and building control. And what do you think the principal benefits of home and building control are? By wirelessly controlling lights, heating, ventilation, and air conditioning, many of Ember’s early customers are conserving energy. By wirelessly reading meters, many of Ember’s early customers better measure the energy they are saving"
"SiCortex is a computer systems company, so why is it an example of Massachusetts enertech? First, SiCortex has just launched open-source software Linux superclusters that improve by factors of 10 delivered computational performance per dollar, per foot, and, yes, per watt. Because they each consume two factors of 10 fewer watts than the PC microprocessors on our desks, SiCortex fits six 64-bit microprocessors on a chip and therefore 5,832 in a single cabinet, cooled by air, saving energy on running the computers and even more on cooling them. That’s enertech. And second, SiCortex is enertech because its superclusters are designed for high-performance computing applications, prominent among which are seismic data analysis for oil exploration, climate modeling, fluid dynamics, reactor simulations, quantum chromo dynamics — enertech. No wonder the lead in SiCortex’s recent $21M venture financing was Chevron."
"GreenFuel is now working with huge electric power plants in the Arizona desert to scale up its enertech. GreenFuel pipes CO2-laden flue gases through algae slurries circulating in solar bioreactors. GreenFuel algae use photosynthesis in enertech greenhouses to remove greenhouse gases (CO2 and NOx) from the flue gases before release into the atmosphere. And then, get this, the rapidly thickening algal slurry is harvested several times per day to produce lipids, starches, and proteins for extraction into substantial quantities of, respectively, biodiesel, ethanol, and feed. GreenFuel algae-solar bioreactors do require acreage, water, and electricity, but junk land, dirty water, and single-digit percentages of parasitic power. GreenFuel treats CO2 as a valuable plant food and, rather than try to sequester it expensively, GreenFuel recycles CO2, cleaning the atmosphere while producing cheap and clean energy"
Out of these I would particularly like to point out the business of Ember. Building the network for all the worlds embedded network microcontrollers. Metcalfe defines the market as being 10 billion devices that will be shipped in 2007. IPv6 will provide the unique addressing of each of these devices, wirelessly. This is exactly the reason why IPv6 and WiMax reside in my Technical Vision.

This is evidence to me we are entering a world where things are changing quickly. Companies that continue to hold on to old ways of business risk everything. Now is the time for change.

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Thursday, December 14, 2006

The attention economy.

John Hagel III has written a fascinating series of articles on what is being called the "Attention Economy". His comments are located here, here and here. I highly recommend my readers to view these articles thoroughly. Hagel picks up from the quotation of Professor Herbert Simon, Nobel Laureates quote,

" an information-rich world, the wealth of information means a dearth of something else: a scarcity of whatever it is that information consumes. What information consumes is rather obvious: it consumes the attention of its recipients. Hence a wealth of information creates a poverty of attention and a need to allocate that attention efficiently among the overabundance of the information sources that might consume it."
I think that Hagel is picking up where Simon's comment left off and introduces some current research that Michael Goldhaber is doing in this area. Goldhaber's best articles are here, here and here. Attention is not a commodity, in that it is fixed and Hagel discusses both the scope of your own attention and the attention that ideas can garner and sustain. I wanted to comment on the important impact of this thinking and relate the significance of what I think is being said.

For myself I find the demand to keep enhancing my information systems requires daily diligence of what, where and who I spend my attention on. If I am not vigilant I become satisfied with the status quo and that is a dangerous attitude to have these days. There is enough justification and supporting information to ignore and belittle the overall and global changes that are occurring today. Many prefer to refer to their BlackBerry's and consume their lives in the day to day grind of mindless activity. We need to focus our attention on what and where we are going with these technologies. If we loose sight of the road that we are travelling on we could be lost for a sizable amount of time.

An important point of view to maintain is the technology works for me to meet my needs, I do not respond in any way to the demands of the technology. Needless to say I have no BlackBerry and I ensure that at least 80% of my synchronous time is spent in person, with limited amount of time being spent on phone calls. I communicate asynchronously, or at my time, on my schedule and my agenda. Many things fall off the table as a result, and I am best able to prioritize what is necessary.

The other aspect that is important is the speed at which things are viewed. I like to spend as much time as I can per day on reviewing and writing what I am researching about. With three blogs and two major topics it is something that requires a focus that is difficult to sustain. So there are two modes, quick and summary where little is available for immediate recall, yet some of the more important aspects are recalled many days later, or as required. Here is where Google is an invaluable tool in that I am then able to re-find that reference almost immediately. And then there is the reading and reviewing at the pace that is necessary to take notes and assimilate the complex topics that demand my time and efforts. These can take a goodly amount of time, but that time is afforded to me as I know nothing otherwise will be lost.

I frequently look at it from the point of view that Google has provided me with at least 7,000 of the smartest people in the world, working to make my information better. Google also provides me with the supercomputing power necessary to index and make available that information that is the most important to me. Such power in the hands of every user will make the majority of the major issues in the world more solvable. The most surprising element of this tool is that Google is making a billion dollars a quarter doing this. The attention economy operates on a different premise.

So what is it that I am trying to do here. In a nutshell I am trying to create and sustain the necessary attention of my readers to ensure that their time is most effectively spent on reading, sharing and conversing through this blog. There ability to be fully informed through a high quality filter is what I am preparing and providing to them in this blog format. The recent changes that I have made to this blog are designed to increase the value and usability. And include;
  • Use of Labels, as well as Technorati tags, providing my readers with a variety of ways to aggregate items that I and others write about.
  • I installed three custom search engines;
    • Oil and gas custom search reviews the highest quality journals and sites that cover the global oil and gas business. As I find more high quality documents and sites I will add them to that search engine.
    • Innovation search engine reviews the quality documents and sites that I discover and use in my research regarding innovation.
    • Academic search engine that provides the best academic sites available. Oxford, Harvard, MIT, London School of Economics, University of Chicago, Berkely, Princeton, Yale and Stanford to name just a few. Other sites like DSpace and most of the universities that provide their course offerings and videos online.
  • I have installed not only the articles that I read and find of value, but now have included the tag cloud that these articles and tagging provides. Readers are encouraged to fully explore the referenced articles and tags, they are there for your reading enjoyment and to act as a filter to get to the quality stuff first. Please don't hesitate to join my network while visiting.
  • I have also provided 50 of the most recent blog posts and readings that I discover through my RSS reader, Google Reader. These url's can be seen by going to the website where these ideas are hosted. These provide my readers with the best of the best.
  • And finally a financial summary that caters to the oil and gas market activity. And a summary of the Sun Microsystem Aquarium which is where the J2EE server that we will be using is summarized.
If I am able to provide quality reading material and idea generation for my viewing public, focused on innovation in the oil and gas industry globally. With a strong focus of my writing regarding the revolutionary use of the joint operating committee, I think that I am spending my time as effectively as I can. I believe that this enables my readers to focus their attention a little clearer on the issues and opportunities we all face in the oil and gas industry.

I hope you enjoy this as much as I do. As I have mentioned here before, there is no better job in the world from my point of view. I will be writing more on the topic of the attention economy and work hard to focus my readers attention as finely as I can.

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Wednesday, December 13, 2006

Some books I like.

104 Titles of some of the best books that I found.

The Strategy of Conflict
Thomas C. Schelling

Classical and nonclassical logics : an introduction to the mathematics of propositions
Schechter, Eric, 1950-

Winning at collaboration commerce : the next competitive advantage
Collins, Heidi.; Gordon, Cindy.; Terra, Jose Claudio Cyrineu.
August 23, 2005

Computational Economics
David A. Kendrick, P. Ruben Mercado, Hans M. Amman
December 15, 2005

The Constitution of Society: Outline of the Theory of Structuration
Anthony Giddens
January 11, 1986

Execution: The Discipline of Getting Things Done
Larry Bossidy, Ram Charan, Charles Burck
June 15, 2002

Extreme Competition: Innovation And the Great 21st Century Business Reformation
Peter Fingar
January 31, 2006

The fast forward MBA in project management
Verzuh, Eric.

Freakonomics : a rogue economist explores the hidden side of everything
Levitt, Steven D.; Dubner, Stephen J.

The Future of Work: How the New Order of Business Will Shape Your Organization, Your Management Style and Your Life
Thomas W. Malone
April 2, 2004

Matt Ridley
October 3, 2000

Happy Lives and the Highest Good : An Essay on Aristotle's "Nicomachean Ethics"
Gabriel Richardson Lear
January 5, 2004

Human accomplishment : the pursuit of excellence in the arts and sciences, 800 BC to 1950
Murray, Charles A.

Ideas Have Consequences
Richard M. Weaver
September 15, 1984

Income Distribution in Macroeconomic Models
Giuseppe Bertola, Reto Foellmi, Josef Zweimuller
December 1, 2005

Innovation, Organization and Economic Dynamics: Selected Essays
Giovanni Dosi
September 23, 2001

It's About Time : Understanding Einstein's Relativity
N. David Mermin
November 1, 2005

The Java programming language
Arnold, Ken, 1958-; Gosling, James.; Holmes, David (David Colin)

Java: An Eventful Approach
Kim Bruce, Andrea Danyluk, Thomas Murtagh
July 29, 2005

Leading with questions : how leaders find the right solutions by knowing what to ask
Marquardt, Michael J.

Learning the bash Shell
Newham, Cameron.; Rosenblatt, Bill.

Lecture Notes in Microeconomic Theory : The Economic Agent
Ariel Rubinstein
December 16, 2005

Max Plus at work : modeling and analysis of synchronized systems : a course on Max-Plus algebra and its applications
Heidergott, Bernd.; Olsder, Geert Jan.; Woude, J. W. van der.

On Adam Smith's Wealth of nations : a philosophical companion
Fleischacker, Samuel.

The only sustainable edge : why business strategy depends on productive friction and dynamic specialization
Hagel, John.; Brown, John Seely.

Philosophy as a Humanistic Discipline
Bernard Williams, A. W. Moore
January 2, 2006

Politics and Vision : Continuity and Innovation in Western Political Thought
Sheldon S. Wolin
May 3, 2004

The Politics of Good Intentions : History, Fear and Hypocrisy in the New World Order
David Runciman
May 5, 2006

Producing security : multinational corporations, globalization, and the changing calculus of conflict
Brooks, Stephen G., 1971-

Radical evolution : the promise and peril of enhancing our minds, our bodies--and what it means to be human
Garreau, Joel.

The Singularity Is Near : When Humans Transcend Biology
Ray Kurzweil
September 22, 2005

The State of Democratic Theory
Ian Shapiro
August 18, 2003

The Strategy of Conflict
Thomas C. Schelling
June 26, 2003

The Success of Open Source
Steve Weber

Swarm creativity : competitive advantage through collaborative innovation networks
Gloor, Peter A. (Peter Andreas), 1961-

The Theory of Corporate Finance
Jean Tirole
December 15, 2005

Understanding institutional diversity
Ostrom, Elinor.

The West's last chance : will we win the clash of civilizations?
Blankley, Tony.

Wicked cool Java : code bits, open-source libraries, and project ideas
Eubanks, Brian D.

Winning at collaboration commerce : the next competitive advantage
Collins, Heidi.; Gordon, Cindy.; Terra, Jos©♭ Cl©Łudio Cyrineu.

Winning the Knowledge Transfer Race
Michael J. English, William H. Baker
October 25, 2005

The World Is Flat: A Brief History of the Twenty-first Century
Thomas L. Friedman
April 5, 2005

Infrastructure: A Field Guide to the Industrial Landscape
Brian Hayes
September 26, 2005

It's Not What You Say...It's What You Do: How Following Through at Every Level Can Make or Break Your Company
Laurence Houghton, Laurence Haughton
December 28, 2004

Knowledge Accumulation and Industry Evolution : The Case of Pharma-Biotech
Mariana Mazzucato, Giovanni Dosi
March 9, 2006

The Nature and Dynamics of Organizational Capabilities
Giovanni Dosi, Richard R. Nelson, Sidney G. Winter
January 15, 2001

Technology, Organization, and Competitiveness : Perspectives on Industrial and Corporate Change
Giovanni Dosi, David J. Teece, Josef Chytry
May 21, 1998

Technology and Enterprise in Historical Perspective
Giovanni Dosi, Renato Giannetti, Pier Angelo Toninelli
August 1, 1992

The Economics of Technical Change and International Trade
Giovanni Dosi, Keith Pavitt, Luc Soete
March 23, 1991

Technical Change and Economic Theory (Ifias Research Series, Number 6)
Giovanni Dosi
October 23, 1990

Technical Change and Industrial Transformation
Giovanni Dosi
August 23, 1984

Technical change and survival: Europe's semiconductor industry (Industrial adjustment and policy)
Giovanni Dosi
February 23, 1981

Sisomo: The Future on Screen
Kevin Roberts
November 15, 2005

An Army of Davids : How Markets and Technology Empower Ordinary People to Beat Big Media, Big Government, and Other Goliaths
Glenn Reynolds
March 7, 2006

The Prepared Mind of a Leader : Eight Skills Leaders Use to Innovate, Make Decisions, and Solve Problems
Bill Welter, Jean Egmon
October 24, 2005

License to Harass : Law, Hierarchy, and Offensive Public Speech (The Cultural Lives of Law)
Laura Beth Nielsen
August 30, 2004

Plato's Fable : On the Mortal Condition in Shadowy Times (New Forum Books)
Joshua Mitchell
March 3, 2006

China the Balance Sheet: What the World Needs to Know about the Emerging Superpower
Institute for International Economics, Center for Strategic & International Stu
April 10, 2006

A Machine to Make a Future : Biotech Chronicles
Paul Rabinow, Talia Dan-Cohen
April 7, 2006

Dynamic Models in Biology
Stephen P. Ellner, John Guckenheimer
March 31, 2006

Information Science
David G. Luenberger
February 15, 2006

Information Revolution : Using the Information Evolution Model to Grow Your Business
Jim Davis, Gloria E. Miller, Allan Russell
January 9, 2006

Managing in the Next Society
Peter F. Drucker
July 24, 2002

The Long Tail : Why the Future of Business Is Selling Less of More
Chris Anderson
July 11, 2006

A New Kind of Science
Stephen Wolfram
May 14, 2002

The Second Cycle: Winning the War Against Bureaucracy
Lars Kolind
April 24, 2006

Competing on the Edge : Strategy as Structured Chaos
Shona L. Brown, Kathleen M. Eisenhardt
April 15, 1998

The Innovation Killer: How What We Know Limits What We Can Imagine... And What Smart Companies Are Doing About It
Cynthia Barton Rabe
June 30, 2006

A Whole New Mind: Moving from the Information Age to the Conceptual Age
Daniel H. Pink
March 24, 2005

Schumpeter on the Economics of Innovation And the Development of Capitalism
Arnold Heertje, Jan Middendorp
March 24, 2006

Infrastructure: A Field Guide to the Industrial Landscape
Brian Hayes
September 18, 2006

Choice and Consequence
Thomas C. Schelling
April 4, 2006

Micromotives and Macrobehavior (Fels Lectures on Public Policy Analysis)
Thomas C. Schelling
October 23, 1978

Technological Revolutions and Financial Capital: The Dynamics of Bubbles and Golden Ages
Carlota Perez
April 23, 2003

Innovation, Organization and Economic Dynamics: Selected Essays
Giovanni Dosi
September 23, 2001

Evolutionary Economics and Creative Destruction (Graz Schumpeter Lectures, 1)
J. Metcalfe
January 28, 1998

Knowledge, Institutions and Evolution in Economics (The Graz Schumpeter Lectures)
Brian Loasby
September 23, 2002

Schumpeter and the Endogeneity of Technology : Some American Perspectives
N. Rosenberg
June 23, 2000

Joseph Alois Schumpeter
Wolfgang F. Stolper
August 8, 1994

Democracy, Education, and Equality: Graz-Schumpeter Lectures (Econometric Society Monographs)
John E. Roemer
January 9, 2006

Invisible Engines: How Software Platforms Drive Innovation and Transform Industries
David S. Evans, Andrei Hagiu, Richard Schmalensee
October 1, 2006

Twilight in the Desert: The Coming Saudi Oil Shock and the World Economy
Matthew R. Simmons
June 10, 2005

iWoz: From Computer Geek to Cult Icon: How I Invented the Personal Computer, Co-Founded Apple, and Had Fun Doing It
Steve Wozniak, Gina Smith
September 25, 2006

Mavericks at Work: Why the Most Original Minds in Business Win
William C. Taylor, Polly G. LaBarre
October 2, 2006

America Alone: The End of the World as We Know It
Mark Steyn
September 16, 2006

Power, Speed, and Form: Engineers and the Making of the Twentieth Century
David P. Billington, David P. Billington Jr.
October 2, 2006

Painting outside the Lines: Patterns of Creativity in Modern Art
David W. Galenson
January 18, 2002

Old Masters and Young Geniuses: The Two Life Cycles of Artistic Creativity
David W. Galenson
December 27, 2005

Capitalism and Freedom: Fortieth Anniversary Edition
Milton Friedman
November 15, 2002

The Road to Serfdom Fiftieth Anniversary Edition
F. A. Hayek, Milton Friedman
October 15, 1994

The Constitution of Liberty
F. A. Hayek
October 15, 1978

Law, Legislation and Liberty, Volume 1: Rules and Order
F. A. Hayek
February 15, 1978

Law, Legislation and Liberty, Volume 2: The Mirage of Social Justice
F. A. Hayek
October 15, 1978

Law, Legislation and Liberty, Volume 3: The Political Order of a Free People
F. A. Hayek
March 15, 1981

Individualism and Economic Order
F. A. Hayek
June 1, 1996

Capitalism and Freedom: Fortieth Anniversary Edition
Milton Friedman
November 15, 2002

Free to Choose: A Personal Statement
Milton Friedman, Rose Friedman
November 18, 1990

A New Kind of Science
Stephen Wolfram
May 14, 2002

The Emotion Machine: Commonsense Thinking, Artificial Intelligence, and the Future of the Human Mind
Marvin Minsky
November 7, 2006

James G. March
June 5, 1958

Lectures on Economic Growth
Robert E., Jr. Lucas
February 15, 2002

The Attention Economy : Understanding the New Currency of Business
Thomas H. Davenport, John C. Beck
June 6, 2001

Change or Die: How to Transform Your Organization from the Inside Out
M. David Dealy, Andrew R. Thomas
November 30, 2005

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Monday, December 04, 2006

Writing as an art form.

I enjoyed writing what I have called the final research report, it tops out at a little over 23,000 words and is the culmination of many of the ideas and issues regarding the oil and gas industry. One thing that I have learned, and enjoy about the skill of writing, is that generally the author does not know what he / she is writing about until such time as the work is completed in their mind, and they sit down and read it from cover to cover, literally for the first time.

I have experienced this phenomenon before in my writing. I thoroughly enjoy the final reading as there is some almost secret point that has been hidden deep in the subconscious that is being said in the words. I know I will be the first to see what that is, and it will be I who will be the most excited to discover it. This proposal did not disappoint.

The idea that came to the forefront is the copyright itself, and specifically, its application in what would be considered a unique way. The copyright has become a major sticking point with the industry and is deemed by myself to be of extremely high value. The point about ideas is that good ideas take an immense amount of intellectual effort to complete. The copyright is a monopoly granted to the writer for the lifetime of the writer + 70 years after death.

The point that I understood from my writing about the copyright is this. The copyright is far more valuable to industry then it is to me. My desire to keep it in tact and close care of it is also in the best interests of the industry. Why, for 2 reasons for sure, and their may be more, however, what I've learned in the development and writing of this proposal are these:

  1. The level of technical risk that is inherent in these developments is high.
  2. To focus the attention of the industry on the project owned by the copyright holder.
To expand on these concepts a little further, this copyright helps to focus the energy industries efforts on these software developments. For them to spend any money and resources on a pirated software venture would be wasteful and still born from the word go. Companies are not in the business of taking risks and the risks associated with sponsoring a pirated software venture are 100% in this instance.

Therefore industry is left with their resources being pooled to address, and mitigate the technical risks associated with these software developments. A handy benefit for the industry. From my point of view, I have done the industry a big favour by consolidating this intellectual property in one location. I doubt they will share in this opinion, however, it is time to start working together to solve these problems and building these solutions. I hope that they see this too.

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Sunday, November 26, 2006

Another McKinsey survey.

This survey is reported by Dr. Nicholas Carr on his Rough Type web log. (Click on the title of this entry to go there.) Noting that large percentages (61%) of companies in North America are on the verge of adopting SaaS (Software as a Service). Their motivation being, and it is a subtle point, that companies are moving closer to Dr. John Hagel lll's idea that industry will need to restructure as either;

  • Infrastructure Management (Firms like Genesys providing SaaS solutions.)
  • Innovation Management (The key role of the producer (Based on capabilities and oil and gas leases.))
  • Customer Management (The down stream business of refining and marketing.)
As I move to secure some of the residual budget allocation for 2006, I will be highlighting these points to the industry, I only hope they are listing to the volume of people that are speaking to these issues.

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Saturday, October 21, 2006

What is a Petroleum Lease Marketplace?

The final component of the proposal has been edited and the document is now complete.

Up until now we have not discussed what "may" be possible as a result of the organizational changes which are caused by a focus on the joint operating committee. Moving to the Joint Operating Committee (JOC) as an organizational model has an air of being too philosophical or intangible and thus there is a need to have some substance added to this concept. The following is how I see the manner in which this type of system will be developed to meet the needs of the oil and gas industry.

The Mineral Lease and associated agreements define and establish the rights and responsibilities regarding the lands and minerals described within the lease document. Looking at the Marketplace concept, these leases are bought, sold, traded, surrendered and pledged as capital in the oil and gas industry. Each lease provides to the holder the rights to those reserves and any associated production facilities. In short, the entire oil and gas industry "market" can be boiled down to these documents. These documents are the point where the industry and / or producer activity begins. The lease "market" in Calgary does not substantially differ from any other oil and gas marketplace in the world. What this proposed development is attempting to display and encourage is the virtual existence of an oil and gas market. Although initially limited in its geographic scope to the province of Alberta, many of the outgrowths of the system will be global in scale, with only immaterial differences in the reference values of the geographical data elements.

Given that the market for oil and gas leases is very large, the critical nature of this system will need to assume a number of variables that do not exist in their current form. If a producer has a lease that is in jeopardy of being surrendered, then the producer could expose the lease within the virtual Marketplace to determine if there is an interested party that may want to partner or purchase the lease and maintain it. Currently the scope of the offers to do business with the producer is limited to the extent of his or her personal network of interested parties. What if the lease was perusable and searchable by the entire market for a willing buyer? This system is designed to provide this environment to the oil and gas producer.

Taking the analogy of an exchange a little further, consider the possibilities of the Petroleum Lease Marketplace in terms of what this can do for a business. Search and discovery mechanisms could be built in as tools that would enable the producer to optimize the opportunities and hence the value of the lease. Data involving the prospective operation would be codified in the marketplace and the transaction processing would be an enabling capability and an inherent justification of the marketplace. This marketplace would then provide the means to collaborate on the methods of operation around the newly formed partnership. Where a Farmout / in, Joint Venture, Pooling or Construction Ownership & Operatorship agreement is facilitated in codifying the partnership based on the Petroleum Lease Marketplace Module. Adding secondary agreements (Novation, Area of Mutual Interests), Accounting & Operating Procedures as they are formed, agreed to, and counter part executed by the users of the Petroleum Lease Marketplace. This Marketplace will be the beginning of the industries commercial activity, establishing a base of software operations that would provide the producer with A.F.E., budget and operational programs. This system, ultimately, would be designed to facilitate the processing of capital and operating expenditures, revenues and royalties, based on the partnerships of producers needs and wants. This is the system that is being captured and codified in the Petroleum Lease Marketplace.

I have documented elsewhere the unique nature of partnership accounting for oil and gas. The business dynamics of each producer are so fundamentally different in terms of financial metrics and motivations. I have also described how the Partnership Accounting system mirrors the organizations needs. If two groups are partners and one owns the midstream assets that it in turn rents to provide access to these facilities to the other partners, the criteria for measuring and comparing results are different from producer to producer but the data is the same, only perceived differently. This is one of the fundamental aspects of Relational theory and is a tacit underlying theme in Java. Critical to the understanding of this system is that the metrics of each producer in a property are different and are directly related to each producer’s strategy and organizational capability. The difficulty in the partnership knowing the specifics of each producer’s motivations are unknown and not relevant to each of the other producers. The common interest that drives each producer is in harmony, as they are all driven financially to succeed. There is no conflict of interest because the motivation is consistent throughout the marketplace irrespective of the competing strategies employed by the different partners. And these unique features are relevant and evident to each producer in this system.

The Alberta Petroleum Lease Market.

The PLM is a database of the Petroleum & Natural Gas Leases for the land governed by the state, province or lessor. The lease, or concession, entitles the holder to the mineral rights and is the start of the process of exploring and drilling for oil and gas. This is therefore the natural place to start these software developments.

The lease documents are populated into the database to represent the mineral rights for the region. The population contained within the database would be those that are under lease, being posted, auctions and prospective lands. The level of detail of information queried and available by an authorized user is recorded and controlled by the system. The ability to then buy, sell trade or surrender these leases would be possible through a variety of transactions managed by the system. Or, in other words, a Marketplace is formed with its own community.

From here the derivative works of the Farm-in, Farm-out, Novation, Joint Operating Agreement and / or Construction Ownership and Operator-ship could be developed through the collaborative environment of the PLM. Additional documentation such as the operating and accounting procedures would be available to be negotiated, documented and counter part executed electronically in this collaborative environment.

The PLM would be a virtual portal that gives the producer, investor or employee access to the Lease, agreements and its associated history. It would literally be the area where people would log in via the Human Resource Marketplace in order to go to work. Having both a Private and Public interfaces to the data elements and functionality, a producer who has an interest in a certain area would be able to engage the owners of any lease of interest, on future business opportunities and from there, pursue subsequent operations extending the operations management, accounting and administration function. The marketplace is a place where the people will go to do business.

Employees and contractors could actively contact producers and investors to offer and provide their services to work as consultants in the day to day activity of the lease, or contract for drilling rigs etc. Adding additional software developments to manage the approval of AFE's, Mail-Ballots, Contracts, Statements of Operations, and Statements of Expenditures and ultimately providing a high level of on-line commerce.

All of these operations are derived through the Joint Operating Committee (JOC). As was mentioned in the preliminary research document the JOC is, the financial, legal, cultural and operational decision making framework of the oil and gas industry. Why not move the accountability for those decisions over to the JOC? This conceptual alignment has received immense tacit support by most of the people who are employed in the oil and gas industry.

The accountability is currently managed by the hierarchy because that is the only logical manner in which an organization could control their assets during the past 100 years. Now with the Information Technologies available for "Collaborative Commerce" (Harvard's term) the hierarchy is not necessary for the purposes of 21st century operation, particularly in oil and gas.

Another key point is the methods by which the energy industry would pay for these transactions. The producers would need to subscribe to the system and pay a nominal fee for each transaction. Or, alternatively an assessment can be made on each producer based on the number of barrels of oil per day it produced. Assessing $1 per barrel of annual production would cost a firm such as Encana to access the system approximately $700,000 per year. I can assure you that no employee or individual would ever have to pay for access to the system. The oil and gas industry revenue is in excess of $2 trillion. The employee's use is almost guaranteed due to the fact that the alternative is to work the prospective 80 hours or more that their jobs would take through the traditional hierarchical methods available today. This is the definition of Web Services and accurately reflects the threat of how things may be developed in the near future. Users are key and their productivity is the focus of their, and the software development, efforts. A capable software developer is critical to achieving these results. This proposal exposes the opportunity for the industry to build this software.

For the sake of clarity, the information within this module appears complex and an attempt to accurately reflect "what" and "how" this operates is my purpose. So, in summary, the PLM is a market to buy, sell, market, trade, assign. novate, post, bid, surrender, a working / royalty interest. Facilitating the electronic capture, management, secure and authorized access to the documentation regarding joint ventures, assignments, novations, sales, AMI's, of working / royalty interests. And establishment of joint operating committees - CAPL, PASC operating and accounting procedures, caveat registration, assignment of committee members, their roles, their responsibilities, delegations of authority, programs budgets, A.F.E.'s, Mail Ballots, Amendments etc.

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Monday, October 16, 2006

A different approach.

It could be argued that the focus of this research is a software product that falls within the classification of vaporware. And it does. However I would put some spin on the classic definition of vaporware and call this a clean slate approach to oil and gas systems. The category that this "product" is in is difficult to define and therefore difficult to build without the express support of the oil and gas industry. This final research report is an attempt at communicating these concepts far and wide within the oil and gas industry in an attempt to find an audience. The strength of the concept of using the Joint Operating Committee requires that every data element, every relationship, and every process be revisited and rewritten. New modules and marketplaces will be built to eliminate the old software classifications.

I am attempting to articulate a vision of what a new approach could do in the systems area. It certainly is vaporware as no group or company has ever approached the joint operating committee as the central organizational focus. How can I, as one individual, do all this work in order to make a viable system exclusively for the producers? The clean slate approach has to be communicated in a way that the system could and should be built in order to accurately describe its features.

I have identified several points that present future difficulties in oil and gas systems. Partnership Accounting, Human Resource Marketplace module, Petroleum Lease Marketplace module and the Genesys Technical Vision are the foundation of this final research report and are unaddressed by the competition. All these aspects of future software systems have to be addressed and neither SAP, Oracle or IBM have a solution or vision that is as compelling as shown in this research report.

To be more specific, the perspective of using the joint operating committee brings new and better ways of managing an oil and gas enterprise. From a systems point of view oil and gas has ignored and avoided the joint operating committee as it conflicts with the underlying purpose of the bureaucracy. Significant contradictions and conflict have crept into the oil and gas producers’ operations that results in the Joint Operating Committee being precluded from the systems used.

This project was originally proposed to the industry in 2004 as an $85 million software development project. The producer must ask itself,: isn't it more appropriate to keep your options open ? What if SAP and Oracle continue with their current offerings; will those be adequate in the future? A future with IPv6 capability? A further question that needs to be asked, and based on the work of John Hagle III and John Seely Brown, is : Are the proposed industry stratifications changing to be reflected as either innovation management, infrastructure management or customer management?
Is there an expectation or belief that the bureaucracy and its use of last century’s technologies can hold a candle to this vision? These technologies and the forces of change in all areas of the economy have to be addressed. Oil prices are up almost 300% will result in the reallocation of financial resources to support innovation. Organizations are constrained in their speed and innovativeness due to the bureaucracy and its refusal to accept the joint operating committee as the explicit form of organization. Constraints in human resources, field capacities and speed to market are real issues that jeopardize the industry.

We have consistently seen successful companies that were able to integrate technology into their strategy and form strong competitive advantages. A company such as HSBC. Homogenization on SAP is not a competitive strategy. I have now counted 12 calls to action from Harvard, Oxford Analytica, MIT, McKinsey, John Hagel III and John Seely Brown, Secretary Bodman, SEC Chairman Christopher Cox and a variety of others. Add to these calls the demands of the consumers. The time to act and put these software developments into play is now.

Ray Lane is a partner at Kleiner, Perkins, Caufield & Byers and a former president of Oracle Corporation. He knows what he is talking about. This entry will take you to a Business Week article that documents many important points. Two of these points I want to discuss in this entry, they are:

"The traditional method of selling big corporate software applications as multi million-dollar packages that take years to implement is broken."

"The 70% of startups out there that are trying to do what the big companies do, only better, faster and cheaper - it's a fools errand. The customers would like to buy that from a large company, so they’re going to lose out." Ray Lane

Surprisingly, perhaps, I think he is right on both counts. The large multi year, multi million dollar packages are the dinosaurs of the software world. Even Petro Canada tried to implement SAP and after $14 million gave up. It’s fallacious to try to retrofit the company to the software.

On the second point of Ray Lane's, stating that the startups will fail, is something that I struggled with at the beginning of this process and something that I think I can also prove is not valid in the oil and gas sector. The two points that I would assert in my defense is that I am the copyright owner of the methods and processes discussed in this research, and in the preliminary report. I published my thesis in May 2004. I have tangible evidence that the state of the art thinking was not as advanced as what I proposed in September 2003, and earned in the publication of the Plurality document.

Back in 2003 I concluded that the software vendors could consume themselves competing with new offerings and no one would have been able to secure a competitive hold in the market. The only manner in which to establish a competitive offering, I felt, was to own the intellectual property as the key competitive advantage. The copyright, and other forms of intellectual property are the only sources of value in this new age.

Secondly, if anyone thinks that a large vendor is going to be able to write the code for the Partnership Accounting, Human Resource Marketplace, Security, Petroleum Lease Marketplace module that I have spoken about in this report I think they would be mistaken in their expectations. What is needed is a clean slate approach and the heavy involvement of potential and future users. The day and age when the software innovations were brought to the industry’s door through the cottage software industry has ceased. The involvement of the industry in its software development needs is mandatory, and become an inherent capability

So on that basis I would agree and disagree with Mr. Lane. Intellectual property is the only method of securing any kind or competitive advantage in this new day and age. Those that attempt to build systems without their differentiation being codified and protected are in my opinion wasting their time. What is required to compete with this software is some fundamentally different basis of organizational structure for the software to define and support just as I have outlined here.

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Friday, October 13, 2006

Application Architecture: Appendix

The two hardware vendors that will provide the development environment are Sun Microsystems and Apple Computer. The following are some of the tools and products that will be incorporated into this solution.

The primary operating system will be Solaris.
The primary database for both development and deployment will be Ingress.
The tools used will be the Sun Microsystems family of open source Integrated Development Environments (IDE's). Consisting of Netbeans, Sun Studio Creator and Sun Studio Enterprise.
The build tool will be Maven 2.0 or better.
The repository will be Subversion.
Java v5.0 or greater will be the programming environment.
Java Swing and Java Web Start will be the default and only interface.

This application will operate as a "Software as a Service" (SaaS) that will be hosted on a number of geographical grids provided by Sun Microsystems. No hosting of this application will be done locally, but only through the grid offerings of the major tier one original equipment manufacturers, primarily Sun.

Java is the base programming environment. The reasons for the Java selection are its inherently strong security model, broad industry support and modern underlying technologies. It has been assessed as the most effective language to develop a comprehensive transaction oriented system such as this. Within Java, the Enterprise server that we have chosen is Sun Microsystems GlassFish open source offering. This is the first server to be certified based on Java V 5.0 and has the full backing of Sun Microsystems and the open source communities. Java also contains the Mobility Environment, which deals with the programming environment on cell phones pagers, and other devices that this proposal sees as becoming both prolific and ubiquitous. In the oil and gas industry the ability to monitor and control any and all of these devices will become mandatory and this is where Java has had substantial success with well over 1 Billion installed Mobility Environments.

As the technology vision denotes, IPv6 is a cornerstone of the Genesys application. This therefore will be secured through the grid provider.

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Thursday, October 12, 2006

Free like a puppy.

In this section I will describe the benefits in terms of free or open source software. Genesys as an application will be made available to be downloaded, reviewed, inspected and tested but not compiled into an application. The only fully compiled application will be the one all the users will access via the Sun Microsystems operated network and grid. It is critical to the producers that they have this free access to the code upon which they are operating their firm. The ability to freely verify the software code is unlimited. Industry needs a software capability that is as transparent as possible. As the licensee of the application, Genesys, will have the rights to publish the code in this manner. What is suggested is not that dissimilar to what Sun Microsystems does with their software offerings. It is an objective of this proposal that the code of the operating systems, database and specific application available to be inspected by anyone. This will not encumber the copyright of the software as no one will be licensed to run the actual application.

The best way I can think to describe how I expect the code to develop is it is free, not as in price, but like a puppy that is following its own thoughts and direction, a direction that is under the control of its users. A direction that everyone involved in oil and gas has stake in, but no specific individual or group has control of.

Harvard Professor Jeffery Sachs made an interesting point in the PBS Series "The Commanding Heights" by Dr. Daniel Yergin . Throughout the six hours of video, Professor Sachs was consistently called upon to identify and resolve the economic issues of individual countries. Bolivia, Russia and Poland were three of the governments that Sachs consulted with. In each case it became quite obvious that the solution was unique and therefore had a specifically crafted solution. Not a solution that would be assumed to be appropriate for each and every country, but a "custom" designed method of dealing with the countries issues. I draw an analogy to this "custom" oil and gas solution to note that the unique attributes of the energy industry need to be captured and resolved.

These unique oil and gas attributes (the joint operating committee) are not recognized or considered in SAP, Oracle or IBM. These oil and gas applications therefore preclude their respective vendors from the opportunity to ever provide a solution that might be considered adequate. Their basic designs were to provide the original equipment manufacturers and supply chains with a solution.

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Wednesday, October 11, 2006

Human Resource Marketplace

More editing.

The Human Resource Marketplace is derived from the software's prospective user base of eligible oil and gas workers. Its purpose is to provide global access to the human resources the oil and gas industry needs to conduct its operations. Organizing the volumes of people and making them readily accessible by other users from interested producers and joint operating committee's. The Human Resource Marketplace will be a free resource for its users and is part of the overall system that will be financially supported by the oil and gas industry.

The population of these software users will include the full scope of the professions, trades and skill set found in the industry, and its suppliers, regulators and governments around the world. These users are the critical resource to the success of this system and the oil and gas industry. They are the driving force in defining and demanding the types and quality of software applications they need to operate effectively in the oil and gas industry.

As has been stated elsewhere, the ability to access the necessary human resources is a challenge for the energy industry. This challenge is expected to increase as the brain trust of the industry begins their retirement. Industry already is taxing the maximum amounts of employee time and is actively competing on the basis of lifestyle benefits to acquire and maintain talent. This proposal assumes that industry agrees with this author's opinion that people want to be more effective at their jobs. Enhanced employee effectiveness is best achieved through higher productivity and this proposal shares these concerns of industry and its employees. I am boldly suggesting here that the condition of employee effectiveness begins with the effective reorganization with these objectives in mind. The process of creating more creative, productive and innovative oil and gas workers needs to be planned and implemented through this software development proposal.

What this proposal offers industry is a software development capability. An ERP software development capability that sources its application development's leadership, direction and functionality from its user's involvement and demands. It is these users who will demand and expect the necessary software applications be crafted and built from the developers employed by Genesys. Creating a virtual environment where developers and users collaborate. Building a new generation of software systems based on the reorganization of the industry around the Joint Operating Committee.

The Human Resource Marketplace user's interface will be their gateway to completing their task's, fulfilling their roles and responsibilities to the Joint Operating Committee's that actively hire and engage their skills. Each user will have free and unlimited access to the Human Resource Module to manage the:

  • Marketing of their skills.
  • Day to day interactions with other users.
  • Managing and completing their work.
  • Accounting, billing and banking services.
  • Work orders and contracting with producers.
All access will be controlled by a high quality security system that ensures access to the system is by authorized users only. It will ensures all access is accredited and verified as to their accessibility. Included in this verification will be:
  • Educational transcripts.
  • Verified and supported employment references and documentation of their Curriculum Vitae.
  • General ranking and task capability. (See section on Military Command.)
Once accredited it will be up to the user to maintain their on-line presence and work environment. Representatives of the producers will have access to source their employee needs through the Petroleum Lease Marketplace module and or Partnership Accounting described elsewhere. It should be evident that this module is conceived as the major point of contact for the user working in the oil and gas industry. All the primary transaction and document access, creation and processing is done, from the user's point of view, through this portal.

Specific technical attributes of the Human Resource Marketplace module.

This application will manage the Genesys domain name for users based on "". This will be the manner in which people access their work and tasks, eliminating the need "to drive to the office". This portability of the user creates issues regarding the level of automation adopted by industry. Manual processes will be limited in the virtual world, primarily due to the need to present data to many different users simultaneously. Efforts through this application need to be focused on this point. If a firm requires paper pushing employees in the future, they will have no competitively sustainable business, and potentially no business partners. Nonetheless to help with this transformation of the working environment, Google's Tessaract OCR (Optical Character Recognition) engine will be embedded within this application.

Each user, producer and joint operating committee will have access through their specific portal (Human Resource Marketplace, Petroleum Lease Marketplace and / or Partnership Accounting modules). Therefore security at the portal has to be of the highest grade and quality possible, has to capture these needs and most importantly the security module needs to be built first. To layer in a management security requirement after the system has been built will prove fruitless. The security module specifications and possibilities that exist today are such that the type of security level that can be achieved will be more then adequate for the needs described here. As this system will also be operated on Sun Microsystems grid, a higher level of security is achieved and provided. Security is the first priority for this system.

The Human Resource Marketplace will provide:
  • Modules for marketing their products and services. These will consist of blogs and Wiki access for each user to actively promote and market their skills and services to the full range of producers as represented in the joint operating committees, service providers and employers.
  • Access to community based Wiki. (Specific areas for Accounting, Geology, Engineering, and Land etc.) Including glossaries, dictionaries and other reference material pertinent to the oil and gas industry.
  • In the military command section of this proposal there is discussion surrounding how the command and control of the hierarchy is replaced. The command and control issue is resolved by adopting a military command type of structure. The rank and role that an individual will have with respect to its client producers and assigned joint operating committees that make up the users "place of employment".
  • Search module access (Google appliance) within the user's authorized domain.
  • Project management module consisting of a variety of project management, calendar and task management.
  • An RSS pool / reader.
In short, a social network for the oil and gas industry worker to access and manage the work they are doing. It may appear that the service will take on a "MySpace" type of atmosphere and that would be incorrect. The purpose of this environment is that the presentation to the other users is based on your professional life, not just a social aggregator.

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Tuesday, October 10, 2006

Security Model / Module.

And more back from the editor.

Security Module

This module concerns all user access to any and all markets / modules contained within all of Genesys. The important element of this discussion is the methods, procedures and types of security provided here will be the first order of business in the development of this software. Clearly identifying and implementing the highest level of security is the objective and this can not be implemented after the fact or after any of the software is developed.

Therefore, in summary, security includes:

- Elliptical encryption technology via Solaris on all communications. ( )

- Sun Solaris has now released their "ZFS" file system providing historical and 128 bit file storage. ( ). The benefits of using Solaris is that it provides new and critically needed tools for the general user community. "With ZFS, Sun addresses the important issues of integrity and security, stability, and difficulty of administration". With 128 bit addressing there is no limit on the amount of files the system can address. With the global scope of this application, and mission critical nature, it is necessary to have this level of capability.

- Single Sign On (SSO).
- Global access on all public and private networks.
- UserID, Password, Authentication and smart card.

- Encryption and signing keys for documents and transactions are separate from those that are provided for access and security.

- Contacts - LDAP access to all registered users located throughout the world.

IPv6's inherent security model that provides IPsec, the protocol for IP network-layer encryption and authentication.

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Is the Joint Operating Committee Revolutionary?

And more from the editor.

Is the joint operating committee organization focus revolutionary?

Unequivocally Yes.

Using the definition provided by NASA scientist Dr. Robert Casanova, (Click on the title.)

"Revolutionary paradigm shifts are simple, elegant, majestic, beautiful and are characterized by order and symmetry.”
The comments that I have received personally regarding the value of the concept consist of the "well of course" type. People realize immediately the value of the concept. Over time their thinking moves them to make comments like "this solves the majority of the administrative issues in oil and gas." Or "It's an entirely new discipline." On the strength of the concept the rewriting of the entire energy industries software to a more efficient paradigm is possible. Every data element, relationship or process is affected by this change.

I think this concept is revolutionary, and here is why. I can see each element of Dr. Casanova's description of revolution in the overall concept of using the joint operating committee as the organizational construct. It also dovetails well with the current technology offerings, is consistent with many people's technological visions and a variety of academic theories. It is simple; it could solve many difficulties in oil and gas, and provides a natural element of both order and symmetry. My vision of the ease of how the solution gets built in terms of functionality, logic and process reflects this simplicity.

In oil and gas there are many legal documents that support and define the Joint Operating Committee and these have been in place since the beginning of the industry. Industry associations, codified processes, documents, and the many legal agreements form the legal foundation of the industry. The strength of these documents and procedures form the culture of the industry and establish normal and acceptable practices of operation, decision making, financial accounting and reporting. This is global in scope and systemic throughout the energy industry.

The area where the joint operating committee fails is in the accountability framework. This has long been the domain of the hierarchy. And now the hierarchy is failing in providing the shareholders with adequate and effective controls. This has become such a problem that the U.S. congress has implemented Sarbanes Oxley to provide the assurances the shareholders need. Clearly Sarbanes Oxley is not working well and provides little comfort to the shareholders at large. Form my point of view the legislation has done little outside of reinforcing the entrenched bureaucracy.

What would happen then if the tax, SEC, FASB and Sarbanes Oxley accountability's moved to the joint operating committee? Would there be a greater alignment between the decisions being made? Yes, most definitely. When accountability is separated from operational decision making, difficulties occur and are presented. There is no one responsible for the bad decisions and no one can trace the good decisions to their source. After a period of time people begin to realize the time and effort necessary to make a difference is not worth it and very quickly stop trying. Not the proper attitude of an innovative producer.

It is my belief that the development of this system will enable the industry move further and faster. Innovation is the driving force behind this final research report and proposal and the industry is the primary beneficiary.

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Monday, October 09, 2006

Tacit organizations and creation nets.

More from the editor.

McKinsey Consulting, John Hagel III and John Seely Brown have published a series of articles which touch on "Creation Nets" and "Tacit Organizations". This is a summary of the articles as they apply to this research proposal. Much of what is said is a direct call to action and I have selected this article to stand on its own with respect to how the industry could and should be re-organized.

"Tacit interactions are becoming central to economic activity. Making those who undertake them more effective isn't like tweaking a production line."
This article states that tacit interactions, consisting of collaborative and complex problem solving, are the primary means of future economic value. The majority of these interactions are found in western-based economies and are conducted by those that earn higher salaries. The article goes on to say;
"During the next decade, companies that make these activities - and the employees most involved in them - more productive will not only raise the top and bottom lines but also build talent based competitive advantages that rivals will find hard to match."
"But building these advantages won't be easy: companies must alter the way they craft strategies, design organizations, manage talent and leverage technology."
Today the technology exists to collaborate at a basic level. In the next ten years the development of collaborative applications will enable those firms that choose to increase these tacit interactions, with "competitive advantages that rivals will find hard to match."

McKinsey goes on to better define what is meant by tacit interactions noting "the searching, coordinating and monitoring activities required to exchange goods, services and information". The developed economies are finding the volume of tacit interactions are growing faster than in any other category or job description. Increasing to the point where they are taking up almost half of the resources in certain industries. The developing world is not far behind and has opportunities that could match the developed worlds pace in a very short period of time.

Automation of the business process, or transactional activities, does not augment the performance of tacit interactions. How a firm may increase those tacit interactions and increase performance is not well known or defined at this point.
"But that must now change. Executives will have to learn to innovate, and manage in era when tacit interactions dominate and drive performance."
Facilitating the opportunity for people within your organization to increase tacit interactions requires the management to provide the tools for people to do their jobs. In oil and gas, I would suggest that direct participation of all members of the joint operating committee, collaborating in a virtual environment is a part of the Genesys application being developed. Each engineer, geologist, administrator and developer are there to represent their companies' interest in the area. Collectively the groups are able to collaborate and have the software support their thinking and decisions with tools that handle the business end of these interactions. For example, if it is determined that a sand frac is to be used on the well the following processes would be invoked:
  • the contracting firm is chosen
  • a purchase order is created
  • a contract is made
  • the invoicing and payment for those services are completed
These are all as a result of the decisions made by the joint operating committee (JOC). This frees employees to conduct a greater volume of tacit interactions and innovations that are necessary to meet the market demands for energy.
"Workers engage in a larger number of higher quality tacit interactions when organizational boundaries (such as hierarchies and silos) don't get in the way, when people trust each other and have the confidence to organize themselves, and when they have the tools to make better decisions and communicate quickly and easily."
McKinsey has conducted a survey of 8,000 companies and determined that certain sectors had higher levels of tacit interactions. Within each industry the number of tacit interactions was widely variable and appears to have a direct correlation to the overall performance of the firm! McKinsey goes on to say;
"The need to move forward is both substantial and urgent."
High levels of tacit interactions were consistently shown to have built substantial competitive advantages. These advantages were difficult to be replicated by competitors as their "power lies in the collective company specific knowledge that emerges over time."

McKinsey goes on further to state that these require a;
"New Management Science"
"Require changes in every facet of business, from hatching strategies, to organization, to managing talent, and leveraging IT."
The Genesys systems will be developed with the joint operating committee as the organizational construct and focus. This will enable high levels of tacit interactions and collaboration throughout the enterprise, the partnership in which the JOC is represented, the industry as a whole and the individual professional groups.

Consistent with the need to revisit all aspects of the firm, McKinsey believes the role and purpose of strategy and its development take on a higher importance than they once did. This becomes the critical task of senior management to provide the overall scope of interactions and their derivative innovations. This implies that innovations occur at the front lines of the business, not in the management ranks. The means that companies use to enhance the volume and value of tacit interactions is captured in the following;
"Tacit interactions reduce the importance of structure and elevate the importance of people and collaboration. Some of these changes are already underway. In many companies people now come together in project teams, address an issue, and disassemble to start the process again by joining other informal teams. In fact this approach is common in certain professional services and engineering firms, so their organizational charts rarely reflect what is really happening in them. Hierarchy busting has been a theme in the business press for years, but the pace of change has been slow and its effectiveness questionable."
The technology that companies will need to employ is fundamentally different from those used today. In addition to the enhanced communications, these technologies needs to be brought into context for the next ten years that McKinsey suggests these changes will occur. This proposal provides a technical vision that is necessary for these interactions to grow in unpredictable ways. Key will be the asynchronous process management and its ability to mirror the unpredictability of events as they occur.

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