We have now ended what is the financial season in oil and gas. A time when the past years performance is reviewed, the years budgets are approved, audits are conducted, the annual report is issued to shareholders and the annual general meeting has been taken care of. So what’s the plan for the natural gas prices in terms of removing the marginal production off of the marketplace. Or alternatively, how will the bureaucracy deal with the losses that were incurred on the natural gas side of the business. We had calculated that the Preliminary Specification would contribute $67 billion in additional profits in 2012 if it were operational. Most of this was from natural gas pricing. So what’s the plan to stem the loss of this value in 2013. Anyone, Anyone.
Once again the bureaucracy has no plan. It is proposed however, that Christmas 2013 will be very cold and other delusions. How is this a business. Its not its daycare where the bureaucracy receive a warm office, a salary, retirement and other benefits while they participate. Without any challenge to the existing status quo you can be sure there will be no activity that is undertaken to change the afternoon nap. Another year will pass much like last year and hope will rise with the inevitable rising natural gas prices as the temperatures dip in November. It’s the bureaucrats perfect dream.
The only problem of course is the inevitable downturn in prices that begin around this time of the year and continue on until November. This is where the majority of the money is lost during the year. And the remainder of the year's operations are not good enough to earn any money either so they can’t alleviate these losses. Losing money is nothing to a bureaucrat. There is always more capital that can be found if needed to keep the daycare afloat. If not, there are other daycares in which to participate.
What is needed is the adoption of People, Ideas & Objects Preliminary Specification. Through a variety of interfaces the partnership representing the Joint Operating Committee is able to make the operational decision to suspend production when it reaches its marginal costs. Therefore mitigating the downside losses of any operations due to low natural gas prices. These losses are mitigated due to the fact that no production or overhead expenses are incurred during times when the production is shut-in. This is done through the Preliminary Specifications use of the decentralized production model.
What the decentralized production model does is reduce the producer to a small footprint of their current operations. Consisting of the C class executives, earth science and engineering resources, some support staff and legal resources. The remainder of the resources are reorganized into service providers who are organized around processes that have the entire industry as their client base. These service providers conduct their operations for their clients and bill for their services directly to the Joint Operating Committee. So for royalties there will be a charge for royalties and a charge for the royalty accounting directly to the Joint Operating Committee.
This provides the opportunity for the producer, should they decide to shut-in the marginal property, to not incur, in this instance, the royalty or the royalty accounting charges for the months when the property is shut-in. And that would be the case for any of the other overhead items that are being managed by the service providers. No production, no production or overhead charges and hence no losses on operations and the natural gas prices will have limited downside during the summer or other times when the market is well supplied.
In short a plan to deal with the nature of the natural gas business. One in which we need to adopt the Preliminary Specification as the method of operations for the oil and gas industry. The Preliminary Specification provides the oil and gas producer with the most profitable 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.