Priority One in North American Oil and Gas

 Is it possible the bureaucrats have taken the advice inherent in the Preliminary Specification to heart? Accepting oil and gas commodities are economic price makers and that North American producers' chronic overproduction has caused these prices to collapse over the past number of decades. Have they now determined that this may be the key to a new level of prosperity for them if they were to adopt their own price maker mechanism in some form as their strategy? What I stated in Tuesday’s blog post is valid and understandable by most people, “you can’t get blood from a rock.” Which is possibly the most common saying but there’s many others. No one’s interested, unless they occupy that obscure group known as auditors, in metaphorically kicking dead horses. With signs of life being evident in the price of oil and gas. I would have to say that it’s primarily driven by a renewed belief that clean energy is not going to carry the freight and we’ve all maybe misunderstood, as consumers, the real value of oil and gas. The Texas snow storm was the beginning of this realization. California is always a leader in such things and Europe, who has been one of the largest proponents of clean energy these past decades, are each experiencing their folly and consequences of their prior bad decisions. And it’s only September. I’ve quoted this specific quote of Winston Churchill’s a number of times before. It may be appropriate to review it again.

In Churchill’s speech we may be reminded of certain human characteristics which have not changed after all these years: “There is nothing new in the story….It falls into that long, dismal catalogue of the fruitlessness of experience and the confirmed unteachability of mankind. Want of foresight, unwillingness to act when action would be simple and effective, lack of clear thinking, confusion of counsel until the emergency comes, until self-preservation strikes its jarring gong—these are the features which constitute the endless repetition of history.”

The more important point to make is that instead of being the lost cause and everybody’s second cousin that you don’t necessarily have to talk to. Oil and gas is now everyone’s favorite son. There’s value being seen again and the potential for an alleged amount of free cash flow being generated. This has two detrimental effects for our good friends, the bureaucrats. The first, which they may not have foreseen, will have them reflecting positively on the times where oil sold for negative $40. This first effect is the new level of expectations the capital markets have already placed on producers. They’re going to have to perform now. Where is the upside in investing in the firm? If a stock offering were to be prepared, who would be interested in paying these higher share prices? And they’ll need to be accountable for that performance with the expectation that they’ll meet or exceed the capital market returns available from other industries. Unfortunately they’re now on record as of August 31, 2021, just one month ago, with their decision that proves they can’t, won’t and will not ever make the changes to commence the effort to begin to account for their actions. That leaves them relying on their legacy and historical record of performance as to how they’ll manage the future of their enterprises. And their shareholders can take that to their virtual bank accounts.

The second point is the money itself. And more importantly who outside the bureaucrats will ever see it. Will oil and gas continue to provide these persistent bureaucrats with the means to continue expanding their wealth. Knowing how to avoid disintermediation has turned out to be a far more valuable business for them. Or will producer firms begin to be rebuilt by the investors in the vision of a dynamic, innovative, accountable and profitable footing as offered in the Preliminary Specification? I have documented the specious nature of the oil and gas producers earnings that were reported. With this alleged money now on the table the fight will begin in earnest. The two combatants positions are well defined and could not be in further opposition with one another. On one side is the oil and gas investor, who on a wholesale basis suspended their support of the producers starting in 2015. Banks are of a similar mind. And the producer firms themselves who have done nothing to remediate any of their past actions, performance or accountability, they’d muddle through as their holistic strategy. Who are now on record to not be seeking heightened accountability as their response to the direct request from their investors. Producers who have turned their back on oil and gas when they were no longer able to provide a future vision that was viable and commercial under their management. And in unauthorized fashion shifted the focus of their firm's to the “clean energy” industry. These are the positions of these two adversaries and the acceptance or rejection of either will be sorted in the short term. And I would suggest the resolution of this point will be the industry's first order of business. 

As background we have an industry that is operated on the basis of ERP systems that are designed, mostly through financial neglect that is deliberate on the producer bureaucrats behalf, to be part of their overall opaque accountability. Systems that are not provided by tier 1 ERP systems providers or developed within the past few decades of this century. It has been an expressed request by the investors that the producers adopt a tier 1 ERP system such as Oracle Cloud ERP, the base of the Preliminary Specification, to begin managing their operations and to make them accountable. Producers' choice to keep the existing ERP systems providers on a starvation diet since 2005 has been effective. Therefore never creating any competing capability or capacity to their franchise. Yet there has been a technological revolution that is leading to new, innovative and dynamic business models that are transforming primary and secondary industries throughout North America. Disintermediation is resisted by the status quo in all of these industries that are subject to its principles. Resistance to disintermediation can best be achieved through the budget process to solidify the ERP’s systems support of the bureaucracy. Organizational change therefore is otherwise impossible.

We have a record of performance in oil and gas that is well below sub par and wholly misrepresented in the financial statements of the producer firms. This misrepresentation continues with a cover up being obscured through the lack of appropriate systems development. My competitors have done remarkable work without even scraps being thrown their way. Now we have two well defined visions of the next generation of oil and gas. One involving continued unaccountably, poor performance and an abandonment of the primary business of oil and gas for the pursuit of a new industry in which producers have no capability or capacity. That being their commitment to clean energy. Where failure will somehow happen daily but never discourage those who are committed to saving the environment. Who will argue with that? The other being the Preliminary Specification which is designed for the commercialization of North American energy independence, which includes shale. Has a defined value proposition that deals with these issues and sets the industry on an appropriate course of action. Does anyone in the industry argue that profits are what are needed and the lack of profits are what have brought us to this disaster?

There’s going to be an ever growing stack of money being made by someone. If we expect those that have authored the damage and destruction of the industry to this point. Who have shifted their focus to clean energy in hopes of sealing a future of absolute unaccountability. Who have violently, from my perspective, resisted the opportunity to orchestrate the change voluntarily and set the industry on an appropriate trajectory. If you believe the producers, then there’s good news, you’ll no longer have to read anything that I write. If you believe the hype coming from the boom birds who’ve brought these claims to us before and then only invoked the excuse, blaming and viable scapegoats as to why it failed. That could be sooner than you think. This will be the 146th declared boom from these people in the time that I’m aware of. Theirs has worked before, I hope for everyone's sake that we don’t get fooled again.

On the other hand we have no shortage of work to do. Much needs to be done in the next few years. The Preliminary Specification needs to be built. The engineering and geological explicit knowledge needs to be captured as Intellectual Property and developed. New oil and gas firms need to be formed, capitalized and organized. Assets need to be transferred to these new producers in innovative, strategic and tactical ways. In this process we’ll all be helping the current producers to travel faster down their chosen journey to clean energy by disposing of dirty oil. This transition to the Preliminary Specification is something that must be done to deal with the financial difficulties the industry is plagued with from the current administration. This also needs to be done as preparation for the future. And to learn from the experience of this transition as we’ll be faced repeatedly with situations that share this same scope and scale of change in the near future of this business. We’ll therefore be somewhat prepared and experienced in challenges of this nature. Please review our Production Rights to see how everyone can participate in making this new oil and gas industry happen. An industry where it will be less important who you know, but what you know and what you're capable of delivering, what the value proposition is that you’re offering?

Those interested in joining our user community are People, Ideas & Objects priority and focus. The Preliminary Specification, our user community and their service provider organizations provide for a dynamic, innovative, accountable and profitable oil and gas industry with the most profitable means of oil and gas operations, everywhere and always. Setting the foundation for profitable North American energy independence, everywhere and always. In addition, our software organizes the Intellectual Property of the exploration and production processes owned by the engineers and geologists. Enabling them to monetize their IP for a new oil & gas industry to begin with a means to be dynamic, innovative and performance oriented. Providing a new investment opportunity for those who see a bright future in the industry. A place where their administrative, accounting, exploration and production can be handled for the 21st century. People, Ideas & Objects have joined GETTR and can be reached there. Anyone can contact me at 713-965-6720 in Houston or 587-735-2302 in Calgary, or email me here. 

What's the Definition of a Mirage?

 Something illusory and unattainable.

Synonyms include delusion, illusion and hallucination. I would suggest Merriam Webster add oil and gas profits. And so it begins again, the carnival barkers can be heard throughout the industry calling to get on the bus and don’t be late. At the time of this writing our sample of producers stock over the course of the third quarter were up 3.47%. The question that I have is. If we do have a good year in oil and gas, making for a grand total of six good years out of the past thirty six. Does that mean we're in for another run of five bad years right afterwards?

It may be the consequences of Europe’s pursuit of clean energy over the past decades. Maybe it’s the fact of the completion of the Russian / Chinese pipeline that became operational in December 2019 drawing down Russian storage volumes to critical levels this summer. Maybe it’s that Russia is more concerned about ensuring their people are supplied with natural gas during this winter. And have temporarily suspended some shipments to Europe until November 1, 2021. Leaving Europeans scrambling for natural gas supplies to meet their clean energy shortfalls in today’s relatively mild September and October weather, as opposed to cutting them off during December and January freezing conditions. I’ve read some projections of gas prices topping $100 in some areas. Oddly enough the chants that this time it’s different and prayers for a cold winter have begun. I’m not suggesting this is like the last declared booms that did or did not occur in oil and gas. Clearly, today’s date is different. Could of, would of, should of… Instead I suggest we see some financial and operational performance over a sustained period. Performance that shows its meaning has been accepted and understood by those that have refused to do so in the past. Projections of oil and gas nirvana are the mirage that they are. Without any facts or plans, relying on if, maybe, might or the next snow storm are possibly…  

Bureaucrats may have believed that the Russians, like the Saudi’s they’ve belittled over the past decades, could learn a thing or two from them. And neither have learned anything about how to “manage” an enterprise, or conduct any serious level of damage or destruction to their industries. In this latest example of the Russians we see both theirs and the Saudi’s propensity to put the horse ahead of the cart in their business approach. Establishing markets for their products. Building pipelines to those markets, filling those pipelines over a short contractual period of a few years while they develop the actual oil or gas to fill them. Ludicrous isn’t it! That’s not the way you destroy money and if they refuse to learn what good is it trying to teach them?

Producers may have believed they survived the difficulties of covid and the self-inflicted investors strike, the downturns of the past seven years in oil and twelve in natural gas. They’re unauthorized manner of diverting oil and gas revenues to clean energy “investments” is just another way to facilitate another generation of their unaccountable methods. Alternatively they may want to hold on for the real fight. It's not that People, Ideas & Objects will be offering up that fight. We’re done fighting, it’s only sport now that I point out their deficiencies. We’ve asserted our solution and user community to these difficulties and proven our case. We have our responsibilities to build the Preliminary Specification and all that has been detailed below. When there’s money on the table, or Free Cash Flow as they’re calling it today, that’s when the weapons are sharpened, bullets are loaded and the fight begins in earnest. Producers have been in the sights of those that have consistently expressed their distaste with their methods. Only to be ignored and abused further. Producers have a legacy of audited financial reports and continued accounting methods that reflect a financial performance that did not and is not occuring. They are wholesale misrepresentations. It is these same audited financial reports that reflect the past four decades of their administrations were spent destroying all of the value, faith, goodwill and trust within their organizations. It might be appropriate for me to suggest it was less than a month ago that the boards of directors, who represent the shareholders, did not consider the opportunity of implementing the Preliminary Specification to enhance their profitability and accountability. Their best plan at this point might be to think of an answer to when their shareholders' begin asking why? Their shareholders have two things they did not have before. A plan on how their solution in the form of the Preliminary Specification and associated communities can be brought to market. And the unimpeachable knowledge that producers' behavior has not, can not and will not ever change. 

On the other hand we have no shortage of work to do. Much needs to be done in the next few years. The Preliminary Specification needs to be built. The engineering and geological explicit knowledge needs to be captured as Intellectual Property and developed. New oil and gas firms need to be formed, capitalized and organized. Assets need to be transferred to these new producers in innovative, strategic and tactical ways. We’ll all be helping current producers to travel faster down their chosen journey to clean energy. This transition to the Preliminary Specification is something that must be done to deal with the financial difficulties the industry is plagued with from the current administration. This also needs to be done as preparation for the future. And to learn from the experience of this transition as we’ll be faced repeatedly with situations that share this same scope and scale of change in the near future of this business. We’ll therefore be somewhat prepared and experienced in challenges of this nature. Please review our Production Rights to see how everyone can participate in making this new oil and gas industry happen. An industry where it will be less important who you know, but what you know and what you're capable of delivering, what the value proposition is that you’re offering?

Those interested in joining our user community are People, Ideas & Objects priority and focus. The Preliminary Specification, our user community and their service provider organizations provide for a dynamic, innovative, accountable and profitable oil and gas industry with the most profitable means of oil and gas operations, everywhere and always. Setting the foundation for profitable North American energy independence, everywhere and always. In addition, our software organizes the Intellectual Property of the exploration and production processes owned by the engineers and geologists. Enabling them to monetize their IP for a new oil & gas industry to begin with a means to be dynamic, innovative and performance oriented. Providing a new investment opportunity for those who see a bright future in the industry. A place where their administrative, accounting, exploration and production can be handled for the 21st century. People, Ideas & Objects have joined GETTR and can be reached there. Anyone can contact me at 713-965-6720 in Houston or 587-735-2302 in Calgary, or email me here. 

Production Rights Announcement

 People, Ideas & Objects have been busy these past few months transitioning our initiative to a more sustainable foundation. One that will be more viable as a business concern and not dependent on the existing producers' good faith. We began this transition in late June 2021 with a series we carried until the end of July that documented how we would respond to an RFP (Request for Proposal) if we were ever asked for one. We of course never were expecting to receive one, however this exercise sought to differentiate our solution from the competition in the identification and support of the five primary Organizational Constructs inherent in the Preliminary Specification. In summary these consisted of the Joint Operating Committee, Markets, Intellectual Property, Information Technology and the support and expansion of Specialization and the Division of Labor. To name just the highlights. I directed the RFP at the producers Boards of Directors as they’re the ones that ultimately make such material decisions such as which ERP system the firm will use. I then placed tight deadlines on the producers knowing full well they would never comply with the logic and common sense of our RFP or the Preliminary Specification and we would then be able to disengage from them in terms of any obligation of having to work with them. Our legacy has been the thirty years of trying to do exactly that to resolve the issues that have fundamentally destroyed the financial, operational and political foundations of the industry during their watch. Issues that have been evident and present on the global stage since 1986, with our Preliminary Specification addressing them specifically and itself being published December 2013. We did not see placing strict timelines on these boards as unreasonable. In our opinion they’ve had many decades to contemplate such decisions.

Our writings then moved on to expressing the consequences of not moving forward with the Preliminary Specification from the perspective of People, Ideas & Objects. It was this perspective of mine, born of frustration and disbelief at the cumulative damage and destruction that has been caused, that possibly jaded the marketing aspect of what I was selling in those August 2021 blog posts. I then detailed our new plan, which is not fundamentally different from the old plan except for the one critical difference that was identified. It still consisted of our user community driven software development, conducting the industry wide structural changes of moving from the producers fixed cost accounting and administrative capability and capacity, to an industry based, variable cost, accounting and administrative capability and capacity. Managed by the user communities service providers through the 13 modules the Preliminary Specification. 

The change in our plan is the method these developments are funded and what those who were funding them gained in return. We first documented the beginning of the idea of “Permission Rights” in our Initial Coin Offering in an appropriately named blog post on September 11 of 2017. What the Coin was designed to do was to enable its holders the exclusive right to access the Preliminary Specification of People, Ideas & Objects and the services of the service providers to have their accounting and administration managed by the systems they were financing. The advantages of doing so were comprehensive and built value for the prospective coin holders in the following manner. The commodity price differentials between what the status quo producers have accepted throughout the past 35 years they’ve been operating their firms and what the real costs of oil and gas production are, is well documented in their published financial statements. They’re past acceptance of these is the precursor to future behaviors. Therefore we can establish a base case of what was and would be accepted by them vs. what the market prices for oil and gas will be as a result of the operational Preliminary Specifications decentralized production models price maker strategy would provide. That commodity price differential is also called People, Ideas & Objects et al value proposition that would have in turn financed a fee paid to the coin holder by the producers to access our software and services. We were attempting to monetize our value proposition through access rights to our solution. The coin holders would be granted the rights to produce x boe / day. Therefore the existing producers would need to aggregate the necessary “Processing Rights” to have access to the system and services which made them profitable. The assumption at the time was producers would not want to be asked by their shareholders why they were not profitable.

This went over like a lead balloon in the producer firms. And for reasons other than the coins viability we pulled it in March 2020 due to the crypto currency market and covid induced collapse of the producers. There is a nugget of logic contained within the basic idea that could be used to finance not only the much needed development of the software and user community. It would also enable those who acquired what we are now calling “Production Rights'' the ability to process their accounting and administration through the software and services they funded, but also manage their production and exploration processes in a dynamic, innovative, accountable and profitable way, everywhere and always. In turn earning the Production Rights holder, not just a fee from the differential, as with the former Permission Right, but the entire differential from the price of the accepted status quo producers behavior and the market price under the Preliminary Specifications price maker strategy. This may be achieved through the leverage provided by the Production Rights to exercise the movement of the existing producers' poorly performing assets to their own ownership, under substantially different financial conditions. Theirs being profitable where in essence the entire $25.7 to $45.7 trillion People, Ideas & Objects value proposition over the next 25 year period of operation would be earned by these new asset owners, the Production Rights holders that evolved into the new oil and gas producers. 

The behavior of past producers is evident today in their giddy approach to the news of their staunch efforts and the hard work they’ve undertaken to better manage their firms, or is it just the market conditions temporarily raising the price of oil and gas again. Soon we’ll also see their response, which may miraculously look much like their response was in the past. Is consolidation the workable solution for them to strengthen their self interest and enable their hold on power, or will we see something else? Nonetheless it’s on to clean energy all the time now and Shell has proven that by selling the one premium asset that drove the industry off the cliff last time. The Permian. We discussed a number of new and innovative possibilities as to how the “Production Rights” holders could begin these asset transfers in the discussion of our blog series “Oddly Enough, That’s Not Much Different Than the Old Plan” this September. Starting with non-operated participation in Joint Operating Committees. Understanding how banks are so pleased with their loans performance, what motivation would induce them to move the assets to a more profitable ownership. The sky’s the limit in terms of what’s possible to transfer these assets in my opinion. 

In terms of adding exploration and production aspects of a producer firm to the list of administrative and accounting, this isn’t anything new to anyone who may have read the Preliminary Specification in detail. There was only one change made in that blog post series that was not in the specification and that was detailed and identified. The E in ERP stands for enterprise and if you're only handling a part of a firm you’re not ERP in my opinion. The problem we discussed in that series was none other than the looming shortage of engineers and geologists that is well known and discussed throughout the industry. The only solution to this is what People, Ideas & Objects have proposed in the Preliminary Specification and is resolved through the use of the Intellectual Property construct of developing the explicit science and technological knowledge of the industry. A knowledge base that has been ignored and left to atrophy for reasons that are documented there. One in which is open to the engineers and geologists to acquire themselves and establish their own producer firms, IP operations and service organizations to deliver the tacit knowledge associated with the explicit knowledge they’ve documented that forms their IP. People, Ideas & Objects hopes to have motivated the further breakdown in the technical resource base of the existing producers. Both from the point of view of the Intellectual Property and as the motivation and commitment of the engineers and geologists to conduct these IP related activities. And therefore would form the science and technological resources of the new oil and gas industry we’re constructing. 

I believe that People, Ideas & Objects, our user community and their service provider organizations have taken a balanced approach to the industry to ensure the industry is provided with the most dynamic, innovative, accountable and profitable oil and gas operations everywhere and always. Profits are what make the industry prosperous and healthy, and profitability from a reasonable, timely and accurate accounting basis. Without these profits the greater oil and gas economy suffers unnecessarily and that only leads to greater issues. There would be no one outside of the self interested bureaucrats that would argue that “real” profitability is what has been missing and must be restored immediately. Profits are the only source of funding the industry will have to resurrect itself. The credibility, ethical nature and trust that has been destroyed over the past decades will take at least a decade of prudent management by our good friends to prove otherwise. They’ve chosen not to be concerned with profitability and they’ve not responded in any way to the demand for more accountability from their shareholders. What is it that we’re expecting? Or are we to play the fool again in two years by giving them one more chance today?

At the same time People, Ideas & Objects plays in a number of critical dialectic activities. To ensure the consumers are provided with an abundance of energy at affordable prices. Oil and gas is the reason that the mechanical leverage we prosper from is possible. It will be the most powerful economy in the world that will also be the largest consumer of energy. Therefore our obligation to ensure profitable energy independence needs to be considered as part of what we’re undertaking. This demands that innovation on the science and technology of engineering and geology be at the forefront of the activities of those involved. Structured innovation within the industry and structuring it within the firm are the critical means in which innovation comes about. To suggest that it just springs out of air is foolhardy in the extreme. Controlling and guiding it, ensuring that it isn’t pursued over and over again with the associated redundancies and cost drain. Where those that work the hardest for the biggest developments are rewarded and recognized for their achievements. Not robbed and castigated as they are by today’s bureaucrats. These are how People, Ideas & Objects Preliminary Specification, our user community and service providers are undertaking to solve the difficult issues of oil and gas. Please review our Production Rights to see how everyone can participate in making this new oil and gas industry happen. An industry where it will be less important who you know, but what you know and what you're capable of delivering, what the value proposition is that you’re offering?

People, Ideas & Objects have determined that these Production Rights are sold on the basis of our revenue. The value earned is in the differential and the leverage provided. We’ve identified that the target market for those that could participate are all of those that fall outside of the current producers bureaucratic clique. Outside of these points we have not decided on anything and would need to know what it is that others see as possible. As soon as we’re able to generate revenue the quicker we’ll begin these developments. Please contact me through the means that are provided below. 

Those interested in joining our user community are People, Ideas & Objects priority and focus. The Preliminary Specification, our user community and their service provider organizations provide for a dynamic, innovative, accountable and profitable oil and gas industry with the most profitable means of oil and gas operations, everywhere and always. Setting the foundation for profitable North American energy independence, everywhere and always. In addition, our software organizes the Intellectual Property of the exploration and production processes owned by the engineers and geologists. Enabling them to monetize their IP for a new oil & gas industry to begin with a means to be dynamic, innovative and performance oriented. Providing a new investment opportunity for those who see a bright future in the industry. A place where their administrative, accounting, exploration and production can be handled for the 21st century. People, Ideas & Objects have joined GETTR and can be reached there. Anyone can contact me at 713-965-6720 in Houston or 587-735-2302 in Calgary, or email me here. 

Where's the Problem? Part IV

 On Monday we reviewed the first major process of innovation in the Preliminary Specification. It consisted of the producer's deployment of its capabilities and capacities in an environment where the demand for the technical resources were projected to outstrip supply. The development of Intellectual Property in the hands of those individual technical resources. Providing these technical resources with the motivation to develop the underlying science, applied science and their technologies of oil and gas. And to play on the sciences and technologies interaction and inter development. The second major process of innovation in the Preliminary Specification is the topic of discussion today. 

These individual technical resources are not an island upon themselves. Just as producers have tried to wall in the capabilities and capacities of the entire administrative, accounting, regulatory, engineering and geological domain completely within their four walls. This brings about a limited application of the science and technology of exploration and production. These domains have far exceeded the capacity of one individual or one producer many decades ago. A more holistic approach is going to be necessary for the development of these sciences and technologies if we are to expand the capacity and capabilities of the always profitable everywhere North American deliverability, and achieve energy independence for the lowest possible cost for the consumers. To continue to think otherwise is ludicrous, but then we have the destruction we have today. 

Specialization and the division of labor is the means in which to resolve these issues and expand our horizons across the 21st century. Without the ERP software such as the Preliminary Specification to define and support the organizations within the North American petroleum marketplace, this will never occur. In addition, without the software development capabilities of People, Ideas & Objects and our user community being established as a permanent facility in the North American market, we are only solving the issues of the day. Subjecting ourselves to the inability to act in a constructive manner to the future changes and their demands in the oil and gas industry. The Organizational Constructs of the Preliminary Specification play an important role in enabling these to be maintained and to follow the principles that have been established in the U.S. Constitution, the capitalist system and are the reason the U.S. is the dominant economy. Bureaucracies didn’t make it on that list.

Therefore in terms of the second major process of innovation that is established in the Preliminary Specification we need to ensure that the industry as a whole provides an environment that fosters an open and collaborative marketplace where ideas dominate. Where ideas are what get the competitive juices flowing to push the sciences and technologies forward. The key to this is the establishment of a new document process within the modules of our software that we call the Work Order. We have noted that there are two major processes that are managed by the Work Order and discussed one of them at length in the Organizational Constructs wiki page. In summary it seeks to enable the ability to charge these technical resources time to the various overhead accounts, AFE’s, leases etc. It works across the industry, therefore establishing the second source of revenue for the small and start-up producers to begin their firm and allow the engineers and geologists a means to capture their time and efforts through an efficient and effective interface to the industries Joint Operating Committees. It will have the appropriate billing and management facilities to control costs or conversely manage revenues. A sizable feature set more than what is available today. The second set of features of the Work Order is where we’ll be able to establish the foundation of the industry to expand on the science and technology of oil and gas and enable the Organizational Constructs to contribute innovatively to benefit from them. 

Professor Giovanni Dosi said it best in his paper “Sources, Procedures, and Microeconomic Effects of Innovation.” Journal of Economic Literature Vol. 26, No. 3 (Sep., 1988), pp. 1120-1171 (52 pages). I am including some relevant quotes of Professor Dosi’s with limited commentary to acquire a sense of the understanding of what is needed within the greater oil and gas industry in order to facilitate the developments of the sciences and technologies of engineering and geology. 

Thus, I shall discuss the sources of innovation opportunities, the role of markets in allocating resources to the exploration of these opportunities and in determining the rates and directions of technological advances, the characteristics of the processes of innovative search, and the nature of the incentives driving private agents to commit themselves to innovation.

• The search, development and adoption of new processes and products in market economies are the outcome of the interaction between:
• Capabilities and stimuli generated with each firm and within the industry of which they complete.
• Broader causes external to the individual industries, such as the state of science in different branches, the facilities for the communication of knowledge, the supply of technical capabilities, skills, engineers etc.
• Additional issues include the conditions controlling occupational and geographical mobility and or consumer promptness / resistance to change, market conditions, financial facilities and capabilities and the criteria used to allocate funds. Microeconomic trends in the effects on changes in relative prices of inputs and outputs, including public policy. (regulation, tax codes, patent and trademark laws and public procurement.)

However, even in the case of “normal” technical search (as opposed to the “extraordinary” exploration associated with the quest for new paradigms) strong uncertainty is present. Even when the fundamental knowledge base and the expected directions of advance are fairly well known, it is still often the case that one must first engage in exploratory research, development, and design before knowing what the outcome will be (what the properties of a new chemical compound will be, what an effective design will look like, etc.) and what some manageable results will cost, or, indeed, whether very useful results will emerge. 

In general, each organizational arrangement of a firm embodies procedures for resource allocation to particular activities (in our case, innovative activities), and for the efficient use of these resources in the search for new products, new processes, and procedures for improvements in existing routines; however, the specific nature of these procedures differs across firms and sectors. For example, the typical degrees of commitment of resources vary by industry and so do the rates at which learning occurs. I now turn to the interpretation of these phenomena.

general scientific knowledge yields a widening pool of potential technological paradigms,

• The nature and interests of the bridging institutions between pure research and economic applications. (p. 1136)
• Institutional factors that drive the technology or science, such as (the military) (p. 1137)
• The selection criteria of markets and or techno-economic requirements of early users. (p. 1137) (NASA, Pentagon, the FDA and Nuclear Reactors for the Navy.)
• Trial and error mechanisms of exploration of the new technologies often associated with Schumpterian entrepreneurship. (p.1137)

With respect to the engineers and geologists Intellectual Property and its development. There is this interesting aspect noted in Professor Dosi’s research. He notes that Levin states that the control of complementary technologies becomes a “rent-earning firm-specific asset.” Dosi states 

in general, it must be noticed that the partly tacit nature of innovative knowledge and its characteristics of partial private appropriability makes imitation a creative process, which involves search, which is not wholly distinct from the search for new development, and which is economically expensive - sometimes even more expensive than the original innovation, and applies to both patented and non-patented innovations. (p. 1140)

And finally in terms of the relevant quotes from the paper.

Market structure and technological performance are endogenously generated by three underlying sets of determinants.”

• The structure of demand.
• The nature and strength of opportunities for technological advancement. 
• The ability of firms to appropriate the returns from private investment in research and development.

I recommend everyone download Professor Dosi’s document (paywall) it is a tragically difficult document to read as it is comprehensive and thorough. Professor Dosi is well established in the innovation field and has contributed greatly. 

The Work Order of the Preliminary Specification in this second role of expanding the industry base of knowledge and understanding is an important element of the future. The Work Order feature that I’m highlighting is the ability to create ad-hoc working groups for research and study between producers with / without having any prior established relationship, agreement, interactions or transactions in the past. Unlike an AFE or lease that are derived from the Joint Operating Committees working interest distribution. These working groups may be established with others outside of the producer's usual domain of partners, service industry representatives, universities and other institutions that have resources of interest that are available to be committed to a working group for the purposes of what Dr. Dosi has described. These working groups are able to be accommodated in the current ERP systems through the normal process of accounting, however, are a logistical and financial nightmare due to the structure that the producers are operational under. These working groups may have contributions in the form of cash, intellectual resources, Intellectual Property and other resources beyond the normal understanding of a business relationship in oil and gas. Therefore they have been avoided as they’re too difficult to administer and those that initiate them are usually holding the line with mitigating the difficulties and misinterpretation of what was happening and who was obligated for what in order to earn which. The sense of collaboration and pursuit of the science and technology that was evident in these working groups in the 1960s is no longer present today. As they are more or less unused and unusable. 

The issue therefore is the point of where we’re at where we need to be in terms of the science and technology of oil and gas. It is clear these need to be reestablished to sponsor an overall direction and collaborative leadership position within the industry in terms of its innovation, research and development. And to do so, not with the level of participation that was done in the 1960s, but a quantum, exponential and logarithmic scale larger than what could be conceived of by the producer firms today. The Work Order system is the means in which to do so. It provides the interface necessary to capture the structure of the understanding of the purpose of the working group, the contribution of the participants and the distribution of any findings. Usually in the form of ownership of the Intellectual Property, which expresses the desire and motivation to have these working groups and to participate freely. Everyone sitting alone in their office downtown or at home isn’t going to do anything spectacular in terms of bringing about profitable, energy independence on the continent at the lowest possible cost to the consumers for the remainder of this century, and to do so for at least that long. 

Please review our page to see how everyone can participate in making this new oil and gas industry happen. An industry where it will be less important who you know, but what you know and what you're capable of delivering, what the value proposition is that you’re offering?

Those interested in joining our user community are People, Ideas & Objects priority and focus. The Preliminary Specification, our user community and their service provider organizations provide for a dynamic, innovative, accountable and profitable oil and gas industry with the most profitable means of oil and gas operations, everywhere and always. Setting the foundation for profitable North American energy independence, everywhere and always. In addition, our software organizes the Intellectual Property of the exploration and production processes owned by the engineers and geologists. Enabling them to monetize their IP for a new oil & gas industry to begin with a means to be dynamic, innovative and performance oriented. Providing a new investment opportunity for those who see a bright future in the industry. A place where their administrative, accounting, exploration and production can be handled for the 21st century. People, Ideas & Objects have joined GETTR and can be reached there. Anyone can contact me at 713-965-6720 in Houston or 587-735-2302 in Calgary, or email me here. 

Where's the Problem? Part III

 Related to the innovation that we discussed in last Thursday’s post. There’s an issue in the industry that has actually been clearly identified by producers over the past decade. It’s not that they’ve sought to resolve it in any way. They’ve actually made it much worse and still failed to address it. Yet I think if we asked anyone in industry about the looming shortage of engineers and geologists they would all know and understand the protracted mess we’re in with respect to the critical shortages of these key resources. University faculties for engineering and geology, related to oil and gas, are all but empty thanks to the chronic, boom / bust induced layoffs in those disciplines. And the retirement of the brain trust is ongoing. 

The Preliminary Specification uses five Organizational Constructs consisting of the Joint Operating Committee, Specialization and the Division of Labor, Intellectual Property, Information Technology and Markets to organize the industry and producer firm to enable them to operate in the 21st century. By using the Joint Operating Committee we move the compliance and governance frameworks into alignment with the legal, financial, operational decision making, cultural, communication, innovation and strategic frameworks of the industry. To these constructs and frameworks we could add accurate and timely accounting, business and common sense, logic in addition to a myriad of others but I’d only be piling on. When there’s issues to resolve the first step in resolving them is to organize and that is what the Preliminary Specification seeks to do. But there’s more. Since January 2014 People, Ideas & Objects have dedicated our primary focus to building our key competitive advantage of our user community. To have quality, usable ERP software it must be driven by a high level of user involvement. Seven years of community effort, based on the structure we’ve given that community, has mitigated much of the time required in organizing these critical resources to develop quality software. Now we’re adding the customers necessary to fuel these developments' financial needs.

Secondly software and more specifically ERP software is the only means in which to organize continental and global markets. Serendipity and spontaneous order are redundant in the 21st century as software defines and supports organizations. Unfortunately without a software development capability such as what People, Ideas & Objects and our user community propose, software will only constrain organizations in proverbial cement. Organizational change can only be orchestrated through changes in the software first. Without a permanent and dedicated ERP software development capability and capacity, oil and gas will be repeatedly faced with the type of critical issues such as what its current unchanging environment provides. The type of situation we’ve labeled a modern day software bug. We’re in a critical situation in oil and gas. As we’ve detailed in the September 2021 section of our Implementation / Budgets wiki page. It’s no longer good enough to just own the oil and gas asset anymore. Producers will also have to have access to the ERP software that makes the oil and gas asset profitable. That is the Preliminary Specification and we are seeking from our customers, the future oil and gas producers and others, the financial resources necessary to build this software and community. In exchange we are granting the access rights to the software being developed and associated communities in order to earn the substantial value proposition between our vision and the status quo. 

The issue of the shortages of engineers and geologists is resolved in the Preliminary Specification in the following manner. Looking at the producers designation as operator is a requirement that demands producers have the requisite engineering and geological expertise, skills, capacities and capabilities necessary to deal just-in-time with the inventory of properties they own. In order to achieve these capabilities and capacities a producer, as operator, needs to have a surplus capacity of these resources available for the many times when their throughput demands them. In addition, as these sciences and technologies expand their specializations the associated division of labor increases. We believe the demand for more resources within each producer in order to cover off the diverse specialized needs of all of the operated processes of production and exploration will become problematic. People, Ideas & Objects feel that the operatorship role will demand an ever increasing surplus capacity of these resources be available, are not shared or shareable outside of the producer firm, other than through their Joint Operating Committees, and therefore we estimate these to be operational at 75% in terms of their utilization rate across the industry. Furthermore as specialization and the division of labor begin to expand further as it is the most viable solution to the shortfall in these resources. The industry's current organizational configurations operational utilization rate will drop due to the greater diversity of these resources demanded through specialization. We also believe the population shortage of these key resources, this diversity of their demands from specialization and their low utilization rate will quickly escalate as issues to cause each and every producer seeking these capabilities to move outside of the commercial realm. Today we believe that in addition to the wall of fixed overhead that each small and startup producer is faced with overcoming. What we have listed as their primary challenge. The dearth of these technical resources available to the junior sector, their costs and the diverse nature even today put these resources beyond the scope of the small and startup producers. These two issues are what we believe to be the primary and secondary reasons these small producers are currently travelling down the road to extinction. 

This is either the downfall of specialization and the division of labor or the hoarding of resources by the producers which has occurred in order to achieve the just in time, robust capability needed by each and every one of the operating producers. The upside of specialization is it has been the sole reason for the creation of any and all value experienced in the world since the late 1700’s. Deployment of these technical resources in a hierarchical strata within the producer organization, as it was so effectively done in the 1950’s may have ceased to function. The Internet and other Information Technologies such as ERP software are available to expand the role of specialization and better deploy these resources in markets, but also to substantially increase their productivity as we’ve defined our solution in the Preliminary Specification with our user community. Making up for any shortfall from their looming shortages from the universities and retirements. How effective can specialization and the division of labor be? Adam Smith who developed the theory in the late 1700’s researched their effect on the productivity output of a pin factory. As a result of breaking down the process of manufacturing of pins he was able to yield a 240 fold increase in the factory's output. The elimination of the current and anticipated surplus capacities in the producers, and the manner in which People, Ideas & Objects have employed innovation in the Preliminary Specification to reduce the redundancy of attempting the same failed “innovative” experiments at each location each and every year, or having the current producers designated innovative staff consumed with how better to be building balance sheets. To name just a few of the methods we’ve employed. These are three elements that make up some of how we’ve proposed to resolve these issues.

Therefore in conclusion, over these past two posts that summarize the first major process of innovation in the Preliminary Specification. We see that our focus on profitability will enable producer firms to turn to innovative solutions to their unprofitable, and looming unprofitable properties. Profitability being a real issue to People, Ideas & Objects we have incurred the persecution for such thinking in oil and gas, but survived. Elimination of the redundancy of the copycat providers that are fed the Intellectual Property from other vendors by the producers has done nothing but caused what can only be called an absolutely regressive status quo. Only the Haliburtons and Schlumberger's were able to prosper, all others were serially abused and its good luck now finding the field capacity and capability for the future. Even those two mentioned have left the North American market. Such is the damage that is experienced throughout. Intellectual Property provides the organizational construct in which to reestablish the appropriate means to rebuild the key resources of the engineers and geological capacity and capabilities in oil and gas but also in the service industry. IP will focus, advance and eliminate the redundancy that is inherent and encouraged in the current producer administrations. It just so happens that it’s also the law and the power that a primary industry has abused with its bureaucrats dictating to its critical resources to take it my way or the highway, is over. The world of oil and gas will be dominated by the prosperous, brain busted innovators who will command premiums for their service with no fear of being pirated by lackeys at the old producer firms. They’ll be welcomed by the dynamic, innovative, accountable and profitable producers being rebuilt. We’re all in this together and producer profitability is what’s going to be necessary to pay competitive dividends, service debt and rebuild all of these industries in the greater oil and gas economy with the faith and trust that’s been… Well no one has come up with a word that’s adequate for the depth of destruction we’ve all experienced. 

Developing this engineering and geological Intellectual Property, making it available within the greater oil and gas market for those to discover is one of the steps of this first major process of innovation in the Preliminary Specification. This IP is then available for others to see and understand how their ideas may fit in to solve other problems which generates more IP, products, services and subsequently profitable oil and gas production. This IP is listed in the Preliminary Specifications Research & Capabilities module which is then focused by classification and categorization into the Knowledge & Learning module. In other words, it's a marketing forum for their ideas and services as well as means for producers to learn what is available. It’s within our Resource Marketplace module that enables our new producers to find these ideas at their beginning and encourage them to develop with some of those primary industry revenue streams they’ll earn as a result of the efforts of all these people throughout the greater oil and gas economy. Why will producers be spending on service industry development? The simple answer is there’s no one else that’s going to. Prior investors in the service industry have vivid memories of investing millions of dollars in drilling rigs that were subsequently cut up for scrap metal to pay the back taxes and overheads to survive. It will be the only means for producers to rebuild the capacity and capabilities the previous administration frittered and wasted thinking it was nothing, had nothing to do with them and wasn’t their problem.

Please review our Wiki page to see how everyone can participate in making this new oil and gas industry happen. An industry where it will be less important who you know, but what you know and what you're capable of delivering, what the value proposition is that you’re offering?

Those interested in joining our user community are People, Ideas & Objects priority and focus. The Preliminary Specification, our user community and their service provider organizations provide for a dynamic, innovative, accountable and profitable oil and gas industry with the most profitable means of oil and gas operations, everywhere and always. Setting the foundation for profitable North American energy independence, everywhere and always. In addition, our software organizes the Intellectual Property of the exploration and production processes owned by the engineers and geologists. Enabling them to monetize their IP for a new oil & gas industry to begin with a means to be dynamic, innovative and performance oriented. Providing a new investment opportunity for those who see a bright future in the industry. A place where their administrative, accounting, exploration and production can be handled for the 21st century. People, Ideas & Objects have joined GETTR and can be reached there. Anyone can contact me at 713-965-6720 in Houston or 587-735-2302 in Calgary, or email me here. 

Where's the Problem? Part II

 First off, this blog post is number 3,000. Secondly, you all have my humble apologies.

Declaring some team as the innovative leaders of the producer firm is usually how the bureaucracy has dedicated themselves to innovation. Having the “team” resume their regular duties once the press release, or dog and pony show is completed. At best these “team” members which emulate the Former Soviet Union's propaganda committee, will gather once a month for advanced naval gazing sessions of their innovativeness. Although the situation is not the same, the two are oddly consistent in terms of their performance and productivity.

People, Ideas & Objects undertook the necessary research into how innovation is conducted and developed, implemented and managed in technology and science oriented businesses and industries. This was done through a comprehensive review of primary research on the subject. With a dedicated focus on two specific Professors Giovanni Dosi and Richard N. Langlois. What we learned is that innovation is a defined and replicable process that is instilled within the organization. It is either purpose built, as in the most obvious case of Apple, or it is culturally missing both organizationally and industry wide. In a global business environment where competition is no longer across the street and the consequence of it usually arrives in your market seemingly overnight. Or made apparent through the demands of the capital markets, with its speed of decision making and wealth of global options. Where the long standing reputations and cultures of a firm’s performance are what stand out and are what exist for eternity in an Internet connected, global rumour mill. 

Idle navel gazing is unproductive as most everyone can comprehend. In Tuesday’s post we discussed how the Preliminary Specifications detailed, actual, factual accounting identifies which properties are not producing profitably. How a team of engineers and geologists could be deployed to triage what might be possible to remedy the situation at that specific property and enable the changes necessary for profitability to return. Deployed on a real, live issue is where innovation is needed. Dreaming up solutions with no understanding of what the issues are, other than how to build the balance sheet faster might be what navel gazing is defined as. Profitability is the only business issue of concern anywhere and always. In the Preliminary Specification profitability drives the organization and innovation is its defined organizational solution. 

One of the five Organizational Constructs of the Preliminary Specification is Intellectual Property. The point of today’s discussion is on the IP of the engineering and geological science and technologies of oil and gas. These are now being documented and the copyright is being earned by the individual engineers and geologists that are joining our initiative to rebuild the oil and gas industry on an innovative and profitable footing. They will be the ones that are forming the technical expertise in the industry from the point of view of their application of engineering and geology as a service they’ll provide in combination with the Intellectual Property they’re now developing. (See also the discussion on Specialization and the Division of Labor.)The Knowledge & Learning module of the Preliminary Specification enables these triage teams to know and understand the state of the art in oil and gas. The engineers and geologists would be able to maintain their Intellectual Property in the Research & Capabilities module which then populates the Knowledge & Learning module by geographical, geological, operational and other criteria for the Joint Operating Committees that are associated with those designated characteristics and classifications. Providing the engineer or geologist with a means of marketing and distribution of their newly published, probably published somewhere else first, and well earned Intellectual Property. Where they will be able to use that published explicit knowledge in combination with their tacit knowledge as a service to build their consulting revenues we’ve discussed in the Intellectual Property section of the Organizational Constructs page of our Wiki. IP based on some unique understanding of why that formation or that method of completion has behaved in that matter over the course of its productive life, and the innovative solutions they’ve developed. Solving real life problems that are derived from the lack of profitability. Not necessarily developing new earth shattering, pun intended, shale technology but focusing on the critical science and technological details of the entire oil and gas industry.

As a result of People, Ideas & Objects, our user community and their service provider organizations proving there has been a deliberate lack of profitability, accountability and speed in today’s North American oil and gas producer. And there has been no action to resolve it. We are relegated to rebuilding the industry brick by brick and stick by stick in the vision of the Preliminary Specification and as we’ve defined in the recent series “Oddly Enough, That’s Not Much Different Than the Old Plan.” To make these changes in the institutions that exist would be difficult at any point in time. When these organizations are faced with existential crises such as they are today, then they have the opportunity to do so. No changes will be made under the current administration, we’ve now proven they’re too conflicted and self interested to make the appropriate choices. Therefore it will actually be a simpler process of organizing in our new environment without having to deal with the constraints and compromises of the past cultural influences being considered. We will be able to rebuild much quicker in the vision that has been laid out and gain an efficiency and effectiveness above what a compromised solution would have offered. We are liberated and unconstrained.

The above detailed process of the IP of engineering and geology deployment is part of one of the two processes of innovation provided in the Preliminary Specification. By using Intellectual Property to appropriately manage the development of the science and technology of engineering and geology we are using the tools that were set out in the U.S. Constitution and the primary reason the U.S. is the most dominant economy in the world. Producers today have sought to consistently wash the IP of any vendor across the industry in an attempt to foster copycat styled competition in a vain attempt to achieve cost control. This is contrary to what the law requires, or in other words illegal. And it has stifled the innovation in the industry as there is nothing in it for anyone to bust their brain when the industry just abuses the results. The copycat competition fostered in their environment has ended as Intellectual Property is now recognized as its dominant position in business. Oil and gas will be based on its science and technology of engineering and geology by those who advance it. Copyright provides the monopoly power to express the ideas that are discovered. Therefore limiting the duplication of innovations in the industry and focusing the market on those that have the ideas. Today, in order to adopt these copycat competitive policies, producers had to ensure that none of this explicit engineering or geological knowledge was published. It had to be freely available to anyone and everyone in all of the producer firms. It is therefore undocumented and available for anyone to pick up, publish and begin advancing it by beginning to build their IP and service organization or oil and gas producer around. In today’s business environment there is quickly becoming the understanding that it is a software world. Such as what People, Ideas & Objects et al claim that it’s not good enough to just own the oil and gas asset. You’ll also need access to the software that makes the oil and gas asset profitable. 

Software is derived from Intellectual Property. It is therefore an Intellectual Property world and those that are eligible to earn it and claim it are those that are respected. Trolls, pirates and others are sent back to the fourth century. If you are actively seeking to destroy another firm's well established Intellectual Property by copying it, then you are effectively destroying all Intellectual Property. And you will be going against all those that are now basing their organizations on IP, and that is no longer and will never be acceptable again. You will be making yourself a pariah. The fact that oil and gas has not documented their IP is an opportunity. You wouldn’t be copying any other published works. And the process of having it documented and published by those who will earn the rights should be seen as necessary in order to turn things around in this industry. You’ll not be a pariah, but will be conducting a valuable service that should have been completed long ago. Even if there were published works they would form the foundation of the industry that is readily available and can be seen by those with new and innovative ideas that are outside the domain of the status quo. Expanding the understanding of the industry with the opportunity to publish their new ideas and establish new service organizations or producers around that idea. An endless cycle of rapid and iterative innovation where technologies expand the sciences and in turn expand the technologies… 

Please note that this treatment is different from what was one of the compromises that were contemplated in the Preliminary Specification. Initially, and as the Research & Capabilities and Knowledge & Learning modules are written, they denote that it is a producer based development of engineering and geological based capacity and capabilities. This is no longer the case and is as I’ve defined here today. The earth science and engineering capabilities and capacities of the new oil and gas industry we’re building here are discussed in the IP section of the Organizational Constructs page of our Wiki. We’ll be discussing these points further in our next post. 

I’ve proposed a solution to the chronic lack of profitability in the industry and its associated issues of specious accounting. In late August 2021 People, Ideas & Objects put producers on record that they can’t, won’t and will not ever address their lack of accountability. Leading to the question of whether all of these issues were by design or incompetence. I feel this has now sealed theirs and our futures. The opportunity People, Ideas & Objects sees is that all of us can channel all of these people and Organizational Constructs into innovation, productivity, performance and profitability throughout the North American oil and gas industry. Tapping into their inherent motivations to capture a dynamic, innovative, accountable and profitable oil and gas producer and industry, focused on providing the most profitable means of oil and gas operations, everywhere and always. To enable a continued expansion of the deliverability and reserves to ensure North American energy independence for the lowest cost available to consumers. An industry where it will be less important who you know, but what you know and what you're capable of delivering, what the value proposition is that you’re offering?

Those interested in joining our user community are People, Ideas & Objects priority and focus. The Preliminary Specification, our user community and their service provider organizations provide for a dynamic, innovative, accountable and profitable oil and gas industry with the most profitable means of oil and gas operations, everywhere and always. Setting the foundation for profitable North American energy independence, everywhere and always. In addition, our software organizes the Intellectual Property of the exploration and production processes owned by the engineers and geologists. Enabling them to monetize their IP for a new oil & gas industry to begin with a means to be dynamic, innovative and performance oriented. Providing a new investment opportunity for those who see a bright future in the industry. A place where their administrative, accounting, exploration and production can be handled for the 21st century. People, Ideas & Objects have joined GETTR and can be reached there. Anyone can contact me at 713-965-6720 in Houston or 587-735-2302 in Calgary, or email me here. 

Where's the Problem? Part I

 We’re starting off with a new journey here at People, Ideas & Objects with our user community and their service provider organizations. Opening the door to more participants in the industry to be included in the transformation of the old oil and gas industry into the new one built on the vision of the Preliminary Specification. With the size of the Internet we have the room to accommodate everyone. I thought that it would be worthwhile to start here with a quote from St. Augustine. 

Hope has two beautiful daughters; their names are Anger and Courage. Anger at the way things are, and Courage to see that they do not remain as they are. 

Some may state that I’ve had the anger down, which is true, but all of this damage and destruction should be seen as unnecessary. The Preliminary Specification is a radical, surgical reconfiguration of the industry to address it’s performance, profitability, innovativeness, accountability and speed issues, to highlight just some of the larger ones. Where are these issues and whatever could the problem be? And now we’re bringing up speed? When did speed become an issue on People, Ideas & Objects list of objectives? Good question, but it always has. Recall the many times that I’ve stated… 

We provide this by moving the compliance and governance frameworks of the hierarchy into alignment with the seven frameworks of the Joint Operating Committee. Enabling a greater speed, accountability and innovativeness of the producer.

The argument regarding speed may not have been discussed directly as clearly as the profitability or accountability has. I would assert that it is part of dynamism. The issue is of significant scope and scale as speed remains unaddressed in the current environment. It is a result of the lack of accountability mostly, but also the “belief” through specious accounting that building balance sheets is the sole purpose of executive management. When you’re not accountable for incinerating investor money it’s easy to keep the party humming for another quarter. Holding someone to account for the real loss of money is moot when the next truck with new investor cash is in the loading dock. 

Speed comes into play when the continuation of overinvestment as represented by that additional cash coming in from investors eventually leads to overproduction, or unprofitable production as we describe it, that destroys even the specious earnings these producers have reported for four decades. But this process takes time to take effect, think in terms of a few years for it to play out. This is followed by the invocation of the highly effective blaming, excuses and viable scapegoat generating machine that has the effect of taking a few more years before the religion of “capital discipline” is restored and field drilling activity is cut. Think of capital discipline as the brain surgeon who’s favorite tool is a hammer. It is the deliberate destruction of productive capacity of the producer firm, while the market "rebalances." In the course of the point of initial overproduction of a commodity dependent on the economic characteristics of a price maker. This causes the commodity price to drop below the marginal price instantly. And it has historically taken the speed of the industry to cycle through this entire process anywhere from 3 to 7 years. With shale producers looking to establish some solid records in the commodities recovery speed. I have argued that oil and gas will require deliberate efforts to remediate the markets back to normalcy. So yes speed has always been an issue, however the point of the exercise is that the producers would always display their bravery and courage to muddle through, once again. 

Since the commodity responds to any overproduction in real time this response by producers is inadequate and the cause of the 5 reasonable years of performance out of the past 35 in terms of their famed boom / bust cycle. Their accounting methods circuitously avoid the ability to recognize this or adhere to the requirements of basic business principles as those have all been worked out of their “build bigger, better, beautiful balance sheets” business model. Their inability to respond to their shareholders demands for accountability, an issue that People, Ideas & Objects proved on August 31, 2021, is what will be their defining criteria until such time as they are physically removed. Which is the job that the People, Ideas & Objects, our user community and their service providers, engineers, geologists and our customers are undertaking today. 

With the Preliminary Specification each property or Joint Operating Committee is furnished with complete financial statements each month. These will include the actual overhead incurred as we’re eliminating the charging of any overhead allowances. The monthly accrual of depletion will also be conducted for each producer in the property based on a reasonable, and competitive basis for producers to compete for capital in the North American capital markets. Therefore each property will be evaluated monthly as to its profitability / loss and if it is losing money it will be shut-in to provide real value in the business model that we’re pursuing. Incurring what we call a null operation, no profit but also no loss, the producer firm therefore achieves their highest profitability on their overall production profile based on the commodity prices on offer. The reserves will be saved for a time when they can be produced profitably. The reserves are not incurring production and storage costs for the excess production the markets don’t need. And the reserves are not incurring the cumulative and recurring costs of the losses if the property continued its unprofitable operations. But the best part is, the commodity prices would find their marginal price which would define the critical point where production should / should not occur. And the commodity market's response would be instant.

With the Preliminary Specification the organizational speed in which this occurs would be within the following few months that the property slipped below the null threshold. Accruals are done on the production process that will define the possibility of a loss in the subsequent month and this could be the opportunity, should there appear to be a loss, to deploy engineers and geologists to quickly review the property to see if there was anything they could do to immediately remediate the property and move it decidedly back to profitability before it was shut-in. Otherwise once the fact of the loss was verified the property would be shut-in to ensure that the maximum profitability was achieved by all of the producers involved in that Joint Operating Committee. The overall time for this being approximately three to four months contrasts to the three to seven years, and maybe upwards of several decades in the shale era that “capital discipline” provides. I am unaware and it is unknown at this point what this cycle time for clean energy will be. People, Ideas & Objects abbreviated process has the added feature of ensuring profitability in the producer is maximized at all times based on the realized commodity prices. Invoking a market or production discipline over the process that is missing and the main cause of the financial destruction we’ve witnessed today. Alternatively we can wait until oil prices reach negative $40.00 and refinery's make the decision to have producers shut-in production by force.

Once the process of shutting in the property has been completed, possibly as a last act of the engineers who were on the initial team sent in to try and quickly turn things around. A second team is sent in to do a deeper analysis of the issue and opportunities of what could be done. Looking to build the appropriate programs and raise the appropriate AFE’s for any field work that could or should be done to enhance deliverability, reserves or cut costs. This could be a key part of the overall process of innovation that is an inherent part of the Preliminary Specification. And although we haven’t been speaking directly about innovativeness, innovation is part of the genetic makeup of the Preliminary Specification and is defined within two major processes of the system, but also enabled throughout the industry. Our recent discussion of Organizational Constructs includes Intellectual Property of the industry as an organizing principle. How they ensure a rapid development of science and technology with the added feature of eliminating the useless nature of redundancies through repeated duplication.

I’ve proposed a solution to the chronic lack of profitability in the industry and its associated issues of specious accounting. In late August 2021 People, Ideas & Objects put producers on record that they can’t, won’t and will not ever address their lack of accountability. Leading to the question of whether all of these issues were by design or incompetence. I feel this has now sealed theirs and our futures. The opportunity People, Ideas & Objects sees is that all of us can channel all of these people and Organizational Constructs into innovation, productivity, performance and profitability throughout the North American oil and gas industry. Tapping into their inherent motivations to capture a dynamic, innovative, accountable and profitable oil and gas producer and industry, focused on providing the most profitable means of oil and gas operations, everywhere and always. To enable a continued expansion of the deliverability and reserves to ensure North American energy independence for the lowest cost available to consumers. An industry where it will be less important who you know, but what you know and what you're capable of delivering, what the value proposition is that you’re offering?

Those interested in joining our user community are People, Ideas & Objects priority and focus. The Preliminary Specification, our user community and their service provider organizations provide for a dynamic, innovative, accountable and profitable oil and gas industry with the most profitable means of oil and gas operations, everywhere and always. Setting the foundation for profitable North American energy independence, everywhere and always. In addition, our software organizes the Intellectual Property of the exploration and production processes owned by the engineers and geologists. Enabling them to monetize their IP for a new oil & gas industry to begin with a means to be dynamic, innovative and performance oriented. Providing a new investment opportunity for those who see a bright future in the industry. A place where their administrative, accounting, exploration and production can be handled for the 21st century. People, Ideas & Objects have joined GETTR and can be reached there. Anyone can contact me at 713-965-6720 in Houston or 587-735-2302 in Calgary, or email me here. 

Oddly Enough, That's Not Much Different Than the Old Plan, Part IV

 With this plan of People, Ideas & Objects, we have a vision of how the new oil and gas industry will be rebuilt. There is much to be done for everyone who has an interest in the oil and gas industry and knows the critical role it plays in society. How the lack of profitability at the producer level devastates all those associated with it. And how truly damaged the North American industry is. Let's begin with two quotes that I find put in context the point where individuals, who see things this way, should look at this once in a lifetime opportunity. 

Vision without action is merely a dream. Action without vision just passes the time. Vision with action can change the world. 

Joel A. Barker

If your life's work can be accomplished in your lifetime, you're not thinking big enough.

Wes Jackson

It is here that I mention that the monetization of the rights to access People, Ideas & Objects software are considered our revenues for a variety of reasons. We are not offering an investment, we’re offering a software service. People, Ideas & Objects do not have the wherewithal to be offering an investment with the regulatory requirements that are needed for that. This is also not part of our future, desire or need. The right to access the software is the same process that is conducted when purchasing any software anywhere including on the Apple App Store or Google Play. Those that purchase our production rights are our customers.

We began asking some of the difficult questions around how our revenue model was going to operate with this new plan. Let’s start today’s discussion of who we see as the customers that would be interested in developing the Preliminary Specification and in turn gaining the rights to realize the upside of our value proposition in a dynamic, innovative, accountable and profitable industry. Where the new producers' administrative and accounting, production and exploration are all managed through People, Ideas & Objects, our user community and service providers software and services we’re building. If we included the population of those people who work in oil & gas and associated industries we would be accessing a valuable group of customers that know the in’s and out’s of the industry and are able to effectively deal with its issues and opportunities. If we include our user community and their service provider organizations then we would have that same positive influence. And they would have in addition to their part-time revenues as a user community member, their service provider organization as their primary operation of day to day activities and the opportunity to realize the upside of our value proposition. For the industry, all these people would make up a highly motivated group who were fully vested in the future success of oil and gas. 

In addition to our potential customers from throughout the oil and gas industry I believe we have some appeal to the disenchanted oil and gas investors who have left or will be leaving the industry. For them to realize the upside of our value proposition is something that they feel they should have realized for the past four decades. For investors to leave an industry is the ultimate message of displeasure which they began expressing in 2015. Contrary to what the old producers state today about them, they’ll not be returning when nothing has been done to correct the chronic lack of profitability, specious accounting and serious lack of accountability. When they see a solution where these problems are rectified, particularly in the disintermediated and creative destruction world that now exists, they'll return. 

For our customers to have the production rights that we’re granting. Which leverages our claim that it’s not enough to own the oil and gas asset anymore, you’ll also need access to the software that makes the oil and gas asset profitable. Which consist of simply the exclusive right to access the software of the Preliminary Specification from People, Ideas & Objects and the service provider organizations that manage it. Gives them the exclusive right to earn the upside of the value proposition that we’ve defined across the North American industry. Our customers would therefore earn profitable operations on the oil and gas assets they own. If they participated in the development of the Preliminary Specification and acquired rights to access the software without any asset ownership this would still entitle them to earn some of the value associated with the value proposition. Such as a right of access fee. 

This discussion brings up the topic of the overall size of our budget which is significant. Mostly due to the profits and royalties that I’ve defined for myself. These are based on the value proposition that the Preliminary Specification provides over the base case. Although this would be lower than those times such as last April when oil was negative $40. There is a history of the high value of the differential that was accepted by the bureaucrats. The cyclical nature of the “muddle through” strategy has prospered in my estimation for a total of 5 years over the past 35. 1986 being the beginning of when I’ve been able to document that overproduction by our good friends became a global issue in the oil markets. Although current commodity prices have put a bounce in the existing producers' step, the number of times we’ve been here before is in the dozens that have cumulatively made up all of those 5 good years. A failing behavior that is unaddressed and unresolved yet remains to be promoted as the key "muddle through" strategy across the industry. The consolidation exercise will end in tears as the “big is better” mantra discovers “the bigger they are the harder they’ll fall.” The customers we’re addressing here are usually the ones who realize the consequences of the producers past chronic inaction. I’ve proposed a solution that addresses these inherent behaviors, the motivations, the issues and organizations that are necessary to eliminate these difficulties.

Our solution, the Preliminary Specification deals specifically with the chronic lack of profitability in the industry and its associated issues of specious accounting. In late August 2021 People, Ideas & Objects we’re able to record that the producer bureaucrats can’t, won’t and will not ever address their lack of accountability. Leading to the question of whether all of these issues were by design or incompetence. I feel this has now sealed theirs and our futures. The opportunity People, Ideas & Objects sees is that all of us can channel all of these people and Organizational Constructs into innovation, productivity, performance and profitability throughout the North American oil and gas industry. Tapping into their inherent motivations to capture a dynamic, innovative, accountable and profitable oil and gas producer and industry, focused on providing the most profitable means of oil and gas operations, everywhere and always. To enable a continued expansion of the deliverability and reserves to ensure North American energy independence for the lowest cost energy is abundantly available to consumers. An industry where it will be less important who you know, but what you know and what you're capable of delivering, what the value proposition is that you’re offering?

Those interested in joining our user community are People, Ideas & Objects priority and focus. The Preliminary Specification, our user community and their service provider organizations provide for a dynamic, innovative, accountable and profitable oil and gas industry with the most profitable means of oil and gas operations, everywhere and always. Setting the foundation for profitable North American energy independence, everywhere and always. In addition, our software organizes the Intellectual Property of the exploration and production processes owned by the engineers and geologists. Enabling them to monetize their IP for a new oil & gas industry to begin with a means to be dynamic, innovative and performance oriented. Providing a new investment opportunity for those who see a bright future in the industry. A place where their administrative, accounting, exploration and production can be handled for the 21st century. People, Ideas & Objects have joined GETTR and can be reached there. Anyone can contact me at 713-965-6720 in Houston or 587-735-2302 in Calgary, or email me here.