They've Abandoned Their Responsibilities
As Artificial Intelligence advances, it is becoming increasingly evident that electrical energy is emerging as a binding constraint on its development and deployment in the United States. Electrical demand is, at its core, energy demand—no different in economic substance from oil and gas demand. As aggregate U.S. energy requirements rise, the strategic question is not whether demand exists, but why domestic supply leadership continues to retreat from it.
Against this backdrop, it is difficult to reconcile the behavior of self-described “shale innovators,” such as Continental Resources, abandoning U.S. shale in favor of jurisdictions such as Argentina. This is occurring precisely at a moment when domestic energy demand—driven by data centers, electrification, and industrial reshoring—should represent a structural advantage rather than a liability.
People, Ideas & Objects anticipated this outcome years ago. The long-term financial performance of U.S. producers has been consistently destructive, not cyclical. Since the inception of shale, the industry has accelerated and intensified systemic overproduction, compounding the deficiencies of the conventional business model rather than correcting them. The result has been predictable: sustained capital destruction, operational instability, and growing political friction—each of which I’ve documented extensively.
At this stage, the manner in which producers choose to exit—through divestiture, privatization, or geographic relocation—is largely immaterial. What matters is that the existing leadership model has reached its terminus. The industry now requires new leadership, a new organizational framework, and a fundamentally different operating logic. To that end, People, Ideas & Objects has developed the Preliminary Specification.
Through abdication, inaction, unresolved conflicts, and self-selection, the authority to act has effectively moved beyond incumbent producer leadership. Decisions regarding whether and how to proceed—particularly with respect to funding and adoption—now rest outside my direct visibility or control.
What is clear, however, is that continued delay carries national consequences. If the United States waits for legacy leadership—explicitly including Harold Hamm—to reverse course, the country will fail to secure affordable and competitive domestic energy supply. The downstream implication is a loss of U.S. economic leadership at precisely the moment when an industrial transformation, driven by Artificial Intelligence and electrification, should be a source of dominance rather than constraint.
This outcome is not the result of a lack of solutions. Shareholders raised concerns for over a decade. Viable alternatives have existed for nearly fifteen years. Offering solutions that would benefit producers financially, however they were summarily dismissed.
After years of disregarding shareholder discipline—culminating in privatization in Continental Resources instance—complaints that U.S. shale “cannot make money” ring hollow. The inability to generate returns is not a market failure; it is a strategic one. Domestic energy demand represents opportunity. Treating it as a reason to exit reflects a failure of vision, not economics.
The price system has been transmitting this signal since 1986. It has consistently indicated that the prevailing producer model does not generate sustainable profit. Rather than respond, the industry constructed an internal accounting mythology to justify continued capital misallocation. The result was the destruction of shareholder value and, ultimately, the erosion of the industry’s credibility.
Profit and loss exist precisely to prevent this outcome. They signal not only where capital should be deployed, but the urgency and scale of that deployment. Ignoring those signals does not suspend economic reality; it merely delays its consequences.
From a historical standpoint, the failure of North American oil and gas leadership constitutes one of the most comprehensive management breakdowns in modern industrial history. This outcome was not driven by regulation, politics, or subsurface constraints. It was self-inflicted—rooted in a persistent refusal to adapt organizational structures, economic models, and decision-making frameworks to changing realities.
For example, I have consistently argued that associated gas can no longer be treated as a secondary byproduct. Material volumes of gas are transported out of the Permian Basin and ultimately priced at Henry Hub. Despite raising this issue repeatedly, the industry has shown little interest in addressing the implications. That indifference is precisely what is concerning.
The relevant facts are straightforward:
While I do not have precise visibility into associated gas volumes alone, total natural gas production exiting the Permian exceeds 10 Bcf per day.
Once commingled, so-called “byproduct” gas is entirely fungible with gas produced from dedicated gas wells. Henry Hub makes no distinction—because there is none.
This practice contributes to structural oversupply at Henry Hub, driving wide differentials and, at times, negative pricing.
Henry Hub remains the clearing price and final settlement point for North American natural gas markets.
By definition, Permian gas volumes therefore influence pricing across the entire North American gas complex.
Treating associated gas as waste or incidental production is no longer a defensible assumption; it is a market distortion with continent-wide consequences.
There remains an opportunity to change course—but not under the assumptions, governance structures, or leadership paradigms that produced the current outcome. The Preliminary Specification is presented in that context: not as an incremental optimization, but as a structural alternative. I have identified the systemic failures and outlined practical solutions to address them.
I correctly anticipated that incumbent leadership would ultimately abdicate responsibility and exit. What I did not anticipate was the audacity to relocate to Argentina in order to preserve control over resources while abandoning accountability at home. That behavior is not leadership. It is precisely the failure mode the industry must move beyond if it intends to remain viable.
