Economics as Astrology

Richard Fernandez is right. Talking about economics in his Belmont Club blog, Fernandez raises many valid points in this recent post. A frequent contributor to Pajamas Media, he is responding to Paul Krugman’s comment that now is the beginning of a Third Depression. Fernandez equates Krugman’s comments to astrologist Madame La Zonga, he has a valid point. When Nobel Prize economists suggest that more spending of borrowed money will save us, it is economic voodoo.

The fact that experts cannot settle on the proper prediction suggests the model they use can give rise to multiple or even contradictory predictions, like a compass needle that spins with alacrity of the second hand of an analog watch. The physicist Frank Tipler says that with a compass like that you should start worrying. He argued that since Nobel Prize economists could manifestly rise only to the level of predictive competence of astrology, they should exhibit the same modesty as Madame La Zonga.

People, Ideas & Objects could be accused of falling for, or prescribing the same economic voodoo. We have relied heavily on the analysis of Professor Carlota Perez in predicting the economic environment that we now find ourselves in. A key difference between Krugman and Perez’ commentary is that Perez is looking at the historical record and suggesting patterns that have occurred before, and that are systemic over time. She is not suggesting a formula for how the future will unfold, only that in certain situations, history shows these events occur with predictable regularity. Krugman on the other hand, believes his prescription is the only valid remedy.  



Up until June 1, 2010 we have focused on the academic aspects of this project. Now, in phase two, we are focused on commercializing the research that has been undertaken. In our defense I would assert that we are actively providing a solution to what we see as happening in oil and gas. We have suggested that the oil and gas firm may be economically challenged unless they changed their key organizational construct to the Joint Operating Committee (JOC). If we look at the example of Shell, who recently completed a comprehensive restructuring of their organization, yet, based on today’s energy prices, are unable to earn a profit on their overall operations. This same scenario is, and will be played out across the industry. An industry that I have accused of muddling through as opposed to actively invoking the changes prescribed by adopting the Draft Specification. Fernandez notes.

Leaving economic policy to common sense might actually be the safer course. Wikipedia described an experiment in the 1980s which suggested that because macroeconomic models performed so poorly, the best course was often to leave well enough alone and muddle through rather than relying on ‘activist’ or ‘visionary’ prescriptions.

People, Ideas & Objects is based on the vision as described in the Draft Specification. Taking the situation at Shell, a prescribed course of further muddling-through might resolve their lack of profitability. On the other hand, using People, Ideas & Objects vision of using the Joint Operating Committee provides an alternative designed to solve exactly that lack of profitability. What was once an economic prescription, that being People, Ideas & Objects vision, was “speculation” on one of many of the possible outcomes of the industry. That speculation has now become the solution to what the industry is ailing from. Some would call this prescient, I call it lucky.



There are those areas (macroeconomics) of the economics profession that equate well with the astrological practices of Madame La Zonga. There are however, other areas (microeconomics) of the economics profession that are fact based, such as specialization and the division of labor, these are the areas that People, Ideas & Objects have focused on providing value.  Our prescribed solution may yet prove to be voodoo, however, I wonder what Shell thinks.



Society is put in peril when world oil production declines. There is evidence that the world's oil production has declined. Therefore the world needs to have the energy industry expand its production. To do so requires that we reorganize to enhance the division of labor and specialization within the industry. As has been proven, this reorganization could achieve far greater oil and gas production. Management of the industry is conflicted in expanding the output of the industry. The less they do, the higher the oil and gas prices and the better they appear to perform. This managerial conflict must be addressed and the performance of the industry unleashed. To do so requires the current management of the industry to fund People, Ideas & Objects and build the systems as defined in the Draft Specification. Please join me here.

Technorati Tags: People's Economics Organization Change

The Scope of the Application

In a recent post we talked about the scope of the development in terms of the Preliminary Specification. Today I want to discuss the scope of the application itself. It may seem that these are the same points, however, I think that there is enough of a difference to warrant this post.

To provide the innovative oil and gas producer with the software tools they need, the end user needs to be involved in the design and development of those systems. People, Ideas & Objects is focused on the end user in its developments. Organized around a comprehensive vision of how and what the systems consist of, the Draft Specification details the vision of the application. Organizing the user in these developments has been our priority throughout these developments. Anyone proposing the development of systems for innovative oil and gas producers would have to include the user in this manner. Yet People, Ideas & Objects is the only software developer that is focused on the user. Does SAP provide a comprehensive development of systems based on user input? Do the current bureaucracies believe the issues of the oil and gas industry can be solved without comprehensive user based software developments?


People, Ideas & Objects fills the traditional “ERP” or Enterprise Resource Planning classification of applications. It is a comprehensive solution designed to manage the operations of Joint Operating Committees and producers needs for accounting, administration and management. The Draft Specification defines the general framework of the application. It is anticipated that most, if not all, employees of a producer firm, the service sector and partners of Joint Operating Committees will have access to the application. The various disciplines that are employed in an oil and gas firm, geologists, engineers, landman, accountants and others are included in this definition.


In the People, Ideas & Objects software applications we seek to capture the ways and means of the optimal innovative oil and gas producer. The understanding of the industry is beyond the scope of a handful of contributors and involves the multiple disciplines noted earlier. The collaborative output of the application is well beyond the scope of one individuals understanding of the industry. Therefore clarification and compromise will be a necessary and difficult part of the process. Using advanced business techniques, focused on the conflicts and contradictions that arise, the output will resolve many of the issues within the industry and its application to the Draft Specification. This is a business design process that will involve literally everyone and anyone with experience and understanding of the oil and gas industry. More specifically it is a place where people can contribute their ideas and build their own service based offering in support of the innovative oil and gas producer and end users of the developing People, Ideas & Objects software.


Producer firms also have a critical role to fill in these developments. Their participation helps to define the applications scope of operations. Will the applications include the geographical regions of each area of operations of a producer firm? Will the applications include the types of oil and gas operations that the producer participates in. Without direct participation of the producers in funding and defining the scope of the application, the producer may or may not have all their regions and operations covered. This why the producer needs to participate in these developments now. With the Preliminary Specification set to start on January 1, 2011, and include the scope of the application, now is the time for producers to begin the process of supporting and participating in these developments.


Adding to the scope of the application is the market definitions of the producer firms targeted. The application is proposed to work for International Oil Companies (IOC’s), National Oil Companies (NOC’s), Independents and Start-ups. Using the Joint Operating Committee as the key organizational construct provides value for all producers in the industry. To preclude any market definition would unnecessarily limit the scope and value of the application. Joint Operating Committee’s include all types of producers. Producers need to participate in these communities and ensure their operations geographical and operational needs are met. If you have comprehensive operations, working within these communities at the onset provides real value.


Society is put in peril when world oil production declines. There is evidence that the world's oil production has declined. Therefore the world needs to have the energy industry expand its production. To do so requires that we reorganize to enhance the division of labor and specialization within the industry. As has been proven, this reorganization could achieve far greater oil and gas production. Management of the industry is conflicted in expanding the output of the industry. The less they do, the higher the oil and gas prices and the better they appear to perform. This managerial conflict must be addressed and the performance of the industry unleashed. To do so requires the current management of the industry to fund People, Ideas & Objects and build the systems as defined in the Draft Specification. Please join me here.

Technorati Tags: People's Collaboration Development Preliminary Management

McKinsey on Global Rebalancing

McKinsey have published an article that I think provides a good understanding of how our economy will be functioning in the near term. Entitled “Globalizations Critical Imbalances” it talks about the necessary adjustments in world trade and their implications. Coming from the point of view of the energy industry, I think this document shows the demand for energy will continue to increase substantially in the near term. Prices will be the means of allocating these finite energy resources and therefore the rewards to the innovative oil and gas producer will be substantial. McKinsey notes.

To some extent, the rebalancing of global economic activity from developed to emerging markets simply reflects economic laws of gravity. In a world where ideas can flow freely and countries are at different stages in adopting modern modes of production, communication, and distribution, less developed nations should grow more rapidly than their counterparts in the West as they catch up.

China, India, Brazil and others are providing substantial increases in the quality of life for their citizens. This naturally imputes greater volumes of energy will be consumed by these countries. Competition for energy resources will be extreme. How much of an increase in consumption and energy pricing is reflected in this next quotation.

The structural issue facing developed-world nations is that the amount of high-quality, high-productivity labor that will be mobilized over the next decade in Brazil, China, and India (not to mention Mexico, the Philippines, and Thailand) is likely to be measured in the hundreds of millions of people. By comparison, the entire US labor force comprises 150 million people. This is a wonderful trend for humankind and would be a boon for everyone in the world if emerging-market employment were directed largely toward production for domestic consumption. The challenge for developed-world governments and citizens seeking jobs, however, is that a significant fraction of this emerging-world labor displaces jobs that would otherwise be created in Europe, Japan, and the United States. This may be the underlying reason why unemployment in Europe, Japan, and the United States is becoming more structural rather than cyclical and may get worse over time no matter how much public stimulus is provided. Certainly, the job losses of the Great Recession look quite different from those of past recessions.

We are clearly not out of the woods in terms of the Great Recession. One of the best indicators of the world economies health has been the Baltic Dry Index. The costs to ship dry goods has fluctuated wildly during the last few years. Although the index has stabilized over the past few quarters, it remains substantially below the highs recorded prior to the beginning of the recession. (Note the recent decline in the index has been substantial.) McKinsey notes the difficult situation these global imbalances will cause various governments.

It is very difficult to say how these issues will play out. The global rebalancing that is needed is obvious: developed-world countries need to save more, consume less, become more fiscally disciplined, and run current-account surpluses (or at least be neutral). Emerging-world countries need to let their currencies rise until PPP rates are closer to financial-exchange rates. They need to consume more, save less, run current-account deficits (or at least be neutral), and continue investing, with some of the capital provided by outsiders. If major national governments work proactively together to rebalance and coordinate their fiscal, monetary, trade, and foreign-exchange policies, the adjustment process could be gradual.

The implications of this “rebalancing” may appear dire to those in the developed economies. I think the opportunities will be substantial and the challenges significant. Those that are able to innovate, and particularly the oil and gas producers, will realize many benefits. Realization that we are no longer in the “low cost” era of the energy industries past. Changing from this past mindset to one that can profit from these types of economic forces requires the changes that are contemplated in the Draft Specification.

The underlying global economic processes under way are very powerful, and the profit opportunities will be enormous as four billion people in emerging markets triple or quadruple their incomes and wealth over the next 20 years.

McKinsey are specific on how companies should position themselves for these changes. Oil and gas firms need to adopt these and other recommendations. It is foolhardy to think that these economic challenges and opportunities can be handled by the existing bureaucracies. Innovative oil and gas producers need to begin the process of addressing these opportunities by acquiring the software development capability of People, Ideas & Objects and begin the development of these software applications.

These suggestions represent specific applications of the more dynamic management approach I have urged companies to adopt in the past. The hallmarks of that approach—heightened awareness, greater resilience, more flexibility, and the timely alignment of leadership around needed adjustments—will be invaluable for companies as they navigate the choppy waters of global economic rebalancing. This process will continue and perhaps even accelerate in the years ahead, not despite, but because of the structural adjustments that are needed to put the global economy on a more sustainable trajectory.

Society is put in peril when world oil production declines. There is evidence that the world's oil production has declined. Therefore the world needs to have the energy industry expand its production. To do so requires that we reorganize to enhance the division of labor and specialization within the industry. As has been proven, this reorganization could achieve far greater oil and gas production. Management of the industry is conflicted in expanding the output of the industry. The less they do, the higher the oil and gas prices and the better they appear to perform. This managerial conflict must be addressed and the performance of the industry unleashed. To do so requires the current management of the industry to fund People, Ideas & Objects and build the systems as defined in the Draft Specification. Please join me here.

Technorati Tags: People's McKinsey Economics Change China Innovation Strategy

The Division of Labor

The question has been asked, how does the Draft Specification implement a renewed division of labor and specialization? This is a good question, and one who's answer is not fully described in the Draft Specification. I want to be mindful that I don’t interfere in the development of the Preliminary and subsequent specifications. These developments are user driven developments, for me to interfere by commenting on certain aspects would have serious consequences. Users need to know it is they who have the power to make the changes they need. I see this question as being a further clarification of the Draft Specification, and since there are no developments currently being conducted, I do not see any risk in answering this question at this point in time. I will however mention that my perspective may be limited, that the community will be able to add substantially to these points.

To revisit why the division of labor and specialization are important to the oil and gas industry. It simply is the sole source of any economic development. As time passes and the reorganization of industries continues, a further division of labor through greater individual specialization increases the economic output of fixed resources. Therefore to increase the volume of oil and gas production, it is necessary to reorganize the industry based on a more defined division of labor. In this globalized economy, the need to employ software to manage the division of labor is a necessity. The energy industry therefore needs a software development capability, such as that offered here by People, Ideas & Objects, to expand its output.

In our recent review of Professor Langlois we stumbled upon the solution to this difficult question. Recall his words were “gap-filling” in terms of Industrial Districts and Business Groups. The filling of gaps is the process of identifying areas where work needs to be done. The process of going about and filling those gaps is how the division of labor is expanded.

The primary People, Ideas & Objects software modules that enable the identification of gaps is in the Resource Marketplace, Knowledge & Learning, Research & Capabilities modules and the Military Command & Control Metaphor. The Draft Specification is silent on this capability and as I mentioned earlier, this posts content should be considered clarification and possibly an addition to the spec.

Imagine for a moment that the Joint Operating Committee (JOC) has a distribution of the people that are assigned specific tasks to be completed. These can be seen as within the Military Command & Control Metaphor (MCCM) that details the organization and the roles and responsibilities of the people involved. Imagine for a moment that the makeup of the MCCM in the JOC can be compared to a “template” of the optimal distribution or known division of labor. A software driven comparison of the two charts, the MCCM to the template, shows the “gaps” that need to be filled. This same analysis could also be applied in the same fashion for the roles and responsibilities of an individual producer.

How much of this analysis is unique and confidential to the applicable JOC or producer is unknown at this time. It is reasonable to assume that their might also be prototypical industry division of labor templates that are developed within the Community of Independent Service Providers. Where members of the CISP have specialized in increasing organizational output through analysis of the division of labor of JOC’s and producers.

Society is put in peril when world oil production declines. There is evidence that the world's oil production has declined. Therefore the world needs to have the energy industry expand its production. To do so requires that we reorganize to enhance the division of labor and specialization within the industry. As has been proven, this reorganization could achieve far greater oil and gas production. Management of the industry is conflicted in expanding the output of the industry. The less they do, the higher the oil and gas prices and the better they appear to perform. This managerial conflict must be addressed and the performance of the industry unleashed. To do so requires the current management of the industry to fund People, Ideas & Objects and build the systems as defined in the Draft Specification. Please join me here.

Technorati Tags: People's Langlois Organization Community Military-Command Specification

Positions, positions and more positions.

First of all, let me note for the record, we are not in a position to hire anyone. We have no financial support from the industry and expect no one to have to incur any risk in the development of these systems. There are times when writing this blog seems like I have become completely delusional, this is one of those posts. The purpose in mentioning these positions is to provide the readers of this blog with an understanding of where and how they may be able to fit into the developments, when they are funded.

In past blog entries we have been able to list a small number of positions that are involved in the development of the application. These previously noted positions are as follows.

Product Owner

When we begin development, we will be looking for these somewhat new and interesting positions. With the number of development teams approaching the low twenties, each with their own Product Owners, we will be looking for a large number of people to fill these positions.

In a previous blog post, we documented some of the work that is carried out by Product Owners.

Account Manager

A little bit of chaos never hurt anyone. Too much chaos and we run the risk of disrupting the communities involved in this development. That’s what the Account Manager position is designed to deal with. Ideally these people are seconded from the producer firms that they will represent as an Account Manager. In a previous blog post, we documented the work of the Account Manager.

Agile Team Business Analyst

We highlighted the Agile Team Business Analyst position in another recent blog post.

We also have the following executive positions available, when we are funded that is.

Chief Financial Officer

As all good firms have, financial management is an inherent part of success. As someone who has been a CFO, I have a strong perspective on the position. The CFO of any firm has to be the one that is ultimately responsible for the financial success. And they have the power necessary to make this so.

A difficult task of this position will be the compensation provided to the Community of Independent Service Providers. That is to say with so many participants in the development and the CISP, managing the work flow of these communities will be an important aspect of the success of this position.

Chief Operating Officer

Keeping all the balls in the air is the skill that these people provide their firms. COO’s have the ability to anticipate the needs of the organization and prepare the way for the smooth implementation of those capabilities.

Vice-President Development

Heading the software development effort of People, Ideas & Objects will be the responsibility of this position. From managing the “Agile” development team, which is expected to grow to 300 developers, to maintaining the development tools. This position is responsible for anything and everything to do with the software.

Since we are an Oracle customer, this person will need to be well versed in those technologies. Recall that our strategy regarding Oracle is that we use their technologies from stem to stern. It would therefore be incumbent on this position to use the Oracle resources to the utmost. Having a large team of Oracle developers and consultants would therefore be expected to be employed by the Vice-President Development of People, Ideas & Objects.

Vice-President Community Development

Working with the resources as presented by the Community of Independent Service Providers. This person will need to ensure the CISP develops in the best interests of the innovative oil and gas producers. The Account Manager positions noted earlier in this post will also report to the Vice President Community Development. Therefore there will be a large emphasis on policies and procedures to ensure these large populations of people are prepared, motivated and capable of meeting the demands of the innovative producers.

Vice-President Business Development

We are committed to the oil and gas industry as software developers. We are not, and will not entertain the thinking that we can provide service to other industries. With this in mind, the Vice-President Business Development is seen more as a resource that is available to the executive team. Added bench strength in areas of issues and opportunities will serve the firm and the innovative oil and gas producers well.

Vice-President Infrastructure. 

I had previously detailed the hardware policies and procedures of People, Ideas & Objects. The oil and gas industry is expected to provide the individual to head the hardware infrastructure to run the People, Ideas & Objects software applications. This is done to ensure they have the means to have their applications run in a manner that is consistent with their compliance and governance needs.

The president of the hardware firm is also the Vice-President Infrastructure for People, Ideas & Objects. As a member of the team this individual will have to have an intimate understanding of the software and its needs.

Director Research

When you look at the organizational chart in this post. The position of Vice-President of Research is held by myself. The Director Research position therefore needs to be capable of working with me to guide the firm on its long term path.

Members of the Community of Independent Service Providers

And one’s imagination is the only limit to the types of work that can be done as a member of the Community of Independent Service Providers.

One of the attributes of the work at People, Ideas & Objects is the range and scope of understanding. We need to know the business of the oil and gas industry, the advanced hardware and software technologies and the academic sciences of organizational economics as well as other disciplines. A very challenging and rewarding group of positions in these fast paced times.

Society is put in peril when world oil production declines. There is evidence that the world's oil production has declined. Therefore the world needs to have the energy industry expand its production. To do so requires that we reorganize to enhance the division of labor and specialization within the industry. As has been proven, this reorganization could achieve far greater oil and gas production. Management of the industry is conflicted in expanding the output of the industry. The less they do, the higher the oil and gas prices and the better they appear to perform. This managerial conflict must be addressed and the performance of the industry unleashed. To do so requires the current management of the industry to fund People, Ideas & Objects and build the systems as defined in the Draft Specification. Please join me here.

Technorati Tags: People's Business-Analyst Account-Manager Community Product-Owner Organization

Scope of the Preliminary Specification

We have therefore established January 1, 2011 as the commencement of the development of the Preliminary Specification. What does this involve and what are the objectives of the specification? This post will provide a general outline of the work that will be done during 2011.

Firstly we should establish what a “collaboration” is. In many instances the terms collaboration and consensus get confused. I see these as two distinctly separate terms. What I feel happens is a group will define what a consensus is by determining what the majority will agree to. On the other hand, a collaboration is the hard work of determining what is the optimal solution. Collaboration is a process that achieves breakthroughs and discoveries.

The Preliminary Specification is a consensus of the producer community. It is important to have the input of subscribing producers to define the overall scope of the application. If a producer has operations in the Gulf of Mexico, extensive NGL or heavy oil operations they should ensure that the Preliminary Specification’s scope captures those requirements. If they don’t actively participate to define their needs within the application, at the commencement of this development, it will be significantly more difficult to assert their needs in subsequent iterations of the development.

The Preliminary Specification is a collaboration of the end user community. These are the people who will need to use the application. They are the best resource to define the application process and functionality that they need to do their jobs. It is their tacit knowledge that is and will be employed in the oil and gas industry. Tacit knowledge can not be captured and employed by computer systems. What users can do is build the software tools they need to deploy their tacit knowledge. Collaborating to define and discover what tools would work best is therefore their responsibility. No one else can do this critical definition for the user community.

The Preliminary Specification is a collaboration of the Community of Independent Service Providers (CISP). This group of individuals, teams and firms are the glue that holds the developers and the users together. They are resources that provide the users with the delivery of their software tools.

The Preliminary Specification has been previously defined as 100 People years of effort. The population of users, producers and CISP participants in making up this 100 People years is very large. In the several thousands. The larger the participation, the better the output of the specification will be. In essence we are trying to capture as many of the ideas that are available in the various communities, the needs of the producers, determining which are the breakthrough discoveries and settling on a scope of functionality of the application. A quotation of Version One defines this as breadth of the application.

To effectively deal with scope on an Agile project, specifications must be considered in two dimensions: breadth first and then depth. It is essential that we understand the breadth of what we want to build early in the project. Dealing with the breadth of the solution helps the team understand scope and cost and will facilitate estimating and release planning. The breadth of a project begins to frame the boundaries of the project and helps to manage the organization’s expectations. Looking at the breadth of the requirements is a much smaller investment of time and resources than dealing with the entire depth. The details are most likely to evolve as we progress through the project so defining them early has less value.

The two constraints placed on the Preliminary Specification are they must use the Draft Specification as it's starting point and be focused exclusively on the business of oil and gas. Technology is not part of this specifications deliverable. The depth of the application will be determined during the Detailed Specification.

Society is put in peril when world oil production declines. There is evidence that the world's oil production has declined. Therefore the world needs to have the energy industry expand its production. To do so requires that we reorganize to enhance the division of labor and specialization within the industry. As has been proven, this reorganization could achieve far greater oil and gas production. Management of the industry is conflicted in expanding the output of the industry. The less they do, the higher the oil and gas prices and the better they appear to perform. This managerial conflict must be addressed and the performance of the industry unleashed. To do so requires the current management of the industry to fund People, Ideas & Objects and build the systems as defined in the Draft Specification. Please join me here.

Technorati Tags: People's Agile-Scrum Budget Collaboration Development Preliminary

Energy demand in 2030

An interesting comment is made on the BBC regarding the projected 2030 demand for energy.

Oil found in deep waters is needed because the world will need 45% more energy by the year 2030, BP's chief of staff, Steve Westwell, earlier told the World National Oil Companies Congress.

The past five years has seen the global production of oil stall at around 85 million barrels per day. And in 2010 we know that global oil production has declined by one million barrels. Therefore it would seem this comment appears rather optimistic.

How will producers increase production by 45% in the next 20 years when they haven’t been able to sustain 2005 production volumes. Is it expected that the bureaucracies will suddenly begin to substantially outperform their recent past?

The appropriate thing we need to do is to begin the development of systems that define and support the innovative oil and gas producer.  Systems that use the Joint Operating Committee in the manner that is described in People, Ideas & Objects Draft Specification.

To approach a problem of this magnitude, of meeting the markets demand for energy, without first organizing ourselves for the challenge will only lead to disaster.

Society is put in peril when world oil production declines. There is evidence that the world's oil production has declined. Therefore the world needs to have the energy industry expand its production. To do so requires that we reorganize to enhance the division of labor and specialization within the industry. As has been proven, this reorganization could achieve far greater oil and gas production. Management of the industry is conflicted in expanding the output of the industry. The less they do, the higher the oil and gas prices and the better they appear to perform. This managerial conflict must be addressed and the performance of the industry unleashed. To do so requires the current management of the industry to fund People, Ideas & Objects and build the systems as defined in the Draft Specification. Please join me here.

Technorati Tags: People's Energy, failure, Innovation, organization

Start Date

It might be reasonable to establish a start date in which we could look forward to beginning the next step in our developments. That being the development of the Preliminary Specification. Therefore, you should mark your calendars for January 1, 2011. That is when the development of the Preliminary Specification will begin. People who are interested in becoming members of the Community of Independent Service Providers (CISP), and participate directly in the Preliminary Specification, should begin the development of your proposal as soon as possible. We will begin accepting applications August 31, 2010.  


It would be ideal to have as many people as possible involved in the development of the Preliminary Specification. Therefore, special emphasis should be placed on the marketing aspects of your proposal, as all the other CISP members, users and producers will be able to view the wiki, where they are stored with the specifications deliverables, starting January 31, 2011. Users and producers would then be able to contact CISP members to have their ideas, participation and needs defined through the CISP membership.


Society is put in peril when world oil production declines. There is evidence that the world's oil production has declined. Therefore the world needs to have the energy industry expand its production. To do so requires that we reorganize to enhance the division of labor and specialization within the industry. As has been proven, this reorganization could achieve far greater oil and gas production. Management of the industry is conflicted in expanding the output of the industry. The less they do, the higher the oil and gas prices and the better they appear to perform. This managerial conflict must be addressed and the performance of the industry unleashed. To do so requires the current management of the industry to fund People, Ideas & Objects and build the systems as defined in the Draft Specification. Please join me here.

Technorati Tags: People's Development Phase-Two Preliminary Specification CISP
 

Phase Two

It has been an interesting June so far. What I see happening in the marketplace is quite remarkable. Discussion of the financial difficulties that oil and gas producers are having can be cited daily. Margins are thin, and in some instances, negative. Reserves and production profiles are in decline, while capital expenditures are ever increasing. The basis of this project has always been the volumes of earth science and engineering effort in each barrel of oil equivalent has and will continue to increase. To approach this issue, producers need to reorganize the fixed volume of human resources in order to achieve greater output and capabilities. Organize around the Joint Operating Committee as suggested in People, Ideas & Objects Draft Specification. The time for this project to be fully funded and begin developing the Draft Specification is near at hand. This is why we now need to shift to phase two of this project.


Phase one has been the research and development of the Draft Specification and associated attributes. In the first half of 2010 we have been fortunate to be able to conduct a fairly comprehensive review of the research that went into the Draft Specification. This review for all intents and purposes has ended. Academically proving the basis of the Draft Specification was valuable, now we need to shift gears and get on with the business of People, Ideas & Objects.


After a two week hiatus, I have posted a number of entries that intimate some of the changes that need to be made. This is the beginning of the “commercialization” of the Intellectual Property (IP) contained within this project. Although I am hesitant to prepare a budget and plan for how this project proceeds, these may be possible in the fourth quarter of 2010. The majority of the material being developed for that budget and plan generated from the entries that are written here in the next few months.


What is necessary now is for the producers to begin actively supporting this project. To sit back and wait until someone delivers a software application that meets your needs will be a long and lonely waste of time. To suggest that you can have systems that meet your needs without your direct involvement is foolish. The industry has to financially commit and actively participate in the communities that are an inherent part of these developments.


I don’t expect this transition from Phase one to two will necessarily be easy. It would be of great assistance if those that read this blog were to begin their own action plans. Plans on how they could participate and encourage the firm they work for to join in these developments. One of the difficult aspects of this second phase is the scope of the effort is very large. Not much will happen unless everyone gets involved.


Society is put in peril when world oil production declines. There is evidence that the worlds oil production has declined. Therefore the world needs to have the energy industry expand its production. To do so requires that we reorganize to enhance the division of labor and specialization within the industry. As has been proven, this reorganization could achieve far greater oil and gas production. Management of the industry is conflicted in expanding the output of the industry. The less they do, the higher the oil and gas prices and the better they appear to perform. This managerial conflict must be addressed and the performance of the industry unleashed. To do so require the current management of the industry to fund People, Ideas & Objects and build the systems as defined in the Draft Specification. Please join me here.


Technorati Tags: People's Phase-Two Change development User Community CISP
 

Approaching regulatory issues

Many of the ways that problems are solved in the Draft Specification might lead to issues with the current regulatory frameworks. This should be expected. We are building a system that is designed and intended for the 21st century. Retrofitting 20th century regulatory frameworks into these systems is going to create some friction. Where conflict and contradiction exist, creative and innovative solutions can begin.

We have a variety of ways to deal with these issues, if and when they arise. We can take the literal interpretation and implement the compliance feature in much the same way they would be implemented today. We can design new and innovative ways in which compliance can be achieved and alternatively we can influence and change the compliance framework itself.

Of these three different approaches we should aspire to attain better compliance and governance of the producer and market firms. This clean slate approach is one of the advantages that we acquire, we should optimize it. Sounds like a job for the Community of Independent Service Providers.

Society is put in peril when world oil production declines. There is evidence that the worlds oil production has declined. Therefore the world needs to have the energy industry expand its production. To do so requires that we reorganize to enhance the division of labor and specialization within the industry. As has been proven, this reorganization could achieve far greater oil and gas production. Management of the industry are conflicted in expanding the output of the industry. The less they do, the higher the oil and gas prices and the better they appear to perform. This managerial conflict must be addressed and the performance of the industry unleashed. To do so requires the current management of the industry to fund People, Ideas & Objects and build the systems as defined in the Draft Specification. Please join me here.

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