Competing Based on Intellectual Property

One area that the bureaucracies “Behemoth” solution will be unable to compete with People, Ideas & Objects Preliminary Specification will be on the use of the Joint Operating Committee as the key organizational construct of the innovative and profitable oil and gas producer. They will have to find some other organizational construct in which to use to build into their systems. Using the Joint Operating Committee is part of my Intellectual Property (IP)and I certainly am not granting them any right to use any part of it. And that goes for all of the IP in the Preliminary Specification, the business model and anywhere else they may find it within the pages of this blog or elsewhere. This IP is the product of ten years of dedicated research, derived from twenty five years of oil and gas experience. If they want to compete with Behemoth, then I believe they need to begin with the process of the ten years of research. That’s ten years after they come up with an organizational construct. And remember there are no shortcuts in conducting your research.

So the starting line to this fight is a little staggered in my favor. I have been in the business of software development for oil and gas ERP systems for twenty two years. And I have seen their power in terms of what they can do through effective business models and software developments. The Preliminary Specification is a reflection of this. Intellectual Property is a key aspect of the strategy that People, Ideas & Objects used to undertake the research in the past decade. That was the manner in which value would be built over the long term. Not through hard assets, but through IP. We now have a competitive offering and will enforce these standards on our competitors.

When I first began developments in 1991 I have to admit it was a bit of the wild west in terms of IP. If you had anything of value it was taken, copied and used by everyone that could get their hands on it. Today it’s a fundamentally different situation. One in which IP is recognized as the building block of the new economy. One where IP is the cornerstone of some of the largest corporations in the world. The management of IP is as a result far more easier to assert than in 1991. The following are some of the administrative steps that we have taken to assure that our IP is recognized.

Everything is published on the web. Either through our blog or our wiki all of the research and material that has been written is available to be viewed. There you can see the genesis of the ideas of how the Preliminary Specification originated from the idea of using the Joint Operating Committee as the key organizational construct.

Secondly, since we were engaged in a protracted and unfriendly battle with the bureaucracy. This occurring throughout the decade we were conducting our research. And since they sponsored two initiatives to compromise our IP, we advised the CEO’s of the major’s, independents and a few other firms of our IP, its origins and the time frame in which it was developed. It was therefore inappropriate for them to proceed once provided with notice. We also advised the two research firms of our competing solutions which caused those projects to be terminated.

We also advised the major developers SAP, Oracle etc. of our IP and that it was not in their interests to be involved in any developments that breached our IP. With their firms being derived from IP themselves it was something that they respected and understood.

To deal with the issues of the oil and gas industry we have the opportunity to work on the Preliminary Specification tomorrow, as in June 13, 2013. Or you could join the yet unannounced “Behemoth” project which would have at least a decade of research to undertake and be of some unknown form to the industry. A choice that has definite implications to the future of the oil and gas industry.

The Preliminary Specification provides the oil and gas producer with the most profitable means of oil and gas operations. People, Ideas & Objects Revenue Model specifies the means in which investors can participate in these user defined software developments. Users are welcome to join me here. Together we can begin to meet the future demands for energy.

And In This Corner

Having been responsible for the 2012 opportunity costs of $67 billion. And being shown the way in which to resolve the natural gas pricing issues in the industry. The bureaucracy will need to show some resolve that they too are on the job. That is why they will put up the fight with People, Ideas & Objects and our Preliminary Specification. And we should expect that fight to be one in which their attempts will be to talk over us as the premier method that they take us on. It’s not that they will have a vision of what they are offering. It will be technologically focused, probably SAP derived, cloud computing solution. But there will be no mention of any of the business issues in the industry or discussion of how those issues are going to be dealt with. There will be no Preliminary Specification in which to turn to.

To go forward in 2013 and 2014 without any solution to the problems in the industry when the industry is experiencing such quantifiable and qualifiable difficulties would be irresponsible even for the bureaucracy. With the evidence of the Preliminary Specifications ability to resolve the issues in industry with Information Technology. The bureaucracy will assert an Information Technology based solution. Without any vision, specifics, details or ideas on how to solve the problems they are facing. They will commit vast resources to resolve those details and come up with the ideas necessary. The point is when they are called on to explain the losses in the natural gas side of the business, they will be able to say they have an Information Technology solution under development to resolve those issues. And hence buy themselves a few more years of salary and pension plan vesting.

But that’s not the real plan. The real plan is to show a concerted effort in making these systems, only to have them ultimately fail. That will be the fatal blow that is needed to deal with the likes of People, Ideas & Objects. A systems development failure that proves that these types of systems don’t work would set the bureaucracy in the driver seat for a few more decades of power. This could be so easily done the bureaucracy would be fools not to make this their premier strategy in dealing with People, Ideas & Objects. I would expect to see something being announced as early as the fall of 2013. We should also give it an appropriate code name to refer to it in the future. Let’s call it Behemoth.

And there will be other strategies used in addition to the bureaucracies Behemoth to fight us. Our primary appeal is to the investor of the oil and gas industry in terms of raising the funds for development. It will be here that the bureaucracy will focus their energies on attempting to disrupt our resources. It is the attention that we seek and are garnering from this constituency that has the double edge sword of concern for them. It raises the resources for us, and diminishes the perception of the incumbent and their current performance in the industry. They need to be very careful how they travel through this minefield as it is not something that they can easily defend in terms of their own record, or as to their purpose in disrupting our activities.

Ignoring People, Ideas & Objects and hoping it will go away hasn’t worked. And doesn’t look like it will work in the future. This strategy has seen us come up with a strong vision which is now the appropriate solution for the industry at the appropriate time. It’s time for the bureaucracy to rethink and redeploy on this strategy. It will be interesting to see what they come up with. I don’t think they're so dumb as to attack it. But you never know.

And what is all this talk of fighting about. Why wouldn’t the bureaucracy just adopt the Preliminary Specification and begin the developments right away. This last point is the fairy tale. With $67 billion per year on the table, a fight this will be.

The Preliminary Specification provides the oil and gas producer with the most profitable means of oil and gas operations. People, Ideas & Objects Revenue Model specifies the means in which investors can participate in these user defined software developments. Users are welcome to join me here. Together we can begin to meet the future demands for energy.

A Solution Whose Time Has Come

Our last few posts have shown that the bureaucracy has failed. That they are leaderless and do not change. Particularly at the scale necessary to rectify the difficulties in the natural gas marketplace and other areas of the oil and gas business. And in a somewhat unrelated point we recently noted that there is an implied guarantee that People, Ideas & Objects will be capable of completing the Preliminary Specification once we commence developments. A solution whose time has come.

The difficulty, or impediment now to having these software developments take place is the speed at which the marketplace takes up the Preliminary Specification. This however is 2013 and not 1999. Now that the marketplace is ripening in terms of the issues becoming prevalent. Solutions will be sought out and those solutions that are available will be evaluated. And its not just the natural gas pricing issues that the Preliminary Specification resolves. Moving the compliance and governance frameworks of the hierarchy into alignment with the Joint Operating Committees legal, financial, operational decision making, cultural, communication, innovation and strategic frameworks. Allows the producer firm and Joint Operating Committee to operate in a natural manner. Where speed, innovativeness and accountability are the result. Where all the issues in the industry can be approached with fresh and innovative solutions.

I see a point in time in the future where the full specification of the Preliminary Specification is operating within the industry. Things happen fast in the marketplace today and I think things will happen fast for us now. Something has to happen, an IT driven revolution is happening in every industry. It is desperately needed in the oil and gas sector. SAP doesn’t have a vision. And I am offering the vision that is provided in the Preliminary Specification. We know the bureaucracies choice is SAP and it is the dominant application in oil and gas today. And SAP is the bureaucracy. So the choice is rather stark with the future of the industry held in the balance of which IT application it uses. Who would have thought.

So I don’t see it as a matter of choice as to which system the industry will choose. It will be a bit of a struggle between the bureaucracy and their use of SAP vs the rest of the industry and the Preliminary Specification. One of them will win this conflict and be accepted as the ruling application in the oil and gas industry. It will be an interesting time. And not a fair fight. The bureaucracy have control of the budget and have used it to their benefit effectively in the past. You can expect that they will do so again. I would expect to see that they will prematurely announce victory. Along with a list of promotions and announcements designed to feign support and direction for an SAP application that will “solve” the industry problems.

And we’ll continue as we have since August of 2003. For that is when the idea of using the Joint Operating Committee came to me and we began this adventure. I see the battle lines being drawn by the bureaucracy. They have much to lose. If it’s a battle that they want it’s a battle they will get. So let the battle begin.

The Preliminary Specification provides the oil and gas producer with the most profitable means of oil and gas operations. People, Ideas & Objects Revenue Model specifies the means in which investors can participate in these user defined software developments. Users are welcome to join me here. Together we can begin to meet the future demands for energy.

What is Failure?

We have been discussing the situation in the natural gas pricing marketplace and the response over the past few years of the bureaucracy. We have discussed the makeup of the marketplace and the nature of the shale gas formations prolific characteristics could keep the natural gas marketplace in a similar situation for the foreseeable future. We have discussed the nature of the losses that are being incurred by the bureaucracies and contrasted those to the changes in the Preliminary Specification and how it works to mitigate the $67 billion in 2012 opportunity costs. What would we therefore define as failure in the natural gas marketplace and when would it be determined?

Declaring that the bureaucracy has failed would be a significant claim. It would need to be able to be proven, both qualified and quantified. It would have to be asserted that the existing situation would persist and could not be mitigated as a result of the current administrations actions. The failure would have to have a material impact on the business. Failure would require the actions of others to step in to offset the financial impact of the failure. And failure would see the lack of planning and budgeting to offset any future failure. So lets determine if the bureaucracy has failed with respect to its management of the natural gas business.

Lets first look at the quantifiable aspects of the situation. In 2012 the opportunity costs were determined to be $67 billion. As it stands in 2013 the natural gas prices are generally higher than they were in 2012, however, its still only June and we are counting opportunity costs as there are losses on operations in almost all instances at the current prices. The present value of continued losses on operations over a ten year time period bring the value of a solution to this problem into the stratosphere. More value can be earned by solving this issue than can be generated by conducting any other operation in oil and gas today. So from a quantifiable point of view the operation of the natural gas business today, by the bureaucracy, is a failure.

What about the quantifiable aspects. Are there plans in place to deal with the situation and remedy the losses to fix the issue. Can the issue be fixed. As we detailed yesterday if the producer shuts-in production, their overheads are fixed, which lead to larger losses on their operations. In a competitive capital environment they feel the best situation is to produce at capacity, and hence limit their losses. What they are in fact doing is saturating the natural gas marketplace, but that is a situation that they claim they have no control over. So the situation continues with the production at capacity and no plans to deal with the losses that continue. That is except to continue to hope for a cold winter. A fundamental failure to act in its own best interests.

Expecting others to step in to offset the losses is inherent in the bureaucracies mindset. Discussion about cash flow and operating profits divorce themselves from accountability towards their performance in terms of the capital invested. Capital was invested yesterday and is not relevant to today’s performance, so we have left it out in our current discussion, they will say. This is a dishonest and corrupt discussion that shows the state of affairs in the industry and is designed to avoid the discussion of the real issues. Losing money. What they hope to achieve by doing this is to fool prospective investors that they are a good investment so they can live off their capital for a little while longer. Kind of like a ponzi scheme. Expecting others to step in to cover for your failures is a clear sign or indication of that failure.

It is clear from these points then that we have proven, from both a quantifiable and qualifiable basis that the bureaucracy in the natural gas business has failed. Will continue to fail and has no plans or capability to stop failing. There is no question that at this point in time, we can say the bureaucracy has failed.

The Preliminary Specification provides the oil and gas producer with the most profitable means of oil and gas operations. People, Ideas & Objects Revenue Model specifies the means in which investors can participate in these user defined software developments. Users are welcome to join me here. Together we can begin to meet the future demands for energy.

Bureaucracies Don't Change

When it comes to transitioning from the current corporate model to the business model defined in the Preliminary Specification. One thing we do know for certain is that bureaucracies don’t change and they are leaderless. Expecting a solution to the current natural gas pricing situation from the bureaucracies will leave people disappointed and losing money. We are entering our third year of depressed natural gas prices and the bureaucracy have not even identified it as an issue. They are more interested in the point in time when their pensions are fully vested. The fact that the changes proposed in the Preliminary Specification would have increased profits in 2012 by $67 billion seems to inspire little more than a guilty shrug from the bureaucrats.

People, Ideas & Objects have a solution to the natural gas pricing difficulties that are currently being experienced, and those that are in the future. The Preliminary Specification enables the producer to remove the marginal production from the marketplace until prices rise to the point where they will provide an appropriate return. During the time that the property is shut-in, no losses on those operations are incurred due to the fact that all production and overhead costs are variable and based on whether there is production.

The Preliminary Specification uses the decentralized production model to ensure that all costs are variable. By reducing the profitable and innovative oil and gas producer to the C class, earth science and engineering, some support and legal resources. With the remainder of the traditional resources deployed in service providers who are focused on a process, or part of a process, across the industry. These service providers are then able to provide the traditional production and overhead costs and services directly to the Joint Operating Committee. Then if the property is shut-in for the month none of the charges for overhead or production are incurred or charged to the Joint Operating Committee.

When none of the charges are incurred for production and operations to the Joint Operating Committee then no loss on operations is incurred. Only the costs of capital are uncovered during times when production is shut-in. Losses, which are being incurred in today’s marketplace, have to be added to the reserves costs to be made up for with even higher prices in the future. By shutting in the property, under the Preliminary Specification, the producer is minimizing their losses and saving the reserves for when the prices will provide a return.

In the current environment if the bureaucracy did have the sense to shut-in production to remove the excess production from the natural gas marketplace. They would still have to deal with the staff levels they have. No changes to the current staffing would happen in the current high throughput production model that is employed today. Therefore incurring higher losses on operations as a result of any shut-in production. Is it any wonder why producers produce at capacity.

It could be argued, and it is partially correct that in this process of moving from the high throughput production to the decentralized production model. The oil and gas industry is moving the burden of controlling their overhead costs from their own administration to that of the service providers. That is true and the service providers will have to ensure that they are providing the lowest costs services to the Joint Operating Committees that employ them. However, the service providers will also have the capability to deal with those costs in a far better manner than the producers will have been able to deal with them.

The use of software automation, specialization and division of labor are all able to be used more effectively by the service provider than by the producer. Using the industry as their client base they are able to specialize and divide the labor across a larger scope and scale of processes. And with a dedicated software development capability provided by People, Ideas & Objects they will be able to continually evolve their service offerings based on the software changes they desire.

The Preliminary Specification provides the oil and gas producer with the most profitable means of oil and gas operations. People, Ideas & Objects Revenue Model specifies the means in which investors can participate in these user defined software developments. Users are welcome to join me here. Together we can begin to meet the future demands for energy.

A Guarantee

The Preliminary Specification presents a business model to the oil and gas industry that provide for profitable and innovative oil and gas operations. In our Preamble to the specification we detail the six key attributes of how it provides this profitability and innovativeness. These are the foundations of the eleven module software application that will define and support the oil and gas producer and Joint Operating Committee’s operations. These attributes are what the industry should be focused on and they can only be attained, in this the 21st century, by first defining and building software that supports the organizations that supports the attributes. Without the software to define the organizational foundations and attributes, nothing will happen otherwise.

Specialization and an enhanced division of labor are the means in which economies expand. Without the ability to further specialize the economy and the organization will stagnate. It is the source of real value generation. However we have a problem that is presented to us by the use of software. Without the changes first being defined and supported in the software, no further specialization or division of labor can spontaneously occur. Therefore we have to predetermine the changes that we desire, build them into the software and release them into the organization. This is the nature of our organizations today.

People, Ideas & Objects in addition to providing the Preliminary Specification provide a software development capability that is focused on the changes that producers and Joint Operating Committees want to see in their organizations. Our Revenue Model is designed to focus our organizations around the changing needs of the industry. A fundamentally different focus to that of our competitors with a fundamentally more competitive value proposition.

Key among the attributes of our value proposition is our claim that we provide the most profitable means of oil and gas operations. Our claim is validated by our business model noted in the Preamble. It is our way of asserting that we can deliver the Preliminary Specification and its derivative software and software development capability to the marketplace. Oil and gas producers can see the business model and know that its value is material to their business. And they know that they can only attain that value through the software that defines and supports their organizations. It is therefore incumbent on them to ensure that that software is developed, built and delivered to them in the manner that their organizations require. That is how People, Ideas & Objects can guarantee that once we begin the developments of the Preliminary Specification we will complete them. It is in everyone’s interest to do so.

Except maybe the bureaucracy. We may not have seen the end to their tactics. I would expect them to put up a few more good fights, they have a lot at stake. I would suggest they look to the future and ask where they fit-in in any scenario. Times have changed and the writing is on the wall. It’s time to go. Although I am certain they will need more encouragement, the investor class has a particular issue with the way that oil and gas is operated at the current time. Our appeal to the investors continues and the transition is beginning, so lets stay focused on these points.

I am certainly looking forward to the transition. There is nothing more exciting than seeing a sleepy industry focused on muddling along turn itself into a dynamic, profitable and innovative industry. Just in time for when the real demand for energy strains the ability of the industry to meet it demands. We live in exciting times and we have much to do.

The Preliminary Specification provides the oil and gas producer with the most profitable means of oil and gas operations. People, Ideas & Objects Revenue Model specifies the means in which investors can participate in these user defined software developments. Users are welcome to join me here. Together we can begin to meet the future demands for energy.

Bureaucracies or Information Technology Management

Without a plan to deal with any declines in the natural gas prices you can be certain there will be losses in 2013 that will be equal to those in 2012. Losing money has no impact on the mindset of the bureaucracy. Other than the need to provide excuses during the financial reporting season, the fact that they are incurring losses concerns them little. If you listen carefully, you’ll also hear very little in terms of how the low natural gas prices are being raised as an issue by these people. They truly couldn’t be happier and more self satisfied than they are today.

This is no way to run a business. What makes anything that is happening in the natural gas business acceptable. Hope? We’ve had three years of that. The structure of the industry is now in a situation where the natural gas prices appear to look like they will remain low for the foreseeable future. Is that the hope of the industry, that it will continue to generate losses for the foreseeable future? This is not too different from the manner that the business has operated in the past but there have been some fundamental changes. And the bureaucracy has not recognized or accepted these changes. Key among these is the prolific nature of the shale gas reserves. Bringing a new dynamic to the natural gas business. One in which the supply of natural gas can overwhelm markets.

It is imperative that the natural gas producer change their operating strategy from one that produces at capacity to one that produces above the marginal cost. Then and only then will the industry take the steps to responsibly manage the resource. Continuing to produce at losses for much longer will only destroy the industry, leading to shortages in the natural gas commodity, leading to much higher prices, causing distortions in investment and an eventual collapse in prices once again. Producing at the marginal cost will help to mitigate the broad swings in pricing and help the industry to grow and prosper in an appropriate manner.

It is reasonable to assume based on the actions of the bureaucracy that until the People, Ideas & Objects Preliminary Specification is built and operational within the industry. The $67 billion in annual opportunity costs will be incurred each and every year by the bureaucracy. A bureaucracy that refuses to even recognize this as an issue. One that has vilified me for my efforts in asserting the Preliminary Specification as a solution to the problems of the industry. One that shows that the bureaucracy is at the heart of all of the issues.

It comes down to the same old conflict that is being played out in every industry. Will the bureaucracy win or the Information Technologies that replace and provide alternatives to the bureaucracies. The battle is being fought everywhere and the economy is on shaky ground because the bureaucracy is only interested in its survival. It truly doesn’t care about value. The force for self preservation is stronger than the idea that they do the right thing. Whereas the Internet is providing solutions to the way that business had been done for the last century. Ways that are more efficient and effective. Providing business models, like what the Preliminary Specification provides the oil and gas producer, that bring a dynamic, innovative and profitable nature to the business.

The Preliminary Specification provides the oil and gas producer with the most profitable means of oil and gas operations. People, Ideas & Objects Revenue Model specifies the means in which investors can participate in these user defined software developments. Users are welcome to join me here. Together we can begin to meet the future demands for energy.

Focusing on the Business of the Oil and Gas Business

Having a plan to deal with the nature of the natural gas business is a necessary capability for the oil and gas industry. With the prolific nature of the shale gas reservoirs it will be mandatory that the oil and gas producer has the capability to shut-in a field on a temporary basis, as the natural gas price declines dictate. With such high throughput deliverability from these fields, losses will accumulate quickly, and the impact on natural gas prices will be affected by actions taken by the producers. Exposing trillions of cubic feet to the marketplace too quickly will have adverse effects that do not benefit oil and gas producers. The days when the industry produced at capacity are a thing of the past, in my opinion. Marginal cost will drive what is produced.

Production discipline will need to be enforced through the industry. Those producers that continue to produce at a loss will be doing so at their own detriment and it would be assumed that they would be treated harshly by the investment community. Losing money when there is no reason to do so would be frowned upon and that producer would find it harder to operate as a viable going concern. Or one would think so. The North American natural gas business will be in somewhat of a supply surplus situation for the foreseeable future. Producing this gas at a loss is unnecessary and unwarranted.

While the properties are shut-in while the natural gas prices are low is the time in which producers should review their capabilities in the Knowledge & Learning module to determine what they can do to lower the marginal costs of their properties. Innovation in terms applying further investment to increase production, enhance reserves, lower costs or increase revenues will help to bring the property back on production sooner. This will be the area where the competitive aspects of the Joint Operating Committee are seen and applied to the property.

This is the business of the oil and gas business. The Joint Operating Committee. The bureaucracy has been concerned and focused on the tax, royalty and SEC requirements of the corporate model and have forgotten, ignored and missed the business of the business or the partnership represented by the Joint Operating Committee. People, Ideas & Objects is the only software application that can recognize the Joint Operating Committee as the key organizational construct of the innovative and profitable oil and gas producer. By aligning the legal, financial, operational decision making, cultural, communication, innovative and strategic frameworks of the Joint Operating Committee with the compliance and governance frameworks of the hierarchy we achieve a speed, innovativeness and accountability in our organizations. Then we can deal with the business of the business and have the compliance and governance as a result of the decisions made in the business, not have the compliance and governance drive the business. Bureaucrats are so focused on what is required to meet the next iteration of regulations that they have lost sight of what the business is. We need to change this around and move the focus to the business and put the plan for that business in place. And stop losing money.

This requires that we adopt the People, Ideas & Objects Preliminary Specification. The eleven modules identify and support the Joint Operating Committee as the key organizational construct. It establishes three key marketplaces that provide for the oil and gas industry. The Resource, Petroleum Lease and Financial Marketplace modules each are designed to create robust markets for the producer to source what they need in the human resource and service industry, petroleum lease and financial markets. Other modules fulfill the full scope of an ERP application for the oil and gas producer and Joint Operating Committee. People, Ideas & Objects application modules are based on Oracle Fusion Middleware technologies and use Oracle Fusion ERP applications as the base functionality.

The Preliminary Specification provides the oil and gas producer with the most profitable means of oil and gas operations. People, Ideas & Objects Revenue Model specifies the means in which investors can participate in these user defined software developments. Users are welcome to join me here. Together we can begin to meet the future demands for energy.

A Plan to Deal With the Natural Gas Business

We have now ended what is the financial season in oil and gas. A time when the past years performance is reviewed, the years budgets are approved, audits are conducted, the annual report is issued to shareholders and the annual general meeting has been taken care of. So what’s the plan for the natural gas prices in terms of removing the marginal production off of the marketplace. Or alternatively, how will the bureaucracy deal with the losses that were incurred on the natural gas side of the business. We had calculated that the Preliminary Specification would contribute $67 billion in additional profits in 2012 if it were operational. Most of this was from natural gas pricing. So what’s the plan to stem the loss of this value in 2013. Anyone, Anyone.

Once again the bureaucracy has no plan. It is proposed however, that Christmas 2013 will be very cold and other delusions. How is this a business. Its not its daycare where the bureaucracy receive a warm office, a salary, retirement and other benefits while they participate. Without any challenge to the existing status quo you can be sure there will be no activity that is undertaken to change the afternoon nap. Another year will pass much like last year and hope will rise with the inevitable rising natural gas prices as the temperatures dip in November. It’s the bureaucrats perfect dream.

The only problem of course is the inevitable downturn in prices that begin around this time of the year and continue on until November. This is where the majority of the money is lost during the year. And the remainder of the year's operations are not good enough to earn any money either so they can’t alleviate these losses. Losing money is nothing to a bureaucrat. There is always more capital that can be found if needed to keep the daycare afloat. If not, there are other daycares in which to participate.

What is needed is the adoption of People, Ideas & Objects Preliminary Specification. Through a variety of interfaces the partnership representing the Joint Operating Committee is able to make the operational decision to suspend production when it reaches its marginal costs. Therefore mitigating the downside losses of any operations due to low natural gas prices. These losses are mitigated due to the fact that no production or overhead expenses are incurred during times when the production is shut-in. This is done through the Preliminary Specifications use of the decentralized production model.

What the decentralized production model does is reduce the producer to a small footprint of their current operations. Consisting of the C class executives, earth science and engineering resources, some support staff and legal resources. The remainder of the resources are reorganized into service providers who are organized around processes that have the entire industry as their client base. These service providers conduct their operations for their clients and bill for their services directly to the Joint Operating Committee. So for royalties there will be a charge for royalties and a charge for the royalty accounting directly to the Joint Operating Committee.

This provides the opportunity for the producer, should they decide to shut-in the marginal property, to not incur, in this instance, the royalty or the royalty accounting charges for the months when the property is shut-in. And that would be the case for any of the other overhead items that are being managed by the service providers. No production, no production or overhead charges and hence no losses on operations and the natural gas prices will have limited downside during the summer or other times when the market is well supplied.

In short a plan to deal with the nature of the natural gas business. One in which we need to adopt the Preliminary Specification as the method of operations for the oil and gas industry. The Preliminary Specification provides the oil and gas producer with the most profitable means of oil and gas operations. People, Ideas & Objects Revenue Model specifies the means in which investors can participate in these user defined software developments. Users are welcome to join me here. Together we can begin to meet the future demands for energy.

Critical Resource Shortages

Speaking of the qualifying aspects of the Preliminary Specification. There is also the ability in which the producer firm is able to better manage their earth science and engineering resources. What is known is that there is a general shortage of geologists and engineers in the marketplace today. What is also known is that the demands for these skills will be growing and the numbers of retirements will exceed the number of new recruits. A solution to this issue is a necessary part of any ERP system and one has been included in People, Ideas & Objects Preliminary Specification. One that relies on the toolset of specialization and the division of labor as keys to solving these problems.

The key issue is that each producer firm in the current corporate model is having to build just-in-time earth science and engineering capabilities for each and every contingency that their firm may be faced with. This overbuilding of capabilities within each producer, on an industry wide basis, creates unused and unusable capacity in these critical resources. Taking this strategy into the future, where it would be expected that further specialization of these resources would require more specialized skills. And would demand that each producer bring on more resources to meet the just-in-time requirements of the corporate model. The scope and scale of their earth science and engineering operations would become such a burden as to be inoperable and unprofitable.

What is needed is a simpler solution that provides for that specialization and a division of labor to ensure that the needs of the industry are met. Using the division of labor in an effective way can help to mitigate the demand issues of these resources. Organizing these resources in different ways will increase their productivity and alleviate the critical resource constraints. The specialization arise at the producer level. That is each producer will specialize in an area of earth science and engineering disciplines that they have a distinct advantage. This advantage will then be pooled with the other members of the Joint Operating Committee, and with their specializations, it will be determined within the Knowledge & Learning module what areas of the operations they have the appropriate specializations for. Any deficiencies can be made up through the marketplace either through other producers or service providers offering the capabilities that are needed by that Joint Operating Committee.

This pooling concept releases the unused and unusable capabilities and resources that are locked in by the current corporate model to the marketplace. There they will be made available to be reorganized on a specialization basis within each producer. Having service providers handling some of the common processes on a industry wide basis will also help to increase productivity and reduce the demand for these key resources.

For several hundred years specialization and the division of labor were naturally occurring activities in the marketplace. Then software became a big part of our lives and ERP systems have locked our organizations into concrete. Disabling the organizations ability to develop specializations and further define increases in the division of labor. People, Ideas & Objects provides the Preliminary Specification and a software development capability designed to support specialization and the division of labor so that our organizations can evolve again. Without this software development capability the current corporate model is as broken as the former Soviet Union’s. Everyone complaining about shortages, and nothing being done about it.

The Preliminary Specification provides the oil and gas producer with the most profitable means of oil and gas operations. People, Ideas & Objects Revenue Model specifies the means in which investors can participate in these user defined software developments. Users are welcome to join me here. Together we can begin to meet the future demands for energy.