Our Preliminary Specifications 10th Year, Part II
What outcome could a rational bureaucrat expect if they chose to participate in the development of the Preliminary Specification? As we noted in our prior post, the alignment of interests against these bureaucrats is comprehensive and complete, only their direct reports will be feigning any support. There’s nothing to be gained and everything to be lost for them to engage with People, Ideas & Objects on the development of the Preliminary Specification. Therefore engaging in a scorched earth policy that ensures they are the ones that secure possession of everything including the candle sticks is the only rational policy objective that will motivate, appeal or make any logical sense to them. The alignment of the bureaucratic cultural mindset across the North American producer population was noted in the prior post to be in perfect harmony throughout. As an extension of this alliance that does not fight and fritters away the value that had been accumulated over the many generations before them. Bureaucrats will not fight against the aggressive posture and allegations that People, Ideas & Objects have asserted and it is reasonable to assume that much like cats, they can’t herd themselves in this direction. Leaving me with the opportunity to rename these producer bureaucrats with the more appropriate term of maggot’s. As we know maggots infest, don’t fight and leave nothing but the carcass.
This leaves People, Ideas & Objects, our user community and their service provider organizations, the service industry, staff of the producers, investors, bankers and most particularly the consumers, what we collectively consider our customer base, with an interesting dilemma. In Winston Churchill’s “The Second World War,” Volume 6 entitled “Triumph and Tragedy” we find the relevant quote to our situation in the fall of Poland.
After pointing out that the German plan to set up defence points would result in the gradual destruction of the city, the broadcast ended by reminding the inhabitants that “all is lost that is not saved by active effort,” and “by direct active struggle in the streets, houses, etc., of Warsaw the moment of final liberation will be hastened and the lives of our brethren saved.”
Who now has the authority to ensure that all is not lost by ensuring the active effort is made to save this industry, or would they be saving our economy, our standard of living or civilization? People, ideas & objects have identified the issue and its solution in the form of a viable, workable business model. In combination with our user community and their service provider organizations we’ll be providing the ERP systems, administration and accounting on the basis of the Preliminary Specification in what we’re calling Cloud Administration & Accounting for Oil & Gas. However there is so much more that needs to be done outside of the domain of People, Ideas & Objects et al efforts. Time is of the essence, where is this leadership and sense of urgency?
My day to day discussions with those in the oil & gas industry are remarkable for their consistency. The industry may be undergoing an existential crisis as I’ve described which contrasts the maggot's calm and reasoned approach to the situation in their simple utterance of “muddle through.” I would argue the destruction and frittering away of the value of an asset each month for decades may be described as an opportunity cost, and as a result would rightfully not be a concern of management, however that argument needs to be reevaluated by producers. This is evident in the fact that as the monthly losses are incurred at each and every property in North America, we are moving into the second decade of the Preliminary Specification. Of which I am able to report that I have had zero expression of interest in the development or interest in the remedial efforts necessary to establish the most profitable means of oil & gas operations, everywhere and always, by any and all of the North American producers. It is the fact that the Preliminary Specification disintermediates the maggot's from their lofty positions and power that is the issue to them. Enhanced profitability in the form of the Preliminary Specification as an ERP system, which is standard fare for any organization, is demanded by the investors to be from a tier 1 provider such as Oracle Cloud ERP, would attract interest from any common sense business person. Therein lies the conflict.
The methods used in the Preliminary Specification to develop the value needed in producer and industry organizations are the proven, time tested business methods other industries have benefited from. We first of all move the culture of the industry away from the corporate model managed by the bureaucrats to the Joint Operating Committee. The legal, financial, operational decision making, cultural, communication, strategic and innovation frameworks of the industry. Increasing the organizational speed, accountability and profitability. Introduce and exploit the concept of Professor Paul Romer “New Growth Theory” in his paper “Endogenous Technical Change.” Where the accounting and administrative resources are built on an industry wide capacity and capability and made to be shared and shareable turning them variable, based on production. Reducing the costs of each producer having to replicate the same unshareable, uncompetitive capability and capacity. And in turn, expanding on the Cloud Computing efficiencies by providing our software and service as the Cloud Administration & Accounting for Oil & Gas. The third method we use is the introduction of high levels of business automation, and the capacity and capability to iterate upon these principles on an ongoing basis. Another method in which value is generated is through the use and exploitation of further and continuous specialization and the division of labor. The only proven method of generating value in organizations. All of the four methods mentioned to this point are unquantified in our value proposition as the impact is subject to too many variables to determine their monetary impact. There are many other methods contained within the Preliminary Specification that bring substantial value to all concerned and can’t be qualitatively or quantitatively identified either, such as the two major processes of innovation. It is reasonable however to assume that they’ll be foundational reasons why the North American consumer is provided with a profitable, independently sourced, abundant and affordable means of their oil & gas needs. Dare we ask what the maggot’s are offering?
One of the methods in which we’re able to build value and quantify the amount is through the decentralized production model of the Preliminary Specification. Ensuring that all production in North America is produced profitably at all times. Also known as running the industry as a business. This is done through the price maker strategy that is detailed in the Preamble of the Preliminary Specification. And can be quantified in the region of $5.7 trillion dollars over the next 25 years. The elimination of the producer's assumption that investors will pay for all the capital costs is replaced by the Preliminary Specifications ability to ensure profitable operations which imputes the internal generation of the cash necessary to fuel the needs of the capital expenditures in a capital intensive and mature industry. This displacement of funds over the next 25 years is valued by others as $20 to $40 trillion dollars. Once again the focus of turning a business focus to the business of oil & gas for the first time in a half century does generate value.
It’s in the sense of value that we’re all now appreciating and understanding why profitability everywhere and always is so important to the oil & gas industry. Where is it that the money comes from that is necessary to ensure that the oil & gas investor is provided with a competitive return on investment in comparison to other industries in the North American marketplace? Does that money come from new investors in order to compensate older investors for being all around good people? Is this woke indoctrination what has guided the officers and directors of the producer firms for the better part of the past four and one half decades? How else could anyone ever explain the standard fare producer firm going to the capital market on an annual basis to raise their necessary capital budget? When the capitalization of costs of the producer firm includes literally everything they incur as a capital, the culture created is to reload the firm with cash, spend that cash, capitalize for eternity, repeat. When investors realized the nature of the producers' methods, they walked. Then there was suddenly no more cash for the service industry, no more cash for the producer firms staff and therefore layoffs and no more cash to keep the facade operating. Everything slowly ground down. Only the officers and directors / bureaucrats / maggot’s have made good on their time in the industry. This was done because “that is the way it’s done in oil & gas” or “that is the way they were trained.” Which in their mind relieves them of their culpability. If only one or more would jump off a bridge.
Facts and evidence accumulated over the past decades shows the absolute failure of the maggot’s administration. What People, Ideas & Objects have done is prepare an alternative solution to this catastrophe and that has existed in the form of the Preliminary Specification for a decade. How is it that the maggot’s have been able to continue with their consumption of the value of the industry at the expense of all concerned. I think we addressed that in our prior post by noting that bankruptcy, serendipity, spontaneous order and creative destruction have been corrupted to support the maggot’s enterprise. It also appears to me that they’re entrenched and will not be leaving on their own. They will not suddenly gain the moral courage to do the right thing and set the industry back on its feet with the proper focus on a dynamic, innovative, accountable or profitable basis through development and implementation of the Preliminary Specification. Oil & gas prices are too healthy for them to walk away from their upcoming payday. They’ll be able to sprinkle cash about and make it look as if activity is evidence that the “good times” are here. It will be necessary to ask two questions though. Will it be profitable when the industry is culturally structured to be incapable of doing so? How much value is left to be exploited before the maggot’s hit bone and fly off?
I’ll leave this post with another quote from one of Winston Churchill’s “The Second World War” Volume 5, entitled “Closing the Ring”
It is always prudent to be on record publicly as having given warning long before the event. This is more particularly true when its scale and gravity cannot be measured.
And with that I’ll just say it’s a nice day here in early August of 2022. I wonder what it’ll be like this winter?
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 & gas industry with the most profitable means of oil & gas operations, everywhere and always. Setting the foundation for profitable North American energy independence, everywhere and always. 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? We know we can, and we know how to make money in this business. 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. Please join our community on Twitter @piobiz. Anyone can contact me at 713-965-6720 in Houston or 587-735-2302 in Calgary, or email me here.