AI, The Fourth Industrial Revolution, Part V

Who Do You Trust 

People, Ideas & Objects Preliminary Specification provides producers with the most profitable means of oil & gas operations. Our user communities and their service providers operate with the same commitment. We’re including the use of Artificial Intelligence throughout the Preliminary Specifications development and application as a given. To ensure that oil & gas’ culture is transformed to a dynamic, innovative, accountable and profitable one. 

A critical concern arises with the integration of ERP systems and AI. We’ve grown accustomed to accepting data from current systems, largely because alternatives are scarce. But will this trust extend to AI-driven directives that involve risk, such as relocating for a job without human oversight? Would you comply?

Trust is central to our user community’s value and permanence, exemplified in the Material Balance Report. This report automates the management of production, allocation, distribution, disposition, and reporting of oil and gas products—from IoT origins to financial statements. Without a meticulously designed and implemented system, confidence in its accuracy would falter. If users sensed gaps or lacked someone to address issues, trust would erode.

Our user community earns and sustains trust through hands-on development, implementation, and operation of the Preliminary Specification. Without this human element, systems will always face skepticism. AI now writes sophisticated code, having mastered games like chess and Go due to their defined scope. Programming languages, though more complex, are approaching similar mastery. However, assuming AI can fully develop ERP systems, which model intricate business processes, risks costly failures and unsuccessful shortcuts.

Our user community’s role is vital for long-term trust in ERP data and systems. They will leverage AI to boost productivity and enhance work quality, while their service provider teams deliver hyper-specialized, IP-driven administrative and accounting services designed for producers industry-wide.

This isn’t about protecting our territory—it’s about trust. Over-relying on AI for the Preliminary Specification’s development could reveal AI’s limitations, potentially delaying delivery or even failing. Restarting with new AI tools or reverting to human-driven development would incur further, significant opportunity costs for oil and gas. Our user community’s human-centric approach, augmented by AI, ensures trust and delivers results without gambling on unproven technology.

Power is Nothing Without Control 

Our user community serves as the throttle and brake for the development, implementation, and AI integration in People, Ideas & Objects’ Preliminary Specification and its Cloud Administration & Accounting for Oil & Gas software and services. They gauge market readiness and AI adoption, ensuring trust governs its use. Without this human oversight, who decides when people must follow AI’s commands? Trust in AI will be earned and sustained through the user community’s daily interactions. We've identified many of  our user communities' competitive advantages as uniquely human and therefore irreplaceable. Human qualities like collaboration, creativity, decision-making, tacit knowledge deployment, design, ideas, innovation, issue identification and resolution, judgment, leadership, negotiation, planning, quality, vision, and wisdom are uniquely essential. Coupled with their service provider teams, these attributes empower oil and gas producers to achieve the most profitable operations.

As discussed in Dr. Jin Hyung Lee’s insights on Stanford University’s FYI Podcast, and AI in neuroscience allows researchers to see the “forest” while AI handles the “trees,” analyzing vast datasets to test hypotheses and boost productivity. Similarly, our user community can leverage AI to enhance their work, provided they maintain a holistic perspective.

I’ve long argued that AI is the killer app for Intellectual Property (IP). For our user community and their service provider teams, whose work is IP-driven, AI thrives on this foundation, simplifying tasks by referencing owned or licensed IP instead of complex engineering prompts.

Intellectual Property in People, Ideas & Objects is managed as follows. I own all of the Intellectual Property of the Preliminary Specification and its derivative works such as the podcasts. I license our user community the exclusive right to prepare derivative works in the development of the Preliminary Specification and its software. Service providers are provided with an End User License Agreement. People, Ideas & Objects pays the user community members to acquire their IP from them and in turn the entire Preliminary Specification and its derivative works remains available to all the user community members to prepare further derivative works. I then use this IP to assess the producers Profitable Production Rights for access to our Cloud Administration & Accounting for Oil & Gas software and service. 

By empowering our user community to control AI’s application and IP’s evolution, we ensure oil and gas operations are dynamic, innovative, accountable, and profitable, with trust at the core of this transformation.

What Else is Going On

Beyond Artificial Intelligence’s transformative impact on North American oil and gas, other seismic shifts demand attention. The Internet is evolving from a platform of data and information to an Internet of value, where ownership, rights, agreements, and Intellectual Property are traded virtually. People, Ideas & Objects’ Preliminary Specification, with its Resource, Financial, and Petroleum Lease Marketplace modules and Marketplace Interface, creates virtual forums for these exchanges in oil and gas.

A looming challenge threatens the unprepared: the accelerating pace and complexity of business, soon compounded by surging transaction volumes. Producers, already struggling, face chaos without adaptive leadership. Officers and directors, focused on personal gain, have long abdicated responsibility, feigning ignorance of systemic issues. Their inaction is a cultural failure.

Global trade dynamics are shifting. President Trump’s policies may level the playing field, countering foreign competitive advantages and halting the erosion of U.S. cultural and economic strengths. At 75 years into its 250-year global economic dominance, the U.S. leverages unparalleled cultural advantages—its Constitution, freedom, and entrepreneurial spirit—entering the Fourth Industrial Revolution with unmatched potential. Competition will only sharpen these strengths.

On the demand side, officers and directors should pivot to their preferred clean energy ventures, this time as startups without oil and gas revenues. New leadership, attuned to oil and gas’s challenges and opportunities, is needed. For 50 years, profitability has been essential, yet current leadership shows no grasp of its necessity or mechanics. Without unified action, we risk squandering our 250-year window. The Preliminary Specification offers the path to a dynamic, profitable industry.

Podcast # 4, Preamble

 Another podcast to finish out the week. Still have a few glitches here and there but overall it’s better than before. The two that jump out are the $4.1 trillion in shale gas losses are attributed to overproductions effects on natural gas prices. Falling from their heating value based price of 6:1. To a price as low as 50:1 in 2024. 

The second is in answer to the question at the end about what is needed to start the rebuilding process. And before anyone else states the obvious, it’s money. The money the producer officers and directors sit on for whatever reason. 

Pod Up

AI, The Fourth Industrial Revolution, Part IV

User Community Implementation in the Fourth Industrial Revolution

Entrepreneur and investor Naval Ravikant asserts that “ideas are the new oil,” underscoring the critical value of intellectual capital in today’s economy. People, Ideas & Objects licenses the Intellectual Property (IP) of the Preliminary Specification to our user community, empowering them to build upon a robust platform of ideas tailored for the oil and gas market. Our user community stands on the shoulders of giants—not just the Preliminary Specification, but also Oracle’s development and user communities, fellow user community members, Artificial Intelligence, academia, and beyond. This positions them to thrive in the Fourth Industrial Revolution.

Ideas have consequences, sparking both support and resistance. Navigating the commercial landscape of ideas is complex, but the rewards reflect this challenge. Our user community’s exclusive license to the Preliminary Specification’s IP is designed to clarify their role and mitigate risks, ensuring they can deliver value effectively.

User Community Structure and Benefits:

• Exclusive IP Access: User community members are licensed to access and create derivative works from People, Ideas & Objects’ IP, with exclusive rights to do so.

• Focused Development: Our software developers rely solely on user community input, ensuring alignment with industry needs and ignoring external distractions.

• Producer Collaboration: Producers seeking new or updated features in the Preliminary Specification can directly engage user community members to address their needs.

• Service Provider Ownership: Each user community member is licensed to operate a service provider, owning an exclusive domain for software processes and related services delivered by their team.

• Budgetary Control: User community members maintain authority over their projects’ budgets and deliverables, ensuring accountability and focus.

• Proven Success: User-driven ERP development has consistently delivered high-quality software. By empowering our user community, we ensure North American oil & gas producers achieve the most profitable operations.

This structure harnesses the power of ideas, AI, and collaborative innovation, positioning our user community to lead oil and gas into a dynamic, innovative, accountable and profitable future.

And There’s More

The oil and gas industry in North America is in a dire state, unnecessarily so. Properly applied Information Technology, as outlined in People, Ideas & Objects’ Preliminary Specification, could transform the industry, yet officers and directors remain paralyzed, clinging to an unarticulated vision they hope will dazzle investors. Decades of complacency and “muddle through” have led to repeated failures—clean energy, shale, and now consolidation. Waiting for a miraculous turnaround is futile.

The Fourth Industrial Revolution offers unprecedented opportunities, even for “old” industries like oil and gas. New business models, driven by AI and innovation are reshaping industries like automotive and space. Yet, oil and gas leadership, blinded by vested interests, fails to seize these possibilities.

Our user community is tasked with dismantling this desolate industry and rebuilding it based on the Preliminary Specification’s vision—a cornerstone of North America’s economic and political strength in this revolutionary era. The alternative—catching a falling knife or stopping a rolling log—is the beginning of a dangerous, futile slog back to “muddle through.” The Preliminary Specification offers a bold, fresh start, challenging yet essential for a dynamic, profitable future.

Economic Impacts of Industrial Revolutions

Historical data shows each Industrial Revolution—steam, electricity, IT—marked a leap in economic growth through specialization and division of labor, building on prior advancements. The Fourth Industrial Revolution, driven by AI, promises even greater transformation. While economic statistics may understate benefits due to efficiency-driven price reductions, the standard of living soars for those leveraging advanced technologies. In the past, this distinguished Western economies from others. Today, inaction by North American leadership risks ceding ground to rising competitors like China and Vietnam. Japan’s decline from 17.8% of the global economy in 1995 to 4.2% today exemplifies the cost of bureaucratic stagnation, echoing General Shinseki’s warning: adapt or be left behind.

Specific Economic Impacts of Industrial Revolutions 

What common economic patterns do we see across each of these revolutions? How did they balance productivity gains with social challenges? Or was that left to market forces such as serendipity, spontaneous order and creative destruction? How might these apply to our user community?

Each of these revolutions drove massive productivity gains but disrupted labor markets, requiring adaptation (e.g., unions, education). New industries created wealth but also concentrated it, sparking tensions. Globalization expanded with each wave, amplifying economic interdependence. These are unquestionably the outcomes and benefits that we see today. Will these continue, and is consolidation by producers anticipating any prospective benefits? 

Will comatose elephants even hear the entrepreneurial opportunities? Or will they find the pace of change leaves them challenged in their opportunities? How much latitude do their organizations provide? Can governments be trusted to do what’s right? Culture is maybe the most appropriate question needing to be answered. Can today’s producer, constrained by its culture prosper? 

One issue they’ve refused to deal with is specialization and the division of labor. In our May 2004 Preliminary Research Report we identified organizations are defined and supported, but also constrained by the ERP software they use. Since then officers and directors have used this knowledge as a cultural force they depend upon to support their never changing, self interested bureaucracy. A cornerstone of their unaccountability. And we defined it further in a recent paper “Hyper Specialization in Today’s AI & IP Enabled Workforce.”

Nonetheless further specialization of any company at this point is counter productive. Standing on the shoulders of giants before them, producers' low transaction volume created through a hyper specialized environment does not generate the benefit of a further division of labor in even the largest of companies. The benefits of any further division of labor are diluted through the low volumes of work each task requires. People, Ideas & Objects use of the broader industry distribution of work is necessary to gain any benefit from hyper specialization and the division of labor. 

The Internet offers orders of magnitude greater speed and effectiveness in terms of organizational structure and performance over the bureaucratic standard hierarchy. Use of it is the basis of competitiveness in today’s market as much as AI will soon provide a base level of competitiveness. Oil & gas has opted out of the capital markets competitive challenges when they‘ve continued to pursue “muddle through” since their investors left in 2015. Inaction is their purpose. This is cultural in nature and will therefore persist. Taking the officers and directors consolidation, “muddle through” approach will continue their legacy. Believing ownership and operation of unproductive capital assets provide them with control. 

In prior Industrial Revolutions capital formation was a formidable barrier to entry. That may be the least common trait of today’s revolution. Business model innovation mixed with active execution and dynamic, outsized results are the characteristics of success. What I always envisioned People, Ideas & Objects to be. I am however satisfied it’s not my lack of performance in this regard. When investors have been unable to motivate any action from officers and directors for over a decade. We now see where the difficulties are and what needs to be done. A comprehensive industry rebuild in the vision of the Preliminary Specification. If however this continues officers and directors will have been able to declare a vacuous win. 

It’s not only People, Ideas & Objects that have no support. No vendor or service industry company expects producers will initiate any action. After sitting on primary industry revenues and doing nothing for so long. Producers expectations are that investors will be the ones to start the ball rolling in both oil & gas and elsewhere. Yet for producers to even express an interest in any activity is itself counter cultural and considered bad manners. 

Comatose elephants are not what oil & gas needs at this time. Fast moving, nimble, innovative and profitable ones are. Our Preliminary Specification is designed to deal with all North American producer types and sizes. Small and startup companies included. Turning overhead variable and dependent on profitable operations gives these producers the ability to either pay the overhead incurred from the free cash flow generated or not incur any overhead if operations were shut in. Additionally they can leverage their scientific expertise in a market where demand for engineers and geologists will only increase. Creating a permanent secondary revenue stream and supporting the producer's cost of maintaining their engineering and geological capacities and capabilities. 

Podcast # 3 - Seven Organizational Constructs

 People, Ideas & Objects Preliminary Specification has seven organizational constructs which work to establish a culture of reserves preservation, performance and profitability. 

Pod up. 

AI, The Fourth Industrial Revolution, Part III

Rebuilding Oil & Gas for the Fourth Industrial Revolution

Reconstructing the oil and gas industry with a culture of reserves preservation, performance, and profitability demands a comprehensive approach. People, Ideas & Objects’ Preliminary Specification leverages seven Organizational Constructs to define, support, and guide this transformation, creating dynamic, innovative, accountable, and profitable producers and a revitalized industry. Information Technology, including Artificial Intelligence (AI), is one of these constructs.

Our expectation is these tools will assist society in maintaining North American political and economic prosperity for the long term. It is the most powerful economy which consumes the most energy. It’s difficult to see how society's leadership would be established without independence in its sources of energy. We are the largest consumer of energy and we are the most efficient energy consumer. Contributing up to 25,000 man hours of labor in each barrel of oil equivalent. And now untold leverage of the continents established cultural strengths through Artificial Intelligence. 

Lessons from past Industrial Revolutions—shrinking timeframes, productivity booms, labor shifts, new markets, and social challenges—suggest AI’s Fourth Industrial Revolution could be faster and more disruptive than its predecessors. Its ability to automate complex tasks and process vast data could unlock unprecedented value, but only if society adapts to its challenges. Focusing on AI’s potential for system-level insights, as in neuroscience, highlights a key opportunity: AI could redefine how we create knowledge and value, but humans must guide the paradigm shift, just as they did with steam, electricity, and IT.
The structural conflicts in oil and gas, driven by misaligned business models, mirror issues in politics, academia, and healthcare. These conflicts, often obscured by society’s wealth, become glaring when their destructive impact stalls progress. Current officers and directors, prioritizing personal gain, resist reform. People, Ideas & Objects urges them to choose to lead, follow, or step aside.

As we noted in a prior blog post covering Ark Investments Podcast of Dr Jin Huang Li of Stanford University. Dr. Li noted, institutional inertia and incentives can stifle holistic approaches. Academia rewards published papers on narrow topics, not risky, interdisciplinary leaps. If we’re to fully harness AI for system-level breakthroughs, we might need new structures-funding models, collaborative networks, or even AI-assisted research platforms-that encourage big-picture thinking. Is this where AI forces us to rethink not just tech but how we organize knowledge and innovation?

David Hume’s quote about ”no amount of reasoning will generate an idea” can’t be verbatim attributed to him. However it’s believed to be derivative of his quote. 

All the perceptions of the human mind resolve themselves into two distinct kinds, which I shall call IMPRESSIONSand IDEAS. The difference betwixt these consists in the degrees of force and liveliness, with which they strike upon the mind. (A Treatise of Human Nature Book I, Part I, Section I)

The Preliminary Specification empowers oil and gas leaders to harness AI, redefining the industry for a prosperous, energy-independent future.

People, Ideas & Objects User Community. Our Priority and Key Competitive Advantage

I’m delighted with the competitive advantages that define People, Ideas & Objects, centered on our user community, Intellectual Property, and research. These elements showcase our strategic clarity and expertise. While our software code is a vital part of our Intellectual Property, we intentionally maintain no in-house commercial software development capabilities. By partnering with Oracle Consulting Services, we’ll accelerate development and deliver superior-quality products. With AI now enhancing software development tools, we avoid redundant investments in building these capabilities internally, ensuring efficiency and focus.

Our user community’s structure is designed to empower its members to achieve our shared goal: providing North American oil and gas producers with the most profitable means of operations. Three innovative components enable this. First, only our user community members are licensed to create derivative works from the Intellectual Property of the Preliminary Specification. Second, our contracted and licensed developers are exclusively guided by the user community’s input on what to build, how, and why, ensuring focus and alignment. Third, the user community controls its own budgets, ensuring accountability and preventing reliance on “blind sleepwalking agents of whomever will feed them” driven by external agendas.

On April 7, 2025, we released a paper titled “Hyper Specialization in Today’s AI & IP-Enabled Workforce, exploring the powerful synergy of AI, Intellectual Property, and our user community.” This paper outlines how these elements converge to create substantial value for the oil and gas industry. It details how our user community, with their service providers, will leverage strategic competitive advantages to rebuild the industry’s culture around reserves preservation, performance, and profitability.

Our User Community, Leading Oil & Gas’ Artificial Intelligence Development and Implementation, a.k.a. The Fourth Industrial Revolution 

This well “reasoned” heading resonates with the vision I’ve always held of our user communities role for development and implementation of the Preliminary Specification and for the long term. 

There is no one country, company or individual who “won” the Industrial Revolution. Everyone did. The same can be said for the Internet as it will be for Artificial Intelligence. In the Information Technology’s Industrial Revolution and as it will be again in the Artificial Intelligence Industrial Revolution, there are those who will choose not to participate. Primarily due to a lack of aptitude and change resistance. It is their choice and they are satisfied with that. 

For those with the aptitude, ability and desire to pursue the benefits of this fourth Industrial Revolution and apply their skills towards North American oil & gas. Where are they able to participate and what benefits will these changes provide for them? For accounting and administrative purposes our user community is their choice. 

On January 10, 2025 People, Ideas & Objects published a paper entitled “Catalysts for Cultural Change: The Leadership Role of People, Ideas & Objects User Community” and subtitled "Reconstructing Dynamic, Innovative, Accountable and Profitable Oil & Gas Producers.” This paper seeks to provide the potential user community member with a clear understanding of the role, the tasks and expectations, what compensation is earned and the phases of development among many other elements of the reconstruction and rebuilding of North American oil & gas producers. 

What has ailed the oil & gas industry is predominantly poor leadership. What will be needed to bring about a dynamic, innovative, accountable and profitable oil & gas industry is leadership. In accounting and administration our user community provides the leaders for this cultural transformation. And that is the comprehensive vision needed for the industry, and what our user community will provide. 

If this thinking is consistent with yours, then action is needed on your behalf. 

Profitable Production Rights, Podcast # 2

Our second podcast deals with Profitable Production Rights. How People, Ideas & Objects and our user community generate the revenues we need to develop and support for the long term the Preliminary Specification. I should note service providers generate their revenue through direct billing to each Joint Operating Committee. 

Pod Up. 

AI, the Fourth Industrial Revolution, Part II

The oil and gas industry is widely recognized for the poor quality of its accounting data and information. This deficiency is not attributable to the competence of accounting professionals or the limitations of ERP systems, both of which operate under challenging circumstances. Rather, it appears to stem from a desire among officers and directors to maintain opaque accountability, achieved by deliberately underfunding these areas. Consequently, accounting capacities are underdeveloped and existing capabilities degrade, leading operations departments to often disregard accounting information in favor of generic reserves estimates for decision-making.

A concerning trend, framed as addressing 'speed and complexity,' is emerging within oil and gas accounting and potentially other sectors. This could pose significant challenges for unprepared companies. In contrast, agile producers could potentially leverage innovative business models like our Preliminary Specification. And achieve superior results with fewer resources, faster timelines, and lower costs. Technologies such as the Internet of Things (IoT) enable field data capture, but their true value lies in data utilization. Our Material Balance Report, for instance, captures production-related data and seeks to automate derivative processes.

However, it is unlikely that officers and directors within producing firms will endorse the Preliminary Specification. Its adoption would implicitly acknowledge their responsibility for current industry inefficiencies. We estimate ongoing monthly natural gas revenue losses across North America due to overproduction at $16.8 billion per month, presenting both strong motivation for corrective action and significant reasons for their continued inaction.

If it’s the Fourth Industrial Revolution…

What “lessons learned” can we gain from a review of the prior three Industrial Revolutions? In terms of time and major economic findings, what, why and how can we project economic value will arise during Artificial Intelligences, Industrial Revolution? What are the impacts we can anticipate in the areas of productivity, markets and labor?

Time Dynamics of Past Industrial Revolutions

As we navigate the Fourth Industrial Revolution, spearheaded by Artificial Intelligence (AI), examining the preceding three revolutions offers valuable lessons. Key questions arise regarding the projected timeline for AI's economic impact and its anticipated effects on productivity, markets, and labor.

Historically, the First Industrial Revolution (1760-1840), driven by steam and mechanization, unfolded over approximately 50-80 years, its pace dictated by infrastructure development and capital investment. The Second (1870-1914), characterized by electricity and assembly lines, took roughly 40-50 years, benefiting from existing industrial foundations. The Third Industrial Revolution (1969-2000s), centered on computing and the internet, matured over 30-40 years, accelerated by hardware standardization and global communications.

This historical context prompts debate about AI's maturation timeline. One perspective suggests that Information Technology, a precursor, took approximately 65 years (from 1950 to 2015) to fully deliver its material gains. By this measure, AI, despite its current rapid advancements and unprecedented infrastructure investment, is only now beginning to generate widespread, tangible value.

However, venture capitalist David Sacks (President Trump’s AI and Crypto Czar) projects a dramatically faster trajectory: a potential million-fold increase in AI capability within just four years. His forecast rests on exponential advancements in three key domains:

• Algorithms/Models: Sacks anticipates a 3-4x annual improvement, potentially leading to a 100x enhancement in four years.

• Chip Technology: New GPU generations are expected to offer 3-4x performance increases per cycle, also potentially reaching a 100x improvement in four years.

• Data Center Compute: The rapid scaling of GPU deployment (e.g., xAI's growth from 100,000 to 300,000 GPUs, with millions projected) could yield another 100x increase in computational capacity.

Sacks argues that the multiplicative effect of these concurrent exponential growths (100x × 100x × 100x) could result in a million-fold capability boost by 2029. He notes that exponential growth is frequently underestimated; for instance, a 10x improvement every two years compounds to 100x in four years, not a linear 20x.

While Sacks' optimistic claim is rooted in current technological trends, its realization hinges on sustained innovation and continued infrastructure expansion. Such advancement promises breakthroughs across numerous fields, including engineering and geoscience, but also brings significant concerns regarding safety, ethics, and energy consumption. Given the transformative potential, minimal costs and associated risks, underestimating this exponential trajectory could prove to be a significant miscalculation.

Major Economic Findings of Past Industrial Revolutions

Learning from past industrial revolutions, we understand that despite predictions of rapid AI-driven change, full societal and economic integration will likely span decades. This extended timeline involves not just technological breakthroughs but also crucial infrastructure development, widespread business model adaptation, new regulatory frameworks, and societal adjustments. Consequently, initiatives like our People, Ideas & Objects framework, designed for continuous, iterative development with our user community and developers, are essential for this transition. A key lesson from history is the rising demand for new skills, highlighting the critical need for massive reskilling and upskilling to meet these evolving workforce requirements.

This need for profound adaptation is especially urgent in the oil and gas industry. The sector faces a severe crisis of trust in its leadership, exacerbated by significant financial damage across its broader economy. Amidst the unfolding Fourth Industrial Revolution, oil and gas producers must urgently move beyond a 'muddle-through' culture to one centered on resource preservation, performance, and profitability.

The future will be defined by the ability to effectively harness data, often in ways currently unanticipated—just as no one in 1760 could have envisioned today's world. This raises a critical choice: continue with strategies that have demonstrably failed, or implement a solution like the Preliminary Specification? This approach aims to establish the vital data, information, and infrastructure needed for a dynamic future, securing long-term capacities and capabilities within our user community and ERP software developers. To merely 'muddle through' with current approaches, given the stakes, is familiar but a deeply concerning prospect.

We’re Podcasting!

I've always quipped that I have a "face for radio and a voice for print." While our Preliminary Specification is packed with insights I could discuss for days, I was thrilled to discover Google's NotebookLM with Gemini, which can generate podcasts directly from this content.

I have consistently maintained that Intellectual Property (IP) and Artificial Intelligence (AI) work together in a mutually beneficial manner. This assertion is supported by the creation of our Podcast series. Our licensed user community members possess the rights to prepare derivative works from the Preliminary Specification. Therefore, as you will observe, the dissemination of the underlying concepts of the Preliminary Specification is significantly enhanced through these AI generated podcasts. This demonstrates the significance of IP and AI in the context of People, Ideas & Objects development.

These initial episodes are first drafts, and I'll be refining them as I become more familiar with the process and the tool. I personally dislike acronyms and apologize for the use of them by the presenters. These AI presenters do a fantastic job otherwise, and I'm excited about the potential!

I plan to release new episodes twice a week for the next two weeks and then 1 per week after that. I invite you to check out our debut, "Profitable North American Oil & Gas." 

Comments or questions are always welcome. 

Pod Up

AI, The Fourth Industrial Revolution, Part I

Artificial Intelligence, the Fourth Industrial Revolution 

Artificial Intelligence (AI) marks the dawn of the Fourth Industrial Revolution, following steam, electricity, and Information Technology. While today’s AI capabilities may be overhyped, their rapid evolution is undeniable—each use yields results ranging from brilliant to underwhelming, yet consistently improving on a steep trajectory. Ignoring or dismissing AI risks diminishing future prospects in an era of relentless advancement.

My lifelong fascination with computers has driven me to apply technology in ways that excite users but often bore IT professionals, who see such solutions as commonplace. My focus is on users—my true customers—leveraging an intuitive understanding of oil and gas and IT to deliver innovative, problem-solving solutions. This passion fuels People, Ideas & Objects’ mission to ensure the most profitable means of oil and gas operations.

Spending my days exploring issues and opportunities, I find keeping pace with AI’s rapid advancements challenging. (Prospective members of our user community should join me in this task here.) Tools like ChatGPT, Grok, and Gemini leapfrog each other weekly, reshaping the Preliminary Specification, our development, user community, service providers, and industry configurations. While no major changes have been made, AI will likely accelerate our commercial release date and enhance product quality—whether through additional features or improved performance.

In our paper “Hyper Specialization in Today’s AI & IP Enabled Workforce” we explored AI’s dominance in chess and go, where limited variables enabled innovative strategies developed by AI. Programming languages, with broader but defined domains, may soon follow, with AI-driven coding unlocking new methods, innovations and architectures. In oil and gas, our Preliminary Specification’s business focused AI module, integrated with the industry’s scientific foundation, harnesses the fierce AI competition to create dynamic, innovative, accountable, and profitable producers, redefining the industry’s future.

Artificial Intelligence in Oil & Gas 

Oil & gas presents a challenging future in what is a scientific business. People, Ideas & Objects Preliminary Specification will bring about the ability for producers to commercially compete in North American capital markets. Providing for the most profitable means of oil & gas operations everywhere and always. By supporting the scientific disciplines with comprehensive, actual, factual financial information to base their decisions. Creating a dynamic operational environment which ensures alternative strategies can be deployed and producers profitability is maximized. An accounting and administrative resource that is unavailable to them today, and if it were, would the industry be in the state that it's in? Or, would other decisions have been made by understanding what the business impact of their decisions were. 

When it comes to the use of AI in oil & gas. From the commercial side of the business the old adage of “garbage in, garbage out” would need to be created if it did not already exist. There is nothing that can be done with estimated, highly aggregated, then summarized data into information when its data has no consistency or meaning. There’s a reason that the scientific approach in oil & gas has dominated. It’s due to the lack of any usable accounting information. As we hypothesize, producers split their focus to the operational side of oil & gas, the science, and the commercial side which focuses on the corporate accounting, tax and regulatory requirements. The Preliminary Specification resolves this conflict by using the Joint Operating Committee as its key Organizational Construct. Where operations will be supported with a business perspective in which to make its decisions. 

Our Artificial Intelligence module builds off the data infrastructure prepared in our Performance Evaluation (Joint Operating Committee focus) and Analytics & Statistics modules (Corporate focus). It also conducts the processing and generic or base necessities of the producers and Joint Operating Committees data to alleviate the high costs associated with Artificial Intelligence by sharing this base infrastructure across the producers. Allowing producers to limit their AI costs to the high level, competitive advantages they can generate from the tool. 

A Fourth Industrial Revolution 

The FYI Podcast from ARK Investments, featuring Dr. Jin Hyung Lee of Stanford University, highlights the limits of binary hypothesis testing in neuroscience and the need for a holistic, system-level approach—accelerated by Artificial Intelligence (AI)—to spark a Fourth Industrial Revolution. This blog post draws parallels to oil and gas, where similar narrow thinking has led to systemic issues. Embracing AI and human-driven holistic design, as enabled by People, Ideas & Objects’ Preliminary Specification, could redefine the industry’s future.

Past industrial revolutions—steam, electricity, and Information Technology—displaced manual labor and repetitive tasks, freeing humans for higher-order work. Steam powered factories, electricity enabled production lines, and IT automated data processing, each unlocking new value and industries. AI now supercharges hypothesis testing, analyzing vast datasets and running simulations at unprecedented scales. In neuroscience, Dr. Lee notes that focusing on isolated variables, like amyloid plaques in Alzheimer’s, misses the brain’s complex, interconnected systems. AI can process multidimensional data—neural networks, genetics, and behaviours—revealing insights beyond siloed approaches.

In oil and gas, similar limitations persist. Narrow, operational-focused decision-making, driven by inadequate accounting data, has crippled profitability. The Preliminary Specification addresses this by aligning operations with comprehensive financial insights via the Joint Operating Committee, leveraging AI to process complex datasets and optimize decisions. However, AI excels at specific tasks but lacks the human capacity for holistic reasoning. Dr. Lee faced academic resistance to system-level approaches due to entrenched incentives favouring narrow research—a parallel to oil and gas leadership’s resistance to change.

Humans must lead the Fourth Industrial Revolution by framing questions, designing system-level models, and interpreting AI outputs. Just as steam empowered engineers and IT enabled analysts, AI can enhance oil and gas professionals’ ability to build dynamic, innovative, accountable and profitable operations. The Preliminary Specification’s AI module, built on robust data from our Performance Evaluation and Analytics & Statistics modules, enables producers to harness AI for competitive advantage, redefining what’s possible in a capital-intensive industry. This revolution isn’t just about speed—it’s about creating a sustainable, innovative future. 

Arbitrage Strategy, Part V, Conclusion

In our April 7, 2025 paper, “Oil & Gas Arbitrage: The Market Finds a Way,” and throughout this series, we pose critical questions about the oil and gas industry’s trajectory. Can the current leadership address its financial, operational, and political challenges? Is the Preliminary Specification the essential first step to organizing a resolution? How much time remains before control slips away—or has that already begun?

The root of today’s crisis lies in the industry’s chronic overcapitalization of assets. Bloated balance sheets, built on the mantra of “building balance sheets” and “putting cash in the ground,” reflect a cultural obsession with inflated property, plant, and equipment (PP&E) accounts. This practice, a common method to manipulate financials, has led to obscene financial statements that obscure what the industry’s true objective should be: profitability.

The consequences are stark:

• Bloated assets that are worth little or negative value as they demand cash to produce. 

• Bloated assets represent a dollar for dollar equivalent in bloated profitability. 

• Are also represented today in shareholders equity that in almost all cases would be negative if asset values were appropriately restated. 

• Therefore leaving producers with debt that is leveraged in logarithmic measures. 

• Decades of structural working capital deficiencies, and poorly performing cash flow metrics incapable of maintaining basic business operations. 

• Assets that are incapable of performing competitively to generate adequate free cashflow and profit. 

• Leading to declining productivity as admitted in Saturday’s May 17, 2025 WSJ.

• Producers blame their investors' demands for dividends. 

• Unaware that profitable operations provide a producer with independence and control of their direction. 

• Severely deprecated and diminished industrial capacity in its secondary industries. Actively pursuing business opportunities outside of North America and in other industries. 

• Investors and bankers abandoned the producer's capital structures a decade ago due to their lack of understanding why profits are necessary. 

• Which is worse, having investors abandon the producers for cause, or producers doing nothing about investor concerns for over a decade. 

• Acceptance or action by officers and directors to resolve the issue directly. Involves their admission of responsibility and culpability. 

Producers mistakenly equate high PP&E balances with reserve value, believing this upholds their fiduciary duty. Financial statements measure performance, not value. A high-performing producer would deplete greater capital costs on the income statement while remaining competitive. If the SEC prioritizes high asset values, it should reassess its mandate. The Preliminary Specification establishes a culture of reserves preservation, performance and profitability.

Officers and Directors Trajectory

The oil and gas industry’s dysfunction is deeply cultural and systemic. We can either attempt to reform this broken culture or reject it entirely, rebuilding with the vision of People, Ideas & Objects’ Preliminary Specification. Engaging with the current culture ensures its survival, fueled by higher commodity prices that only amplify its excesses and rewards the entitled. This business model is obsolete, has utterly failed, and will continue to fail—believing otherwise is delusional.

As investors demanded change in 2015, they must now lead the industry’s reconstruction through our Arbitrage Strategy. This is a daunting task, with asset values tied to the present value of projected reserves, as determined by reservoir engineers’ industry cost averages, not historical company figures. Producers’ scientists rely on these valuations to prop up balance sheet asset values, but these assets underperform and require significant revaluation to reflect their true worth. Cash-strapped producers are beginning what may become a broader liquidation, where real asset prices will emerge. See here. 

Investors, skilled at profiting from such opportunities, face assets with undefined management and operational frameworks. The Preliminary Specification is the only viable solution, but it requires funding for development. Given the oil and gas ERP market’s historical challenges, I am not issuing equity or debt, as I cannot deliver the Preliminary Specification profitably to shareholders. Our value proposition benefits producers, and if they deem it undesirable, I accept that. However, funding for development must ultimately come from oil and gas production in some form.

Replacement Value of the Incremental Barrel 

What must dictate the price of oil & gas commodities is the high costs needed to bring the incremental barrel of oil equivalent to the market. North American producers have the highest cost production and fill the role of swing producers. Any legacy property with the ability to bring about lower cost production will benefit profitably until such time as that production has exhausted itself. Nonetheless the producers are faced with the high cost of exploring and developing oil & gas production and that replacement cost is the real cost of oil & gas on that market. 

Where else is it expected that producers will be able to acquire the financial resources necessary to sustain their production profile if the appropriate “replacement cost profits” are not derived from current production. If they’re relegated to maintaining a utility styled return on the properties investment, in an industry with an inherent steep cost inflation, investors will forever be at the behest of producers looking for further capital spending. 

An inherent characteristic of the economic “price maker” is that they’ll only bring on new production that’s profitable. What has happened in the process of dividing the producer in two, as our overall hypothesis suggests. Where exploration and production are handled by scientists. And the business is operated with regard to corporate accounting, tax and regulatory requirements by accounting. Two disparate worlds where neither is fully aware of the other's value. As a result, what has driven the interest, vision and direction of the industry since the early 1990s. Has been the pursuit of science in terms of what is the most interesting and fascinating science to be involved in. For example, conventional production has withered to small percentages of the production profile. In natural gas it’s at 21% of the total US production. Despite its cost and deliverability being far more profitable than shale. “Business” is a foreign concept to oil & gas producers, officers and directors. 

What we’ve also seen throughout the past three decades is characteristic of the Keystone Kops. Industry testing unproved hypotheses only to abandon them to the next great thing. SAGD, heavy oil, unconventional until the declaration that shale will never be commercial and clean energy is the future, to a 180 degree return to shale. And as of last Saturday's WSJ, peak shale is here. Never taking a moment to consider what could be done to iterate and innovate through various means and methods to make these areas profitable. 

This on top of poorly considered talking points such as drill baby drill when they knew they’ve all but destroyed the service industry. And when the U.S. president opens the door for them they say that’s not really what they want. It certainly is not the leadership anyone would want, but it’s the leadership we have. They’ve proven incapable of anything but lies and excuses. And make no effort to change their ways. 

Conclusion 

People, Ideas & Objects propose this Arbitrage Strategy to shift oil and gas from its stagnant “muddle through” culture to a dynamic, innovative, accountable, and profitable one, guided by the vision of our Preliminary Specification.

As Milton Friedman noted:

Only a crisis—actual or perceived—produces real change. When that crisis occurs, the actions that are taken depend on the ideas that are lying around. That, I believe, is our basic function: to develop alternatives to existing policies, to keep them alive and available until the politically impossible becomes politically inevitable.

Or Henry Kissinger 

By the time the threat can no longer be denied or minimized, the scope for action will have constricted or the cost of confronting the problem may have grown exorbitant. Misuse time, and limits will begin to impose themselves. Even the best of the remaining choices will be complex to execute, with reduced rewards for success and graver risks in failure. (Henry Kissinger, Leadership)

People, Ideas & Objects believe North American oil and gas is 80–85% of the way to an existential economic, operational  and political crisis. Waiting for it to fully unfold risks catastrophe beyond our current imagination.

The culprits—producer officers and directors—are paralyzed by their culpability and predictable inaction. Their failure has pushed the industry, including its secondary and tertiary sectors, to the brink, necessitating urgent rehabilitation of capacities and capabilities and overall industry rebuilding. 

Our Preliminary Specification offers a vision for rebuilding the industry around reserves preservation, performance, and profitability, ensuring producers achieve the most dynamic, innovative, accountable and profitable operations. Time for debating alternatives has run out. We’ve laid out a framework where every individual and industry organization can contribute to this rebuilding process.

Delaying action by even six months risks irreparable damage. Consolidation won’t solve this, and trust in current leadership has eroded to the point where there’s no longer any expectations of current officers and directors. A “remove and replace” approach, aligned with the Preliminary Specification, must begin immediately—reconciling with the existing culture would be futile.

Success in averting this crisis depends on everyone finding a role in our vision of a rebuilt industry and acting now to build that. If our funding is secured but others remain passive, expecting People, Ideas & Objects to single-handedly deliver, failure is certain. Starting later, amid chaos, will also make rebuilding more difficult. Our funding decisions must be made within six months. If actions are delayed due to a continued lack of urgency, I fear we’ll lose focus when people are consumed by industry related firefighting.