Accounting Voucher, Material Balance Report, Podcast # 6

I’m coming to the realization People, Ideas & Objects have content for several years of podcasts. The Accounting Voucher Module and the Material Balance Report are being introduced today.

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Producers Business Model Has Failed

Today's blog post reveals that oil and gas producer officers and directors have implicitly admitted to misrepresenting facts in mid-2019, leading to an estimated $1.81 trillion in natural gas revenue losses since then. People, Ideas & Objects (PIO) presented the Preliminary Specification as a solution to address the underlying natural gas overproduction, but our proposal was met with misrepresentation, belittlement, and outright falsehoods regarding its methods.

At the time, we raised concerns about the personal liability of officers and directors, suggesting their insurance coverage could be jeopardized if they were found to have known or should have known of methods to mitigate future losses. We put them on notice of this personal risk and offered the Preliminary Specification as a means to indemnify themselves. Ironically, the "common sense" approach of the Preliminary Specification is now being recognized by the industry.

Producer Inaction and Missteps

For decades, oil and gas producers have consistently offered excuses instead of taking decisive action, evading accountability when their claims proved false. When a consensus does emerge, it often appears as a synchronized echo of rationalizations, betraying a lack of genuine intent. Their repeated miscalculations, now being exposed, have proven costly – even more so than the chronic untruths they fed investors leading up to their exit in 2015. 

Today we’re treated to an outright capitulation of their responsibility, authority and care with the looming decline in oil & gas deliverability. A decline as obvious as day comes after night. Or the logical conclusion if an industry leadership were too lazy to generate profits. Destruction that they authored and did nothing about despite their investors frustrations and the Preliminary Specifications availability. Since this is the case they should be shown the door, immediately. 

People, Ideas & Objects has faced relentless criticism and humiliation for advocating producer profitability through the Preliminary Specification. As recently as 2019, our solution was dismissed as unworkable, with producers asserting that "shutting in production incurs significant costs and damages formations." Our July 4, 2019 white paper, "Profitable, North American Energy Independence — Through the Commercialization of Shale," triggered a concerted campaign to discredit us.

Nine months later, the COVID-19 pandemic forced a 25% global oil production shut-in due to collapsing demand. Refineries rejected feedstock, compelling producers to comply. Yet, the officers' and directors' narrative of "can't shut-in" persisted. Our 2023–2024 analysis revealed $4.7 trillion in natural gas revenue losses this century, with 2024 shale gas fetching the lowest inflation-adjusted prices ever – despite being the costliest in history. One must ask which business model is truly unworkable, and if profits, as producers have long claimed, are indeed unnecessary. (Note: Natural gas losses are attributed to a breakdown in pricing, with gas prices diverging from their traditional 6:1 oil heating value ratio to as high as 50:1 in early 2024.)

Instead, and in unison, officers and directors pivoted, declaring shale uncommercial and clean energy their new frontier – without shareholder approval and by diverting oil and gas revenues. Their questionable business acumen was exposed, and they backtracked when these actions were deemed unlawful, suddenly hailing shale as the industry’s savior once more. Which industry will they try next: retail, electric vehicles, or even space? They have recently declared "peak shale" due to the devastation they've wrought on the capacities and capabilities of the service industry. Their leadership has demonstrably failed.

Their adaptability is questionable. In late 2023, People, Ideas & Objects highlighted producers selling LNG at Henry Hub prices (~$2.50), while others bought, processed, and sold it offshore for up to $50.00. Realizing their lack of fiduciary care, a frenzied rush ensued, with producers signing deals for unbuilt, unapproved LNG facilities, which ultimately prompted President Biden to halt new export approvals. This pattern of reactive, ill-considered business transactions underscores the critical need for a cultural and operational overhaul, as offered by the Preliminary Specification, to ensure dynamic, innovative, accountable, and profitable oil and gas operations.

This issue has been framed to provide readers with an updated perspective. Our documentation on the LNG issue began with a series of 54 blog posts starting October 11, 2023, with one entitled “This One’s Nuclear.” This series addresses the producers' common refrains about profits being unnecessary, focusing on "cash flow," "building balance sheets," or "putting cash in the ground," as well as their well-known chorus regarding their inability to shut-in production.

Things People, Ideas & Objects Have Noticed

Our collaboration with producers reached an impasse, forcing People, Ideas & Objects to fundamentally change our strategy. We now operate differently, leveraging our distinct strengths: our user community, Intellectual Property, and research. We've declared that our user community is, in fact, our customer, enabling us to reduce our software delivery timelines by years. We also brought to light the officer and director insurance issues producers have been exposed to. These 40 blog posts, beginning with "Watch the Directors on the Boards" on October 15, 2018, can be aggregated here:

We therefore put officers and directors on notice: their (in)actions were exposing them to personal risk of shareholder lawsuits. They demonstrated that they could act swiftly when properly motivated by immediately increasing their insurance coverage by 75%. However, this may have only provided a false sense of security. If it can be shown they knew—or should have known—about the financial losses under their watch, insurers could drop their coverage, leaving them personally exposed to any shareholder or debtor litigation.

While the outcome of any litigation is unknown, the striking lack of executive turnover across North American producers is telling. Are they now trapped, unable to leave without the company’s financial protection? People, Ideas & Objects offer a way out. Our "Issue Mitigated, Nothing Litigated" proposal is a standing offer to remove their personal risk. By using industry dollars to build the "Preliminary Specification," officers and directors can undertake their best efforts to resolve the underlying problem, demonstrate responsible action, and in turn secure their safe exit.

A Modern Day Stick in the Spokes

I was perplexed to find the following information appearing on my account in Perplexity: and comments such as these, which seem to suggest it's "common sense" and "always has been" to shut in higher-cost production, are wholly disingenuous. I am pleased that this is now the prevailing thinking, and it reflects, at a minimum, the market's acceptance of the Preliminary Specification rather than any genuine change in the officers' and directors' thinking.

The assertion that this is not a willful statement by officers and directors is based on a reflection of the insurance issue. The statement more or less admits their past positions were wrong and that it was common sense to do as the Preliminary Specification prescribes. Why then were the lies told in 2019 regarding our business model being unworkable? Why the claims that the reservoir would be damaged if such a strategy was attempted? It was “collusion” to do as we prescribed. Yet nothing has been done to mitigate these business losses since that time?

According to our calculations, $1.813 trillion of the overall $4.7 trillion in natural gas revenue losses have been realized from July 2019 to December 2024 due to chronic and systemic overproduction. This loss is attributable to the willful misconduct, negligence, and misrepresentations by officers and directors. They knew, were aware, is now considered common sense, and yet continued with their claims about "Trump this or OPEC that," not praying hard enough for a cold winter, or waiting for the market to rebalance. My two favorite excuses were that they "remain profitable in a period of declining prices from $100, 90, 80…$35" and that they are "innovative." Would an innovative industry sit on its thumb for this period of time watching this level of devastation? The only innovation I’ve witnessed is the ability to continue profitably in a declining price environment – an innovation in historical accounting? Bernie Madoff would be proud of them. 

Conclusion

Investors declared producers' business model failed in 2015, losing faith in officers and directors and their capacity to address the issues. While investors still own the producers, they no longer invest further, seeking to extract their investments through dividends. The loss of investor trust is unquestionably the most consequential act an organization can face. And for a decade, nothing has been done about it other than to continue with inappropriate behavior. I have to ask which is worse: the investors' loss of faith, or the decade-long lack of action. Flip a coin, I say.

One of the arguments investors did follow through on was upgrading their ERP systems to tier 1 vendors. SAP was unanimously chosen, specifically to avoid People, Ideas & Objects With Oracle Cloud ERP. Of those that did implement the solution, it is unknown if accountability has improved. We know the performance, reporting and integrity of the firm have not.

Shale is possibly the greatest endowment of wealth ever granted. Yet, in the hands of these officers and directors, it has been all but destroyed. They are culturally fixated on their past industry experiences, and that industry culture, developed over the past four decades, which has eroded the industry's competitiveness to what I would estimate is a 30-40% commercial level. Each North American producer's financial statements are cookie-cutter replicas of each other. The only differentiation is the volume produced. They possess massive capital assets with little to negative working capital and eroded shareholder equity when considering a pro-forma adjustment of at least 65% of property, plant, and equipment should move to the income statement in the current period. Therefore, a producer's financial performance is incapable of dealing with logarithmic levels of debt leverage. "The value is in the reserves," they'll say, not realizing that their inability to produce them profitably renders them of no value or less.

When officers and directors are directly responsible for this level of damage and destruction, it is disqualifying. What's worse is they've had the means at their disposal to earn all the money they could ever have possibly needed if they had even tried for five minutes to earn a profit. They were given the chance to do so by their investors and the means through the Preliminary Specification. Their opportunity was as great as the destruction they chose to author instead. When People, Ideas & Objects asserts we’re rebuilding the industry and producers through our arbitrage strategy, it now seems like the only rational choice.

Proof that the business model inherent in the Preliminary Specification is workable has been evident to those who've read it. People, Ideas & Objects' pursuit of this oil & gas issue has been appropriate. It was always designed as a replacement due to the scale of this issue and the difficulty of dealing with the persistence of a corporate culture. A time to choose arrived long ago, and it was obstructed by the vested interests of the now failed business model. We need access to oil & gas revenues to fund the development and long-term support of our software and services. Our Profitable Production Rights are the method we've chosen, and we are now turning to officers and directors to fund us on that basis.

For officers and directors to mitigate the personal risk they may find themselves in, the choice for them is to decide on a new direction and to fund that. This can be done by adopting and implementing two strategies of People, Ideas & Objects. Providing evidence of their best efforts to remedy the issues alleviates their risks. By implementing our “Issue Mitigated, Nothing Litigated” and “Arbitrage Strategy,” they can quickly relieve themselves of their obligations to fulfill their fiduciary duties. I am not a lawyer, and this is not legal advice and should not be considered as such. It is based on my limited understanding, which is heavily influenced by my conflict of interest.

Podcast # 5, Our Response to an RFP

I’m pleased with the two podcasts being published this week. Our podcast today is based on the wiki page of our RFP Response. I’m getting better at prepping these however there are still some minor issues that aren’t too bad. To verify any questions you may have please refer to the text of the wiki entry. 

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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.