Leadership...

[Leadership] [MIT]

Another topic that everyone understands but is extremely difficult to quantify. The MIT videos are breathtaking and this one is the finest to date. A leadership forum of the following four individuals.

• Rosalind Williams, The Robert M. Metcalfe Professor of Writing, Director, Program in Science, Technology and Society.
• Robert S. Langer, Institute Professor and Kenneth J. Germeshausen Professor of Chemical and Biomedical Engineering, 2002 Draper Prize Award Recipient.
• Robert Metcalfe, General Partner, Polaris Venture Partners, Inventor of Ethernet, Founder of 3Com Corporation.
  
• Phillip A. Sharp, Institute Professor, Founding Director McGovern Institute for Brain Research, Founder of Genentech, Nobel Laureate in Medicine 1993.
  

A truly impressive group talking about leadership in a complex technology driven world. This is a must see for all, no question. I will only highlight the points that they make of what a leader is.

Necessities of Leadership

• Raised the concept waging war, and the courage to wage the battle.
  
• Management is not Leadership
• Willing to be obnoxious
• The enemy in the war is the status quo.
• Status quo does not want to be innovative.
  
• Learning to schmooz.
• Integrity, live it, do it.
• Joy in excellence.
• Effective at establishing goals and objectives.
  
• The role of a prime mover is required, so I'll (the leader) volunteer for the job.
• Persevering, not giving up.
• That it helps to be intelligent.
• Can draw on sources of strength and power.
  
• A taste for the first rate.
• Broad interest.
• Strong writing and other communicative skills.
  
• A strong tie in to the world of sports.
  
• Choosing to do it.
  

I don't think that I have seen a more comprehensive and valuable list of the attributes of a leader.

A thought about...

[Organization] [Files]

Had a thought today about the manner in which an oil and gas company will file all the electronic versions of their information. Also thought that since the use of electronic files would probably reach 95% of all documents, it was an important thought.

Filing of the land, accounting, production, engineering, legal, financial, email conversations, text, voice, video, JPEG, .pdf, or in other words any and all file types, existing or to be developed. Containing all manner of well logs, contracts, vouchers, legal agreements, accounting procedures, land operating procedures, construction ownership and operating agreements, mail ballots, afe's, I think you get the point, everything consisting of all types of files.

And store them by Joint Operating Committee as the root of each directory.

So if I want to review the recent log results of the step out wells drilled in the xyz unit, I think I'd be able to find that in about two seconds, maybe three.

The Joint Operating Committee is not just the natural way of organizing a company, but the files associated with them as well. With the security infrastructure that I talked about here, these encrypted, domain based, access controlled, files would only be accessible and readable by any employee of the companies affiliated with that Joint Operating Committee. This Genesys system just keeps getting easier.

Two types of workers and work...

[Opinion]

I must apologize for where I heard this, it was on the Internet or some other electronic media and I can not find it on google. But there is a saying that sticks in my brain about the current situation the global economy is in.

The saying

• "In the very near future there will be two types of people, those that do the work that the computers can not do, and those that do the work to make the computers do the work that computers do."
• (unkown)

I can not state how much I feel that this is going to be very valid in the near future. Many people have avoided the use of technology since the dot com meltdown, those that had the aptitude and orientation to this type of computer work pursued it almost in silence it seems. Now, I think it might be too late to learn the concepts that have been established and built upon in these short years.

I also would not want to operate within a competitive landscape of 5+ Billion other manual laborers looking for work.

Research

One of the most interesting and difficult attributes of this blog, both as a reader and writer, is the broad scope of the information contained within the topics covered. Research is one of my favorite activities and something that needs to be discussed in order to bring all the issues up before the development of the actual Genesys code begins. I am also attempting to appeal to the engineering and earth sciences to show there is a better way.

Dr. Jurgen Habermas developed the Theory of Communicative Action and Discourse Ethics. A good summary if you can stay awake is located here. What I understand from these theories is as follows. That research takes place only in the areas that forces such as society, economics and people influence it. Pure research is really driven by agenda's that are consistent with the needs of society, economics and people.

The purpose of this entry is to apply the theories that I use to support the thinking that systems developments define and constrain (Giddens & Orlikowski) organizations. It is therefore easy to change the oil and gas industries innovative performance. All that is required is the systems be developed to define the organization. I have selected the organizational focus around the joint operating committee (JOC) in order to align the accountability of the hierarchy with the legal, financial, cultural, and operational decision making frameworks that reside with the JOC.

This innovative oil and gas theory is based on a variety of others theories and has significant support from those. This entry will list those authors and their theories and is intended to introduce these here now and for future discussion. And as Habermas' theories denote, I have a bias and agenda to ensure these theories are fulfilled.

If there are any additional topics or areas of interest that you feel should be raised, please join in and will add them to this extensive list of topics.

• John Nash
• The unauthorized biography of Dr. John Nash brought fame and recognition in the movie a "A beautiful Mind" by Sylvia Nasar. The movie and book provide excellent entertainment and also provide a sound understanding of the "Nash equilibrium." Dr. Nash was the first to receive the Nobel prize for economics in the category of "Game Theory" ISBN 0684853701

• Thomas C. Schelling
• Dr. Schelling is the Nobel prize winner in 2005 in economics, also in the category of game theory. Dr. Schelling has been key in forming the development of the strategy of conflict. The book he wrote in 1960, "The Strategy of Conflict" which makes for a great handbook on this key attribute of a leaders toolbox. ISBN 0674840313

• Giovanni Dosi
• One of the finest and most respected leaders in the area of innovation. Dr. Dosi has written many excellent articles that identifies the process' of innovation, that are measurable and reproducible. Dr. Giovanni Dosi's landmark 1988 paper "Sources, Procedures and Microeconomic Effects of Innovation". This was the main document of my "Plurality should not be assumed, without necessity" Masters thesis, and the source of the thinking behind what an innovative oil and gas producer will be. Dosi sets himself apart from the rest with his writings and books. Based in Europe he is not heard of much in North America. I highly recommend sourcing his works. Anyone interested in reading my application of Dosi's theories can email me for a .pdf of my "Plurality" document.

• Anthony Giddens
• Dr. Giddens wrote the "Constitutions of Society", the Theory of Structuration in 1984. This theory documents that societies, people and organizations need to progress together, without the consistent movement of all three, failure will occur. In my thesis I suggested that people and society have moved as a result of technology, and organizations based on the hierarchy have failed to keep pace. The need for change or failure are the two options. This blog is about taking the change option. Dr. Giddens is now a trusted advisor to British Prime Minister Tony Blair.

• Wanda Orlikowski
• Dr. Orlikowski builds on Dr. Giddens theory with a "Model of Technology Structuration" in her document "The duality of technology : rethinking the concept of technology in organizations. Most of Dr. Orlikowski's work centers on collaborative environments that existed in the 1990's, that being Lotus Notes. (This document is available at the link of her name). These are published on DSpace a joint venture between MIT and Hewlett Packard and available to anyone. She also introduces the motivational and cognitive paradox as constraints.

• John Seely Brown and John Hagel
• on the organizational and business implications of moving to the paradigm of the web services model and its disruptive application. Dr. Brown was the head of the famed Xerox PARC and Hagel was a Mckinsey consultant. Their understanding of these topics is very strong and are leaders in many of the business areas regarding web services.

Oxford, MIT and Stanford have all released major portions of their intellectual property on the Internet for public consumption. I highly recommend these areas of excellent search and discovery. As I stated earlier, if there is any other items that may be of interest to the many readers, please indicate so.

Technorati Tags: Call-to-action, Dosi, Energy, Genesys, Plurality, Structuration, Thesis

Update to technical change entry.

[Database] [Technology]

Today Ingres announced some major additions to their team. It is as a result of these and the quality of the technology that they support that I will be making another technology change in moving from Oracle to Ingres and not to IBM DB2 as previously stated.

The cost to use the system will be lower and Ingres' open source database will be able to grow with no other constraints then relational theory.

My apologies for not fully evaluating the change from Oracle, it will not happen again.

Dr. Lester Thurow, and blogs...

[Research] [Innovation]

I watched another excellent MIT video, this one by the prominent economist and former Dean of MIT, Dr. Lester Thurow. In his discussion of China, he made mention of an interesting situation that caused me to reflect on this project and the significance of this, and for that matter all, blogs. I will follow up on some of the other points in his discussion in another entry, I just wanted to get this one specific point out right away.

He states with respect to China, that its government is able to undertake 2 to 3 "big" things. But what the government has lost is the ability to do is the 1,000's of things that need to be done, or should have been done. Denoting that over time the central government is loosing its influence and control.

I find that, from my point of view, this mirrors the situation with the corporate hierarchies in oil and gas. Many things need to be done that are not being done because the industries corporate hierarchical structure is unable to identify or deal with all the many points that need to be covered. The budgetary process, command and control are to a large extent, getting in the way. The ability to do just enough to replace their production is becoming more evident. Ultimately leading to a situation where its a slow and steady decline of their existing business models.

Dr. Thurow notes the situation where the Chinese government was unaware of any developments in a remote area until such time as a major airport became operational and was putting planes in the air. Not until these planes showed up on radar did the Central Chinese government know of the airport.

It may be controversial to suggest that the oil and gas firms are unaware of significant developments within their domain of command and control. Like the Chinese communist government, companies are able to do two or three big oil sands developments, however, at what point in time does the proverbial hamster prove that it is unable to run any faster. This will happen and the failure of these organizations, and communism in China, is imminent. Only after their total failure will they concede this point.

An alternative solution needs to be arranged. That is the purpose of this blog. To take up the effort of the several thousand "other" things. Groups of individuals working to provide the marketplace with the energy they need to compete and to fuel their economies. This alternate method of organization and system developments here will provide more people with more choices to continue to work long after the traditional corporate organizations have ceased to provide any economic value.

To me this raises a number of questions, where do we want to be, where do we need to be, where will we all fit into this revised system? We should not wait until the failure of these organizations is in the past tense. As I have mentioned before, my role as head of the revolution is becoming more familiar and down right comfortable, and there is lots of room for everyone.

Playing in the sandbox...

[Tools] [Technology] [Vision]

If you don't like technology and I can understand most people's concerns, please read on as this is directed at the audience of this blog, the engineers and earth scientists of the oil and gas industry. I believe that what has happened in the past 3 to 4 years is approximately equivalent of the Internet in its impact and effect on everything. This weekend I had the opportunity to download both NetBeans 5.0 and Creator 2 from Sun Microsystems.

The Internet has flattened the earth and provided an infrastructure for communications, transportation (or the lack of unnecessary transportation) and methods of financing that are new and innovative. An increase in any one of the three components will expand economic activity. Clearly the Internet has begun to expand the global economy. Taken in the context of the technology vision that I have stated here, lets build on that from a tool point of view.
Java objects inherit from the hierarchy of objects, starting with the top level object, that being oddly enough "Object". What has happened in the past 10 years is a series of objects have been built to provide capabilities for the language to deal with much of what is required. Most of this code has now been codified and available free with the overall Java infrastructure. Now with these Java tools most of everything that can be imagined, can be built. It's like Lego. Apache has been a cornerstone of the open source movement and Java is its language. What can be done with Apache and Java is literally anything.

Over the past 4 years the open source movement came to Java development tools. IBM started it with Eclipse and Sun joined in with NetBeans, Java Studio Creator and Java Studio Enterprise. State of the art tools that used to cost upwards of $10,000 can be had for $0.00. The quality fit and finish are amazing.

Others have joined in by bringing specialized tools that provide services to the main Integrated Development Environments (IDE's) that augment the overall Java environment. Tools like Apache Maven, W3C's Amaya, and Stanford Medical's Protoge to name just a few. All of these parties have been absolutely out doing themselves in an overheated competitive knock em down, drag em out slugfest.

This point is critical. If everyone has access to the language and everyone can use the language, then these IDE's are the equivalent of providing a printing press for each and every person that dares to challenge their imagination. In terms of speed that at which this is happening, it is truly frightening! Frightening when you consider the ability to have each individual with the equivalent of a printing press was only achieved in the past 5 years by way of the Internet!

These tools bring the complexity of the Java environment and infrastructure to anyone with an Internet connection. These tools are being used in ways that are truly breathtaking, automation of human thought is not only possible, its being done. As the imaginations of scientists and engineers find these tools, history will be made.

So grab a tool and learn Java. Dr. Gosling's little invention is hitting its stride and releasing the collective understanding of six billion people. I highly recommend that novices use Java Studio Creator 2. Its all that you need. Taking the Java Server Pages and Java Server Faces technology to its ultimate implementation. The tools comes with a built in Java EE server, free, and a database as part of the IDE. Making the entire development model available for anyone.

This entry is so very important for the users of the Genesys system being built here. The world of the information technology developer has disappeared. Drawing a strong analogy to the distribution of the English language, if everyone still required scientists to read and write for those that couldn't, it would have been a pretty bleak world.

A parallel situation has occurred. The technology people that I see in corporate America have been selling Windows related products for so long, they think they can continue the scam for as long as their careers will last. Anyone that is worth their weight in gold has moved to the open source environment and are providing a break from the Microsoft facade. They expect the user to pick these tools up and use them. I am not alone in my encouragement here. They have their own ideas and are implementing them. They do not want to be servicing users most basic of needs.

I also draw a strong analogy to the GUI. Not many users have to drop down into the command line to operate a computer. Those that can are aptly rewarded, but use of a computer requires most users with the ability to just point and click. The IDE is the same point as the GUI was 15 years ago.

These IDE's are not the domain of "technologists." The English language has not been the domain of the all powerful word scribes. Are the IDE's as important as the English language? Yes. And therefore need to be a part of vocabulary and toolbox of anyone and everyone. We can't not progress any further with translators. They have more interesting work to do, and so does everyone else.

The need to have people literate in these tools and languages cuts down on the time to have the collective imaginations fulfilled. The user can prototype their concepts in Creator, publish them in this environment we are creating here, and have someone more capable with the code and tools develop and build a better Genesys system. This environment of learning, building off each others ideas can lead to many discoveries, but we have to get rid of some of these technologist labels that we have come up with in the past few years.

The smartest developers that I have met are usually well educated in another area, particularly pure math. Stanford Medical's Protoge tool is as a result of the PhD's needs. So they built it themselves.

We're all working together, sharing and building. So grab a tool and build a sandbox for yourself. In no time we will begin to have this environment producing some spectacular systems that'll enable the work in the oil and gas industry to be fun, I guarantee it. Your imagination and the automation of thought is waiting. Where this will lead is up to you. My favorite place to learn about the Java language is here. Dive in the water is fine.

A change in the format of this blog.

[categorization]

The experiment of this blog appears to me to be working. One thing that is very obvious is the scope of topics covers pretty much anything and everything from an oil and gas point of view. The variety of topics are as diverse and varied as the following list.

• Information Technology Management.
• Oil and gas, geological, engineering, geophysics, and physics.
• Accounting
• Innovation
• Management
• Academics
• Tools and programming languages.
  

Therefore from now on I will be putting the general category of the entry will fall under in [brackets] just under the title. This will enable users with the ability to better conduct searching and sorting of the various categories in the future.

"Partnership Accounting", part I...

Traditionally the Chairman of the Joint Operating Committee's operated the joint account much like a limited partner would. In the past the company that the Chairman represented would have built up the capability to manage the joint assets effectively with the help of a few key suppliers. As operator it was predominately up to them to implement the budget and programs that was agreed to amongst the other non-operating partners.

In the future, I believe, contributions of the engineering and geological expertise residing within all of the organizations represented by the joint operating committee will need to be called upon due to the complexity of the operations and advances in the sciences. The shortfall in human resources will be the secondary reason that each producer will actively participate. It has become progressively more difficult for a producer to have the internal capability to conduct all the operations they as operators of the joint operating committees are required to complete. This will only expand as the exploration focus becomes more predominate in oil and gas.

It is also necessary to ask, is it worthwhile to have essentially duplicate, non-cooperating and non-collaborating technical capabilities developed to this level within each company? Would a looser coupling of qualified capabilities, assembled and disassembled self organizing teams for each specific technical task be possible? What type of enterprise, business oriented software would be required to support that type of team? That is the question that needs to be asked here, and it is not the specific solution that I am suggesting here, only to highlight one of the many issues that need to be addressed in developing this software.

The key component of the system will be the ability to represent the understandings and operations of the engineering and geological team as they conduct those operations. That each producer is able to subsequently account for the joint transactions based on their individual policies and standards. This includes the differing international accounting standards, FASB, SEC and other regulating bodies of the accounting world.

I can assure you that the ability to follow the business has been a traditionally difficult area of accounting. Geologists and engineers are very creative deal makers when left to their own devices. This has created accounting issues that have caused more problems then they are worth. The inexperience of the accounting staff to represent the deal within the constraints of the accounting system is the problem, in my experience. I believe fundamentally that the self organizing technical teams, and creative deal making are all part of an innovative producer, and the accounting system should accommodate that flexibility.

I also believe that anything that can be represented mathematically could and should be adopted within the accounting system. That a system built exclusively by oil and gas people for oil and gas people to be used on oil and gas operations is something that has never been undertaken before. SAP was built to handle complex supply chains, primarily in manufacturing settings, in my opinion it has no purpose in an oil and gas setting.

The issue therefore comes down to partnership accounting. A well defined area of accounting with its own unique and special issues. Issues that are consistent with those being addressed here for oil and gas producers.

For the purposes of this entry I am going to introduce the main issues, which I have done, and the detail that supports some of the aspects of the solution and requirements. This "Partnership Accounting" section will be visited as time passes in order to enable the full discussion of this issue. Here are some of the components of the differences between the partnership accounting and traditional accounting as we know it today;

• Accounting for capital and operating costs sourced from suppliers would remain mostly the same.
• Contributions made by the staff of a producer needs to be costed and added to the joint account.
• This is done for the field staff, what about the head office staff?
• As opposed to overhead allowances, a means of capturing these costs in the charge out rates of the field and head office staff? What about the costs of capital?
• Contributions made by many of the producers that are traditionally designated as "non-operator."
• Partners being equally active and contributing time, effort, intellectual property and capital, probably in a disproportionate amount compared to their interest.

The last point that I will make here is the issue of how freelance workers is recorded and compensated. Ideally having a collaborative work order system to deal with the potentially large volumes of people that work within a joint account. For example, how many employees are currently active in each joint account today?

These people are the highly specialized engineers and geologists that I noted in an another entry. Referring to the fact that their specializations required them to work for a large number of producers, representing many joint operating committees, having their own special suppliers and working on 100's of wells per year. These are also needed to be addressed in this discussion.

Technorati Tags: Adaptability, Energy, Genesys, Intelectual-Property, Partnership-Accounting, Technical Vision

Dr. Thomas W. Malone, the Patrick J. McGovern Professor of Management, MIT Sloan School of Management

Another MIT video that provides direct support for the concepts put forward through this blog. Dr. Malone's presentation talks about how new technologies and management that will change how work is organized. Again, I highly recommend that you view this video. Dr. Malone has also published a book entitled "The Future of Work" with an even stronger subtitle of "How the new order of business will shape your organization, your management style and your life." (ISBN 1591391253)

Starting off the presentation of how organizations change by highlighting the significance of both Wikipedia and eBay. Both of these organize large numbers of people toward similar goals. Dr Malone frames his discussion in the historical references of organizational progress.

• Hunting and gathering through informal organizational structures such as bands.
  
• As civilization began to evolve the rise of societies, emperors and kings.
  
• Finally democracies being the most successful form of large organizations to date.
  

Attributing these organizational developments to one single factor, the declining cost of communications. Dr. Malone draws a strong analogy to the ability of the Internet to make corporate organizations transcend the constraints of societies, emperors and kings. Noting that both eBay and Wikipedia are democracies.

One fundamental change that is different from the manner in which societies progressed is the time factor. What took centuries and significant discoveries, like language and the printing press, to enable the ultimate evolution to democracy is happening to business very quickly.

People are ultimately driven by creativity, flexibility and the enjoyment of the work they do. These are the forces behind the move away from a centralized hierarchy, to support a decentralized, or as I would term asynchronous, manner of work. Dr. Malone suggest this transformation to decentralization also has phases which he describes as;

• Loose Hierarchies (Past)
  
• Moving to democracies where actual voting is conducted (Present or immediate future).
  
• Markets being the ultimate form of organization where each individual is in control of their domain. (Future).

Dr. Malone moves on to the management style necessary for this transformation. The old way of command and control, naturally, are out. He suggests that co-ordinate and cultivate are the two manners of management style needed in the present and future tense. This reflecting how well blogs are able to informally organize the solutions.

Noting that the overall efficiencies of each method expand from 30% in the past to 100% in the future. On the basis of that factor alone, oil and gas firms should embrace this blogs proposed form of organization, the joint operating committee, and fund these software developments through the PayPal system that has been established.

Finally Dr. Malone notes that individuals need to learn to listen to their inner voice. To understand these changes and move with them.

A personal observation of mine that I attribute to this entire process, is the volume of sick days taken for the classic "mental health day". I have to say that it appears from the outside to be an epidemic, that the command and control are powerless to deal with. I recommend that everyone take another sick day, and spend their time reading this blog and the valuable MIT video site. Start getting in touch with your inner voice as Dr. Malone says. If you don't work in oil and gas, take the day off anyways.

After all what can the organizations do?

January Business Report

I will be preparing monthly reports for the accounting of this project. These entries will consist of three or four components comprised of monies raised, contributors, budgeted items, wish lists, project deadlines and the status of those deadlines.

The objective of this months report is to start the development process with some tools and infrastructure.

• Revenue to date: $0.00
  

February 1, 2006 budget items. (All costs are in U.S. dollars and include a 33% premium for the development copyright fee.)

• Sun Grid The first thing we need is a home for the code. The grid provides everything we need in this instance, and the Grid that I selected was Sun's. At $1 per processor hour, a very affordable way to secure the resources we need. I think that our first years requirements would be amply satisfied with 10,000 hours of processing for the remainder of 2006 calendar year. Total requirement = $13,300
• PPDM (Public Petroleum Data Model) Makes our development life a little easier through a standard database model. Fortunately we have projected revenues of < $1 million, therefore, our fees for membership to access the data model are small. Total requirement = $750
• DB2 database and part time DBA, Total requirements = $57,500.
• Collabnet. I would like to have a generous budget for this critical tool. Provides the code management, community process, project management and issue management. Budget includes tools, appropriate setup and consulting services. Total requirements = $34,500
• General and Administrative costs, January to June 2006 Total requirements = $69,000
• Membership in W3C Total requirements = $8,500
• Total Capital and Operating costs... $182,750
  

Notes:

• Sponsor commitments, producer commitments, user commitments are all accepted.
  
• Please recall that this community is and will be supported by the producers. Based on a $ assessment per barrel of oil.
• For 2006 the assessment was fixed at $1 per boe per day per year.
  
• A company such as Encana in Canada would therefore be expected to support the community to the tune of $700,000 for the 2006 calendar year.
  
• These budgets are being proposed as a pay as you go basis for 2006 to support the community and ensure the community develops in the manner that is expected.
  
• Your donations are greatly appreciated, no donations means no work is being done.
  

A technical change...

I am going to move from Oracle as the underlying database. A number of factors have contributed to this decision.

First IBM's DB2 now has a free open source version of their DB2 offering. Although restricted in terms of the number of processors that are usable, the solution is free until such time as we probably need a commercial or deployment version.

Second I spent the painful day of attending an Oracle "architects" presentation. These people should seriously look at their offerings, people and purpose in life. Oracle is a company that has seriously lost their way. Sell the stock and warn the neighbors.

One of the determining factors in moving away from Oracle is their Business Processing Language or BPEL. This is the XML ontology that I have been discussing here for the last couple of entries. They are recommending to their clients that the business logic needs to be captured at this level. This requiring a rewrite of the business logic that was initially written in the database, then in Java and now in XML. I don't think so.

This is a poor attempt to have the clients locked into the Oracle XML ontology. The database is no longer a competitive differentiation. They can't differentiate themselves on the Java platform, that's Sun's technology, and now with the majority of the also ran solutions under Oracle Fusion middleware, the firms hold in the technology marketplace is the ability to keep developers and users busily locked into writing XML. Nuts. I am surprised that a company of this size would attempt such a transparent real estate grab. Shame on Larry Ellison, he should know better, as should I.

Dr. Rebecca Henderson on soft standards.

Another MIT Video. This one presented by Dr. Rebecca Henderson, MIT's Eastman Kodak professor. She prepared an excellent paper "The Next Tech Boom" in 2002 that I referred to in my Plurality, May 2004 document. If you can source her document, I would highly recommend it in combination with this presentation.

Dr. Henderson's presentation talks about the open standards vs. closed proprietary systems or soft standards. Answering why the push for public open standards, and why most markets have, or will, move toward public open standards. This is a particularly interesting discussion when taken in the context of the open source software development models.

Of particular interest, the XML ontology or metadata for the Genesys portal will be a private open standard on a basis that is derived by, and similar to that of the Java programming language and its associated community and environment.

Pros and Cons of open standards.

Here in Canada many of the government initiatives have embraced "open standards" over the history of the oil and gas industry. This openness provides an understanding of the value of open standards and their commercial application, but mostly it's benefits in terms of competitiveness.

Oil and gas wells drilled in the province of Alberta are the commercial interests of the individual oil and gas producers. The information regarding the well that has been drilled is publicly available. The data contained within this information is comprised of the work completed down-hole, access to the engineering methods that were used are public domain. When a well is classified as an exploration well, it can obtain tight hole status for a reasonable amount of time after rig release, to ensure that no valuable secrets are disclosed to soon. For the majority of the development wells, I can review the methods of completion, the footage drilled, casing set and all manner of data and information about what was done down-hole. I can also review the production, its history, on a consistent and updated monthly basis.

What I am discussing in this entry is an extension of these concepts and associated data models of a producer. Note we are talking about data models and ontologies, not actual data, that remains proprietary and is never published.

It is my understanding that in other regions, the information is unknown by anyone other then the producer and the government of the jurisdiction the well was drilled in. Has this provided any benefit to the producers that operate in the "open standards" of Alberta? I think it has, and as a result much of the associated risk in drilling within a certain region can be mitigated by the amount of public domain information. Learning from others mistakes, building off what was successful in the past and being innovative are easier with the availability of this information.

The access to this public information has sponsored a less secretive mindset in the culture of Alberta vs. what operators in other countries experience. Many American firms have come to Canada's oil and gas industry to determine how this fundamentally different system operates. Of note, many of the foreign firms fail!

So open standards do not on themselves provide the ultimate competitive manner of operations. It helps, and I have to say that the amount of information that is shared in the engineering and geo technical areas are always subject to, and will be so in the future, a vale of secrecy. The amount of sharing in the Genesys portal environment will require a higher level of collaboration then what is currently done, that is a given.

Future competitiveness will not reside on what one individual or producer can do, but on the basis of what a cluster of companies can do in order to attain greater reserves and deliverability. There is too much information and specialization in the sciences of engineering, geology and physics to keep ones cards to close to the vest.

These changes are cultural and the industry needs to understand that there really is not too much value in maintaining a secretive position. As much as we need to progress in terms of our innovation based on the science, we have to deal with this cultural issue of sharing of information.

It is ironic to me, that to a large extent the majority of the oil and gas industries technical advances are not learned through the organizations where the scientist works. Most of the discoveries are learned through the associations within the industry, journals and word of mouth. Little outside the manner of how the process of drilling and completion within the firm is learned within the firm. The majority of what is learned is how to get the things you want to do in the "business" environment of the organization.

It is this business environment that needs to change. The copyright act only provides authors protection for works that are published. A secret is useless to any scientific discovery. The journals that are used for peer review and publication are used by the scientists to attach the copyright to the overall concepts developed. Firms that have unique methods of discovering oil and gas should also realize for anyone to copy their methods, overall they will learn very little. This cultural secretiveness is counterproductive to the future of the oil and gas innovations and needs to change. It is the business environment that holds on to these myths and the business environment that has to change. The scientific community has been at the forefront of copyright law since its beginning. The freedom to access others concepts provides the real scientific discoveries today.

One of the immediate advantages of the commercial open standards is the different competitive offerings can inter-operate effectively. Although I can foresee the entire energy industry using the Genesys system, the reality is that other systems, based on different organizational models will be developed. Producers using either system need to inter-operate in this new scientific frontier. The need for the commercial system to understand the information in other systems is critical to the overall progress of the industry. Sharing within the scientific communities is not a cultural issue, I don't think, as much as it is a business requirement. Scientists are well attuned to the value of sharing of information, it is the business people that need to learn the value of scientific sharing. Hopefully the Genesys system will be the beginning of the understanding and application of this concept. Otherwise both this system and / or the industry may fail. These failures not necessarily being mutually exclusive.

Dr. Henderson notes that one of the things that Moores law is making possible is the transactions and interactions can maintain their uniqueness, yet still maintain elements of commoditization. Operating in the future will require a somewhat "standard" means of interaction from a business point of view.

To discuss this point further I want to put the topic in the context of how I see the future oil and gas worker. An engineer logs into the Genesys portal, and is available for work on one of many of the open projects she is responsible for. The interaction volumes are tremendous. Operating for a variety of producers the engineer has specialized in completions of Viking sand formations in southern Alberta. Working for the majority of the producers that operate in the region and zone, the engineer has been able to successfully develop her own capability of completing the well's more successfully then others. Working for over 50 different producers and operators, the engineer is able to access the information on over 200 joint operating committees, representing almost 1,000 wells. The hand picked group of service companies are familiar with the engineers methods and have also specialized in servicing these completion concepts throughout the province.

This volume of theoretical interactions needs to be managed as effectively as possible. How, with the current demand for drilling activity necessary to sustain the production deliverability, is the engineer able to communicate effectively with all the producers, suppliers and others in this environment without standards. If the expectation that the need to alter the methods in order to meet the needs of one special producer, the requirements of dealing with one exception has created the proverbial stick, and has broken the first of many spokes. All efficiencies are lost due to the inability of one producer to be on the standard. Dare we begin to discuss the implications of non business standards within the renewed focus on exploration?

When standardized, the scope of interactions grow exponentially. This was noted in Sir Tim Berners-Lee's discussion on MIT video. As I also stated in my earlier entry entitled Sir Tim Berners-Lee, I will license the ontology, or metadata, of the interactions and make the standard open. This will ensure that all competitive parties will be available and able to interact with the Genesys system.

Private ownership of the standard is maybe an unforeseen consequence of copyright law. I certainly am not going to renounce the copyright or do what many would assert as the "right" thing to have the ontology as a standard. I have spent to much time and money, and the costs are too high, both past and prospectively, to take that road. However, as I mentioned in the Berners-Lee entry, I am not a troll and the license will provide the effective "public" face on this private standard. Openness of the ontology and the source code are not debatable. Access will be provided for security and most importantly for standardization of the XML metadata, this will be done.

The efficiencies of doing this are financial as well. For Genesys to be the focal point of the W3C standard reduces the industries costs of membership to the W3C. As the soon to be released monthly budget and wish list note, the $6,500 cost of basic membership is realized by each of the producers.

Both Java and Genesys are open private standards that are modeled on the Java programming languages environment. Encouragement of the ecosystem, embracing and extending public standards is the Genesys business model being used here. I will ensure that any user of this system can innovate on the engineering and earth sciences, as a business oriented system that is our key competitive strategy.

Having an open and public standard does not eliminate our competition, based on other organizational structures, from interacting in these data items. In fact it would actively encourage the different competitive offerings to interact on the data producers data elements. It also doesn't in any way permit an encumbrance against the copyright that I have earned.

Some of the other highlights and take-aways of the presentation that should be noted are as follows.

Exploring Soft (private) Standards:

• A "soft" standard is a specification that is completely compatible with current public standards but offers enhanced functionality and performance. What is stated here is workable and functional and largely irrelevant regarding ownership of the standard as far as a producer is concerned.
  
• It offers customers the security of knowing that they have avoided being "locked in" and an upgrade path to the public standard exists. Achieving the similar objectives from the producers point of view, without the need for me to "give up" anything.
  
• Making available the functionality and performance of a more finely "tuned" technology. Someone, Genesys in this instance, will have the power and authority to act in the best interests of the industries metadata needs.
  
• It may permit significant premium pricing and the generation of customer loyalty :-).
  

Summary

• The move from "product" to "system" competitions raises both strategic and organizational issues. Addressed in the proposed solution of the Joint Operating Committee.
  
• And increases the force behind the push for open standards.
  
• Not all markets tip: but as network effects (connectivity, complementary services, tools, product) become more important, more and more will.
  
• Fortunately there are ways to make money in an open world - either through "complementary assets" or through "soft" standards.
• Everyone wins.
  

Continental energy policies...

I have been meaning to write about the changes in the global energy marketplace for some time, President Bush's state of the union address makes this a priority.

I am frequently reminded by various events in the world that the American oil and gas service industry and producers are being pushed out of the regions where generally they are not welcome. The Chinese come into the areas where the Americans are not welcome and are able to pay the same for the leases and most importantly do not expect that the African, Middle Eastern or other countries adopt the moral and ethical standards of the U.S.

This has repatriated most of the global Houston based service industry to focus on North America. Is it any surprise that the Americans have also just recently noted the value of Alberta's tar sands.

President Bush's state of the union objective of reducing dependency on foreign oil is possibly not an internally generated expectation as it is a global reality. The Chinese and Indian demands for energy can be met within their own continents by the middle east, Russia and from the continent of Africa, what do they need the Americans for.

Traditionally the Americans technology has been superior to the rest of the world. This may be the case still, however, at what point does the rest of the world grow away from the U.S. technology and cultural expectations. The realization that now is as good as anytime is the current thinking throughout the world.

Now that the focus on oil can be given specific goals and objectives to meet the presidents demands, the gas industry needs to be given similar objectives. Watch for the arctic to become progressively more important in the next 2 years.

The point of this entry is the overall realization that meeting the energy demands of the U.S., China and India are difficult enough, the realization that it needs to be done on the basis what can be done on the North American continent only makes it more difficult. If Bush really expects that alternative energy sources will provide a buffer, then we really have a challenge in front of us.

It's about the "individual"...

This summarizes what many of the public and private thought leaders around the world are thinking.

Business is in for some big surprises. The world has changed, and the organizations haven't. It is simply a matter of "Change or Die". Most organizations are gladly lining up for the later point. Dying is not an honorable choice, it is just the best choice for the individuals that make up that organization. Many are frightened by the prospect of the future, others are not so concerned. Either of these two groups sees their long term sustainability in their salary and benefits, and have chosen to ride these changes from a "safe" vantage point.

The source of innovation is individuals. As I noted in a prior entry everyone and anyone who is motivated to build better oil and gas ERP style systems, based on the organizational structure known as the joint operating committee, are more then welcome to participate here. They not only are welcome, they are desperately needed. A role for everyone exists during and after all of these changes.

These evolving and changing corporate organizations provide those that may be concerned about their future with a familiarity to this new world order. An opportunity to make a valuable contribution. It will be all of the individual contributions conducted during their "safe harbor" within the dying organizations, that will show them how they can and will participate in the future. They only need to see where they'll fit into this world.

Today I am noticing a trend that seems counter to logic. The majority of these changes are being orchestrated, motivated and driven by government policies and leaders. Not involved in a life and death struggle that the corporate institutions are involved in. They can see clearly the need for change. What they also see is the bureaucracy of the corporate organization is redundant and resisting the necessary changes to make their economies innovative and prosperous.

Here is the newly elected leader of Germany speaking at the World Economic Forum.

• "What kind of order do we need so that all can benefit from the fruits of the economy? The Creative Imperative is the answer. Politicians must shape the conditions in which people can have the freedom to develop the best ideas which release the creative imperative. There is a need for a new social market economy. The most dignified market and social economy needs to believe in the mature citizen that can exercise responsible freedom to translate innovative ideas into action... Our target is to make Europe the most dynamic continent. But to turn the creative imperative into real innovation, that is something that we must not give up on as our future prosperity depends on it..."
• Angela Merkel, German Chancellor
  

Cuts through a lot of bureaucracy and vested groups. The writing is on the wall for corporate leaders. Resistance is futile ;-) the corporate hierarchy is finished. I understand that president George Bush will be discussing this point in his state of the union address on Tuesday. This hopefully will be one of his stronger speeches, there is nothing like the American economy when there are looming economic, competitive threats.

Something serious to think about...

The article discusses a frustration on the over reliance on the use of the graphical user interface device, the KVM. (Keyboard, video, mouse).

I think that the Genesys systems that are we talking about building here, could be so much more interesting on the basis of "what" and "how" the interfaces could be developed for the users. Think about it.