McKinsey Mobilizing Minds

During the writing of the Research & Capabilities and Knowledge & Learning modules I have stumbled across a McKinsey document that I should have reviewed back in 2006. Clearly this document has had significant influence over my thinking during the time I set out to define the draft specifications. The article is titled "The 21st Century Organization" and they have recently expanded the article into an excellent book called "Mobilizing Minds: Creating Wealth from Talent in the 21st Century". The information that I am looking at in this post is from Chapter 1 of the book. I have also reviewed the document in the Research & Capabilities and Knowledge & Learning module specifications.

One of the reasons that I am so confident in this project is, first of all, the need as reflected by the oil and gas prices. Secondly the effect that Information Technology is having on releasing the constraints within companies and industries. We are in a period of time where anything can be accomplished, and if done properly, with the People leading the way, we can solve these problems.

It was Professor Ludwig von Mises who noted that the industrial revolution was the solution to the problems of the day. I believe the Information Technology revolution is the solution to the problems of today. This book, which originated from the McKinsey article, speaks clearly to the time and place we find ourselves in.

Ask any mid-level professional or manager at almost any large company - even a successful one - and he or she will tell you that the growing complexity of work is becoming a greater and greater problem.

Starting off with a clear statement of how congested and constrained our traditional organizations have become.

One survey by the research firm Net Future Institute (NFI) showed that nearly 75 percent of senior managers consider the workload of people in their department to be too heavy. Another survey by the same firm found that most people do their best business thinking not while at work but while commuting to work or in their home. Why? Because that's when they finally get some time to think.

The problem in oil and gas is that the organization that brought us to this point in time can not deal with the complexity of the current business. The best term I have heard is that the easy or cheap energy era has ended. The firms as they stand have provided commercial volumes of energy to the markets for many years. When oil was valued at $9.00 to $22.00 a generations worth of time had past. The constraints of change and the complexity of the business are catching up to a generation of neglect in building the business. What brought us to this point is inadequate for our needs. The traditional Schumpeterian creative destruction has been delayed in this industry because of the current earnings of the producers. But if you listen closely, they are claiming their costs are inching towards the point where the bureaucracy will not be able to earn anything from their production.

The People who have worked in this industry are the ones that need to lead the changes in these organizations. These companies will never exercise the level of change that is necessary to bridge this new energy era. Are we to wait for this industry to turn to ashes before we are motivated to make the necessary changes?

The increasing frustration of the workforce is symptomatic of an even more fundamental issue: the organization of most companies today - and how it limits the ability of talented people to perform and take full advantage of the opportunities of the 21st century. The modern, "thinking" company should be a fluid and fast moving creature, in which its workers discover knowledge and exchange it with their peers collaborating with others to create value.

In many ways the industry is not just dealing with the difficulties of the business they are in, they also are faced with a "better way" to do their work as offered by IT.

The problem, however, is that most of today's large companies fall well short of creating conditions that maximize the productivity of their thinking, problem-solving, self-directed people. Too bad this thinking machine isn't working nearly as well as it should be.

And here is the paradox that most people face. The technology provides the opportunity to move to a "thinking, problem-solving, self-directed people" but also locks them into the traditional ways of the organization. As I have mentioned many times before "SAP is the bureaucracy".

Much of the communication is worthless noise: In a 2005 survey conducted by the McKinsey Quarterly, of senior and top executives, 60 percent said their company's size and complexity have made it somewhat difficult, or much more difficult, to capture opportunities than it was just five years ago. Little wonder, then, that ineffective bureaucracies develop within large companies, that the head office seems remote from the field, and that the "left hand doesn't know what the right hand is doing."

As Nobel laureate Herbert Simon stated. "What information consumes is rather obvious. It consumes the attention of its recipients. Hence a wealth of information creates a poverty of attention."

A symptom of the problem companies face today is simply the amount of energy they waste. In the cities the problem is congestion. In companies, the problem is unproductive complexity.

It is opportune at this time to ask what happens next. In oil and gas we see the past leadership holding to the notion that they do not understand why the prices are so high. The fact is the market is allocating the financial resources to these firms to deal with the increased complexity involving the earth science and engineering disciplines. Information Technologies are enabling people within these organizations to do so much more, however, they have no authority to exercise any change. Is this situation to remain in the oil and gas industry for another five years? Or is there an alternative, such as this software development project?

The organization of most companies today bears limited resemblance to the original intended design. While there are plenty of well managed companies that are exceptions, most are struggling: Their hierarchical relationships have become so confused that the power of hierarchy to drive performance is compromised. This dysfunction is usually felt most severely at the front line, where the brainpower and the energy of front-line workers are significantly consumed in the struggle against the internal complexity of their organizations.

This is a software development project that has researched the problems in oil and gas and arrived at a solution to these problems. The five years that I have spent on this research is time that would have needed to be expended, and therefore, I am able to offer the industry the ability to turn back the clock on the past five years and establish this development as a priority.

The fact is that even the most self-directed, brilliant people can't create wealth by working alone. They need help mobilizing the talents of other thinking intensive people and securing crucial capital and labor. They need to be able to convert their thinking into moneymaking activities.

In order to proceed from here requires the People who are doing the work in these organizations to put their heads together and make this application capable of doing their jobs. This mass collaboration could start at anytime and the longer we wait, the longer the problems will fester. The involvement of the People is not something that can be replicated in any other manner. The industry needs to fund these developments and I can not do the work of thousands so time is now being lost.

A new problem

In this book McKinsey articulate further problems that are inherent in the bureaucracy. One that reflects that the lack of motivation to resolve these issues is rewarded by the price driven increases in profits of the producers.

Much of the underlying problem is the use of internal financial reports that do not reflect the underlying economic relationship of intangibles to profit making. Managers can look good on reported results, even as they take actions that hurt the enterprise. These issues are compounded by performance measurement approaches that reward selfish, divisive behavior at the expense of collaborative behaviors for the common good.

Mobilizing Mind Power

What would be the effect of having this software operational in an oil and gas concern? Would using the JOC revolutionize the performance of the science based oil and gas producer?

If your organization can harness this mind power -- if you can boost the profits from each thinking employee -- then your organization will be on the path to great success and competitive advantage in the 21st century world.

and

Most companies are tapping into only a small fraction of the potential to create wealth from the mind power of all the managers and professionals they employ. During the 20th century, the costs of coordinating work across large companies were so large that mind power was trapped in small pockets of people scattered throughout each company. But nowadays this is no longer true. As a result, today there is an opportunity to earn large "rents" (that is, profits disproportionate to the amount of labor and / or capital that are invested.)

Where the Money is

Obviously it is my belief that the changes in organizing the oil and gas industry will provide value to producers, individuals, and society. Alternatively we face a future led by the bureaucracy and its continued failure. Does anyone see how these organizations will survive until 2020?

It would be reason enough to develop better organizing approaches if all that was accomplished was to make the jobs of talented employees more rewarding. All business leaders know how important talent is to their current success. Furthermore, it could be argued, actions taken that will enable companies to attract, develop, and reward talent bring their own reward. Still, we believe developing a better organizing model is more that that. In the 21st century, its where the money is.

What I think is a critical component of this development is a refocus on the competitive advantages of the oil and gas producer. The land base and physical assets are the producers' competitive advantages. As I indicated in the Research & Capability module the intellectual property of how things get done is transferred away from the producers to the vendors, suppliers and People working within the industry. That is their competitive advantage and hence their motivation to develop the most advanced drill bits, rigs, etc. The producer does not have the scale and scope necessary to fully develop the idea, or the application to make the idea commercial. So lets stop playing the game of no one earns any intellectual property because the industry holds all the money. The producers have to actively spend the resources necessary to fully develop the support industries that will make the energy producer the most innovative and profitable. We won't get there if the intellectual property is passed around to the vendors competition by the producer firm. And that also applies to this software development project.

Because of the development of globalization and advances in technology, scale and scope effects have increased across the board -- particularly in those effects related to intangibles. By "intangibles" we mean such assets as the brands, intellectual property, and proprietary networks that are unique to individual firms.

If we don't allow the ideas that are a critical part of an innovative science based industry to be developed where and when they are needed, we will be stuck with the problems of the 20th century. The clock is now ticking.

The opportunity is to bring the entire firms [industries] mind power and the related intangibles to every job, to increase the value of every person's work, every day.

and

We are arguing that companies need to view investing in designing and building strategic organizational capabilities as means to capturing rents from everything they do. Companies are being constrained, unnecessarily, by the unproductive complexity of working in their organizations. We believe that investing in capabilities to relax these constraints, thus enabling a company to mobilize not just labor and capital but also the company's unique mind power, is the key to creating wealth in the 21st century.

and

Furthermore, we truly believe that companies have only begun to tap the opportunities to create wealth in the 21st century. Why? Because they are still using an organizing model designed for the industrial age rather than for the digital age. to create greater wealth in the future, we believe that all companies should make organizational design the centerpiece of their corporate strategies.

Please, join me here.

Technorati Tags: People's, McKinsey, Energy, IP, Organization, User,

Two More Draft Specifications

I am pleased to submit to the community the Knowledge & Learning and, Research & Capability Draft Specifications. (Please note these modules are very similar and therefore each file contains both specifications). These are the eighth and ninth Draft - Specifications and I will complete the last two Performance Evaluation and Analytics & Statistics Modules before the end of July 2008.

• Security & Access Control
• Petroleum Lease Marketplace
• Partnership Accounting
• Accounting Voucher
• Resource Marketplace
• Financial Marketplace
• Compliance & Governance
• Research & Capabilities
• Knowledge & Learning

Technorati Tags: People's, Specification, Research, Knowledge, Learning, Capabilities,

Why the companies.

In my last post I pointed the accusatory finger for this energy problem, at the oil and gas companies, particularly the majors. The first aspect of the accusation is that they knew, as I had pointed out, that their organizational constraints would limit their level of activity far below the market demands. This may seem a rather harsh point of view, which they should be given the benefit of the doubt about their knowing or not knowing. It was clear to many that this situation was inevitable, I was providing a solution, not identifying the problem.

The management of the companies knowing the situation would become as difficult as it is, undertook to do nothing. They were making money and would continue to do so when the prices went up. This lack of motivation to do anything was the choice of these managers. Show me a major producer that has earned any increase in their profits other then from higher prices.

Educating the public. Even today companies and their industry representatives claim to have no idea why prices are so high. What business are they in, do they mis-understand their markets so fundamentally? What could have been done in the past five years to mitigate the problems we face today? If consumers were given the real facts, would they have gone out to purchase the SUV they feel they are now stuck with? The duck and run from the truth policies of these organizations have allowed John Q. Public to walk blindly into the biggest issue ever facing mankind. The motivation to dip into the trough is strong with these managers.

In September 2003 I published a proposal to the industry to conduct the research of determining if the JOC was the key organizational construct. Given the opportunity to deal with this constructively, the industry represented by Petro-Canada, Encana, CNRL, Talisman and many others, chose to hire Cambridge Energy Research Associates (CERA) to research the idea that I proposed! Shows you the scope of what these people are capable of. And I was not dealing with some low level manager; I was speaking with CEO's of these firms. Luckily for me I was able to complete the research ahead of CERA. In publishing the May 2004 report the only question that was asked was who paid for the research? Well I did, and now I own it lock, stock and barrel.

It's been this last point that really bothers the companies. They have no desire to ever let anyone derive any value from Intellectual Property. It is since this time I have been forced to find employment in other industries. So here the industry was presented with a workable idea that made more sense then anything they had read before. (My words). And they hush it up and try to kill it. Each of these companies struggles with the inability of SAP to do any after sales service, why would they refuse any new idea? And that is the last point that these organizations are culpable for, their efforts to kill this opportunity to solve this problem before it affected the consumers.

These companies are more or less suffering from a grid-lock organization that long ago failed. Recall in 2007 even Exxon lost 10% of their production base after spending an additional $25 + billion in capital. These dinosaurs will never be able to keep up with the decline in their production base and are therefore slowly rapidly dying. So who else, other then the consumers are suffering as a result of the manager’s lack of accountability and motivation? Clearly the shareholders are at a sizable risk as they watch the managers slowly run the company into the ground.

I am calling on those investors to fund the developments of this software development project. A means for which the shareholders could be provided with the alternate organizational systems enabling them to manage their assets. The current oil company managers know that in today's business environment you must have the electronic systems in place first, or you will be relegated to manual systems to run your operation. The managers have their investors over a barrel.

How much longer will these managers be left in control will be determined by the investor class. An investor class that happens to be comprised mostly of John and Jane Q. Public, the people that are now facing the energy problem. What is needed is for them to act as I see no other alternative.

Technorati Tags: People's, Call-to-action, Organization, Research, Failure,

Very bad news.

I believe that the solution to the current energy difficulties is to eliminate the bureaucracy and replace it through the more natural form of organization, the Joint Operating Committee. Supporting that organization with these future software developments, will enable the markets to form and begin the process of eliminating the detrimental effects these bureaucracies have brought to our door.

I have fought with everything I have to make this situation as painless as possible. With $135.00 oil being a reflection of how I have failed to convince these bureaucracies to move to this alternative vision. Let me make it absolutely clear, these bureaucracies fully understood and agreed to the underlying hypothesis in my thesis. I originally floated this idea in September 2003 and published the full report in May 2004. What they have done since that point in time proves that they are incapable of acting in a responsible manner towards the energy demands of consumers.

The bad news that I feel is that the time has come where the real pain will soon begin. If the Saudi people have, as they announced this weekend, increased their production by a half million barrels, they have proven to me that they have done everything that they could or can. When the accusatory finger is pointed as to who's fault this is, I can assure everyone no one in the Middle East is to blame, the companies are.

The Saudi increase only shows their concern for the market. And I would have to state their concern is as genuine as mine. The system of how energy delivery in what we call the western world has reached a critical point where there is nothing left to give. A slight panic by drivers in North America will probably lead to excessive demand of the system that can not be addressed by the refiners, their inventories or the level of world oil production. This is a critical breaking point where the fallout will be permanent, and all the kings horses, and all the kings men, will never be able to put it back together again.

There is some difficulty ahead. If we are smart we would implement a consumer oriented rationing of gasoline. The primary priority should be to keep the transportation system operational at full capacity. I think a rationing is more then possible and will mitigate the disaster this may well become. The other task is the need for this software development, and the People who work in oil and gas today, get behind the re-organization of the energy industry to enable the production volumes that these economies need to function.

I believe that given the situation we have today, the resolve of the People in the next 5 - 10 years can restore the energy production our economies need and we can look back at this failure of the bureaucracies as one of the darkest periods of our civilization.

Today's problems will not be solved by today's thinking. Please, join me here, and pray for peace.

Technorati Tags: People's, Call-to-action, Change, Peak-Oil, Failure,

Management of IP (Intellectual Property) in oil and gas

I have a few thoughts on how IP is developed and used in oil and gas and why it needs to change, quickly. First, as I have documented in the Resource Marketplace™ Module. The competitive advantage that a producer has is contained within their land and production base. The application of the earth sciences and engineering knowledge, understanding, and capability to their land and production base are the means in which to build value. The IP (intellectual property) is how the market provides the commercial means of building the producers value.

And IP is the markets way of building value and key competitive advantages. The holding of IP within a producer company is redundant, of no value and an impediment to innovation. The market uses the tools of IP to prepare the state of art research and knowledge for its own monetary gain and competitive offerings. In the hands of a producer IP is useless.

What would holding a number of patents on drill bits provide a producer such as Exxon Mobil? Or in this case, the IP of using the JOC as the key organizational construct? Again in the hands of a single producer it makes the ideas unavailable and unusable. In the hands of an entrepreneur it can build value for the entire industry. Neither of these two examples provide the producer with any strategic competitive advantage. Nor does the producer have the economics of scale to make the innovation or research worthwhile. They are not in the drill bit or software businesses.

Until the producers realize the IP is not their competitive advantage, and accept the markets holding of these ideas, the market will not respond to the needs of the producers. If the markets efforts are in vein and the producer just hands over one vendors IP to the next, nothing will develop that is different from today's $138 / bbl marketplace.

Not recognizing the IP of others as a practice will need to change before the producers can begin to approach the market demand for energy. For the past number of years the management of IP by the industry has been catastrophic. Other then the large suppliers such as Schlumberger, BJ and Halliburton's ability to file for patents. Most of the IP has been ignored by the producers so that they do not have to grant the monopoly rights to the technology developer. Since the energy industry is a primary business and 100% of the resource value is received by them, does not mean they can strip, cherry pick, abuse or otherwise attempt to steal the IP of the market.

Over the past 5 years my personal experience in this area has given me first hand knowledge of the depths of stupidity the companies taken the concept of IP ownership. This must stop for the betterment of society. If we continue in the fashion that we have, we will never be able to meet the markets demand for energy.

Central planning is dead, long live the market.

Technorati Tags: People's, IP, Market, Research,

Draft Specification - Compliance & Governance™ Module

Compliance & Governance™ provides the methods that the firm deals with the investment community and its associated regulators. (SEC, Tax and Royalty). The unique attribute of how the People, Ideas & Objects™ application provides the compliance, is by using the advanced technologies available to automate as much of the processes as possible. Technologies that the industry inherits in this software development capability and the regulators embrace of technology through their published API's (Application Programming Interface) and Frameworks. The best example of which is the SEC's XBRL initiative.

In this module we are ensuring that the policies and procedures of the People, Ideas & Objects™ application and its users are in compliance with the various regulations and requirements of an organization. In essence, through building this application we are moving the compliance and governance framework of the firm to be in alignment with the four other frameworks of the Joint Operating Committee. Maintenance of the producer in compliance to the frameworks of the SEC, tax and royalty regimes is this applications compliance goals. The governance aspect of the application assigns the role and responsibilities of the People to their tasks based on the Military Command & Control Metaphor.

A key to the resolution of the industries ability to find and produce the energy the market demands is through the efficient application of capital. This point has been dealt with in the Financial Marketplace™ module and other modules in this specification. Raising money requires access to public funds. The size of the innovative oil and gas producer should not be an impediment or constraint of access to the markets of oil and gas activity, and, capital access. If a firm is a small partner in a few projects, their ability to raise capital will be dependent upon their level of compliance capability.

Copies of the specification with the other six module drafts can be downloaded from the old wiki .

• Compliance & Governance™
• Security & Access Control™
• Petroleum Lease Marketplace™
• Partnership Accounting™
• Accounting Voucher™
• Resource Marketplace™
• Financial Marketplace™

Technorati Tags: People's, Specification, User, Development,

Robert Metcalfe on MIT Video

As I've mentioned in this blog before, Robert Metcalfe is someone that I find to be great interest to this energy problem. The introduction of Metcalfe in the Video provides a good summary of his background, and I would note that even despite his accomplishments his attitude remains fresh, and challenging to the status quo. The energy industry needs to be shaken and Metcalfe does a bit of shaking in this video.

Another aspect that Metcalfe was involved in was in participating in the MIT's founding of the Massachusetts Enertech Cluster. I held out high hopes that this was the necessary direction of the academic community, only to find soon after its forming it was hi-jacked by the climate and alternative fuels red herrings. I expressed my disappointment of this in this blog post here. Metcalfe is single handedly criticizing the Massachusetts Enertech Cluster in this one hour talk and returning the hope that I expressed of the MEC. Early on in the presentation @ approximately 9 minutes he states a few interesting points:

"Here are these trillion dollar markets (energy) that are poorly served."
"The people who have been doing energy investing for 50 years are annoyed with people like me, Internet people, invading the energy space." Stating, "look you guys have had your chance, and haven't solved it, move aside, here come the Internet people." (Here, here)

"In energy there are some particularly nasty people out there that are not going to welcome your technological developments."

Stating the goal should be that we pursue "clean" and "cheap" energy, Metcalfe summarily attacks the founding premises and objectives of the Massachusetts Enertech Cluster (MEC). Stating that;

• Climate change is a "motivational bubble" that may be solved quickly.
• Conservation should not be an objective of this project (MEC), we need abundant energy not conservation. Our economies need to grow, not be stifled by energy conservation.
• No Nukes (MEC), which meets the clean and cheap energy objective. Technology can and will mitigate the effects of nuclear energy production.
• Corn ethanol is a fraud.
• The government needs to adopt a Manhattan styled project for energy. The government will have no solutions outside of taxes.
• Only scale projects are needed, which of course is very foolhardy. Innovation will come from everywhere.
• And lastly there are no silver bullets. Metcalfe suggests we spend more time finding the silver bullets instead of opposing their development.

Which leads me to this project. How is it that the energy industry can ignore the People, Ideas & Objects application as a solution?

Technorati Tags: People's, Massachusetts-Enertech-Cluster, Energy, Metcalfe, Science,

Constrained Organizations

In a follow up post to the "Unconstrained Prices", I thought it might be a good time to reiterate the reasons that I see for the ever escalating oil and gas prices. Energy production is driven by the earth science and engineering disciplines. As one would expect, over a given period of time the science and engineering will be subject to new discoveries and findings, leading to further enhancements of the underlying sciences. Innovation plays a key role here in that the new sciences bring about new innovative uses, and in turn, lead to new science. This is the key area of long term value add in the oil and gas industry. A producer that is able to apply the science and ideas to the problem at hand will, over time, increase their production and reserves. I'd like to call this the "Capabilities Approach" to the oil and gas industry.

If we reduce the competitive nature of the industry down to this Capabilities Approach. We see the interactions and understanding of the industry as it developed over the past 100 years. Someone figures out how to drill deeper, then the subsequent wells expose more oil bearing formations and hence more opportunities for increased oil or gas production. As time has passed the more lucrative and "big" ideas have been applied in broader areas, and for longer periods of time.

As we have learned from Stanford Professor Paul Romer's new growth theory, "more" ideas are needed to progress forward from the current base of understanding. The supply / demand for these ideas is not linear, but logarithmic, and occur at a much faster pace through their life cycle. Enter the classic bureaucracy and realize its efficiencies are based on expansion of the underlying activity (growth) and continuous process improvement. Change, and particularly scientific and engineering change, are the hierarchy's deficiency. What we need is a new form of organizational structure that will support and enable the industry to compete in this dynamically changing and high demand marketplace. Until such time as we can change the performance dynamics of the organizational form for the oil and gas industry, prices of commodities will continue to rise.

It is these comments and ideas that I have asserted in this blog for the past few years. They are a direct result of my thesis that provides evidence that the Joint Operating Committee is the method of organization of the innovative energy producer. We need to start building the software that I have specified in the 11 module People, Ideas & Objects application and unleash the potential of the sciences for the betterment of society. I find these ideas are consistent with many of the industries leadership. The International Energy Agency recently made some comments that reflect these concerns.

The IEA states that by 2015 there will be a shortfall of 12.5 million boe / day.

"Future crude supplies could be far tighter than previously thought."

"Reflects an increasing fear within the IEA and elsewhere that oil producing regions aren't on track to meet future needs."

"The oil investments required may be much much higher than what people assume."

My personal favorite;

"This is a dangerous situation."

"We are optimistic in terms of resource availability, but wary about whether the investments get made in the right places and at a pace that will bring on supply to meet demand."

Yet nothing is done by these bureaucracies. They know what the problem is, there is just no motivation for them to make the necessary changes. Record profits at Exxon Mobil mask the 10% production declines. We need to consider who's responsibility this problem is, as the companies are unwilling to do so. After all it is not they who will be suffering with energy shortages but society in general.

On the other hand, and what I truly do not understand is that the $135 prices are rewarding those that find and produce the energy. This is an entirely new dynamic for the industry, when will we see the companies that are able to outperform the current crop of producers? The answer to that question unfortunately is not soon. Until this software is built to organize the efforts of the industry, our choices are limited to the status quo or manual systems. Join me here.

Technorati Tags: People's, Call-to-Action, Energy, Engineering, Science,

Draft Specification - Financial Marketplace Module

I am pleased to submit to the community the draft specification of the Financial Marketplace Module. This is the sixth of eleven modules, and last of the three marketplace modules in the specification.

What may not be obvious at first glance of this specification is the Marketplace makeup of the module. Financial resources are critical to the energy industry because of the intense capital nature of the business. This marketplace therefore provides a number of means for the innovative producer to manage the cash resources of the firm and apply the budget discipline at a finer level of focus, the Joint Operating Committee.

One thing that is very obvious about this module is the radical nature of how the nuance of committing capital amoungst the partnership is handled. Offering a multitude of options for the innovative oil and gas producer and eliminating many of the issues associated with raising money.

I have purposely provided a very light sketch of the Financial Marketplace Module. This is not my area of expertise, and many of the users in this community will better understand the open opportunity the module provides. I think the seventh module to be published will be the Compliance & Governance Module.

• Security & Access Control Module
• Petroleum Lease Marketplace Module
• Partnership Accounting Module
• Accounting Voucher Module
• Resource Marketplace Module
• Financial Marketplace Module

Technorati Tags: People's, Specification, Market, Change,

Unconstrained prices.

We have seen the price of energy increase by rather large amounts over the past 6 years. One would have to think that the upper limit of what is reasonable has to be near.

Oil and gas is unique in that it is the only resource that has a finite value. There are only so many volumes of oil and gas that ever existed. Like wood, wheat or rice it is not renewable, and like gold, silver and platinum not reusable. Once oil and gas is used its irretrievably lost. These attributes are what make them unique to other commodities.

The other aspect is that they are expensive, but more importantly difficult to find and develop. Conceptually the energy industry is the most difficult from a science and engineering point of view. As we have progressed through the cheap energy era, we now find ourselves in the era of difficult energy.

The pace at which the consuming public has learned the dynamics involved in the industry and its pricing has increased. The point that I want to make in this entry is that oil and gas prices are no longer constrained by the idea that there are easier to produce alternatives. The market has always generally believed that corn, wind and solar would replace the "dirty" oil used to power the SUV. That the future of the world's energy sources would now suddenly be clean, cheap and environmentally friendly.

The lesson that has been difficult to learn is that we can't use our food for fuel. Rice, wheat and corn are being disrupted and it is the food supplies of developing nations that suffer. Secondly the volumes of energy consumed in the alternative energy manufacturing process are higher then what is produced. And finally solar and wind, as they stand today, are prepared to take on less then 1% of the total supply of energy

So where may we see the price of energy go? If my suspicions are correct, we may ultimately see the price of oil reach $650.00. Within the next three months we may see $175.00 / bbl and we should consider that cheap. Cheap because it will only lead to temporary shortages.

Technorati Tags: People's, Peak-Oil, Energy, Market,

Draft Specification - Resource Marketplace Module

“For every serious challenge facing the world. There is someone with a big idea. That big idea needs to be nurtured. It needs to be explored and analyzed in order to bring it to life.

And design is at the core of that innovation. There isn’t a problem in the world that a great designer can’t solve.” Quotation from an Autodesk commercial.

The Resource Marketplace module is the second of three marketplace modules in the People, Ideas & Objects specification and the fifth of eleven. The key focus of this module is on providing a forum for electronic commerce. The Resource Marketplace works with the Accounting Voucher Module to optimize the contract, division of labor and mitigation of transaction costs.

A summary list of the published modules.

Draft Specification - Security & Access Control Module

Draft Specification - Petroleum Lease Marketplace Module

Draft Specification - Partnership Accounting Module

Draft Specification - Accounting Voucher Module

Draft Specification - Resource Marketplace Module.

Possibly the largest impact of this module is the management, with the Research & Capabilities Module, of People's Intellectual Property (IP). If we are to succeed in finding larger volumes of energy to meet the worlds demands we are going to need to solve a variety of difficult problems. Whether those problems are in engineering, science or business the individuals that will ultimately prevail need to be motivated to do this difficult work. The motivation is the ability to earn the rights to the expression of the idea, the patent or trademark.

For more then 25 years the oil and gas industry has ceased to conduct any research. Making today's environment ripe for research and development opportunities and making it a use it or loose it proposition. Since they chose to do nothing they won't miss out on any opportunities. In this module specification I also suggest that companies have become too comfortable with using People's IP as if it was free like the oxygen that we breathe. The "Ideas" in People, Ideas & Objects is explained in fair detail in the specification. It is necessary to build a system where people can develop, secure, license, contract and manage their intellectual property. This application is the place where that will happen, have a look.

The next Module to be published will be the Financial Resource Marketplace.

Technorati Tags: People's, Specification, Development, IP, Modularity,

Google announces App Engine

We moved one step closer to the People, Ideas & Objects applications capabilities with the announcement of Google App Engine from Google. Information regarding what the App Engine is, is available here, here and here.

What this provides People, Ideas & Objects users is the ability to host applications on Google Application Hosting. As one can imagine, Google has a lot of hardware available that at times may be surplus to their needs. This service is being offered as part of the Google Apps for http://www.people-ideas-objects.com/ product. And therefore free to all the users and developers of the community.

Now they mention that the service will allow only the Python programming environment, but more will be added in the future. I have always considered using Sun Microsystems to run our main app, and that hasn't necessarily changed, but Google Apps Engine provides the users and others to build some of the applications that may be used by a user to provide a greater level of service to their oil and gas clients.

Technorati Tags: People's, Google, Capabilities, User,

Draft Specification - Accounting Voucher Module

I am pleased to present the fourth module of the People, Ideas & Objects module to the community. The Draft Accounting Voucher module specification is different then most other modules and applications. It brings an area of strong academic science that until now has been poorly published in other ERP applications. Have a look.

• Security & Access Control Module


• Petroleum Lease Marketplace Module


• Partnership Accounting Module


• Accounting Voucher Module.

The next two modules will be;

• The Resource Marketplace Module


• The Financial Marketplace Module
  

Technorati Tags: People's, Modularity, Specification, Organization,

Topics of discussion.

One point that most users will be able to identify with is the recent focus of the industry. For the past year the focus has been on reserves, its land base, its production forecast, how difficult and expensive it is to produce oil and gas, and occasionally the retirement of the brain trust in the next 5 - 10 years. Any topics outside of the realm of these points of discussion is never raised. What about the systems, administration and management of the industry? Are these disciplines no longer considered a part of oil and gas? Is it through the neglect of these areas that is the motivating factor of the need for the People, Ideas & Objects application? Or is this just the natural evolution of the industry to focus on its key value added areas?

When you think about it, the topics of discussion of the industry are the most serious that they've faced. And the most demanding in their 140 year history. The magnitude of the problems and the seriousness of the issues requires 100% of their focus. Is it any wonder that many areas of traditional concern are falling off the table? I don't think so, and I would suggest the responsibility for action will fall on a different group to provide the systems, management and administration. And as we move forward the Users will become the leaders of this new service industry.

It is clear to me that the Users must be the lead in the development of this application. They're the only ones that collectively know how the industry operates. To preclude them from development would render this software quality down to that of SAP's and Oracle's. But there's more then just that. In the future what will the role of these users be in the oil and gas? What I'm getting at here is that People, Ideas & Objects application is the beginnings of a new User-driven technical support industry. Where the Users build their own software, manage and administer the day to day in oil and gas, and provide these critical resources as part of their service offering.

The current focus is not likely to change, and the earth scientists and engineers are off busy with their reserves, land, and production problems. They will need this new service industry to rely on, and will willingly pay for it. The number of people employed is very small for an industry that is in the ballpark of $4.5 trillion in revenue. Over the lifetime of the oil and gas business, the General & Administrative costs have been around 5% of the total. Is it reasonable to assume that this new industry we are talking about is a $225 billion in revenue? I think so, join me here.

Technorati Tags: People's, User, Vision, Productivity,

Thomas Davenport declares a revolution.

Documenting the differences between the old "Knowledge Management" and the current Enterprise 2.0 (E2.0) type of applications. (Which of course People, Ideas & Objects would be considered E2.0) You can access the article from here.

Hard to imagine that Thomas Davenport would say such things, but this is a must read article. His most important point is the reaction that is reflected in this quotation.

Certainly any form of “2.0” movement would require a distribution of power. I have no objections to other groups coming into power, but if I held any power I would not be ready to hand it over because of some new software becoming available. I suspect many senior executives will feel the same way. Most would probably like to get the best ideas of their employees, but they like their own ideas even better.

The powers that be in oil and gas, I can assure you, are reading from this script.

Technorati Tags: People's, Harvard, Call-to-Action, Software,

Draft - Partnership Accounting Module Specification

I am pleased to present the Draft – Partnership Accounting Module specification to the community. This is the third of eleven modules that will be published over the next few months. They can be downloaded from here.

• Draft Security & Access Control Module Specification
• Draft Petroleum Lease Marketplace Module Specification
• Draft Partnership Accounting Module Specification.

The next module to be published will be the Accounting Voucher.

Partnership Accounting brings together many of the issues that will be faced by using the Joint Operating Committee (JOC) as the key organizational construct. The module’s key assumption is that producer’s will contribute disproportionately to what their commitment requires. Whether the contribution is in capital, land, intellectual property or technical assets, these contributions need to be valued for the purposes of determining the equalized contribution of each producer.

We need to do this in order to eliminate the wasteful and redundant technical and management capabilities being built into each and every silo’d company. The oil and gas industry is based on partnerships, represented by the Joint Operating Committee. It is therefore necessary to recognize the shortfall in human resources due to the dual issues of:

• The planned retirements of the brain trust in the next 5 – 10 years.
• The ever-increasing demands of earth science and engineering for each barrel of oil.

This module pools the resources of the producers represented in the JOC. This is to ensure that the required capabilities are sourced from the appropriate resource.

There is a large amount of this module that consists of extensive algorithms that will make this application difficult to get right. However, I think this module is also an area where the greatest creativity and innovation in how these requirements are implemented. This module is also where the largest numbers of users will have their influence. And will also be one of the major modules that provide the users with the ability to develop their commercial virtual worlds in which they will work from in the decades to come.

Technorati Tags: People's, Modularity, Specification, Organization,

Tanks half full.

I have written about Matthew Simmons before. He is the most vocal of all the peak oil theorists and the one that makes the most sense. He recently made a presentation talking about the future of the industry, and like me he sees a very rosy picture for those that work in the industry. (Rosy = lots of work to do.)

Stating "Winners Win Big!" p.23

• Implementation of massive "efficiency plans"
• The oil service and equipment industry
• The world's engineering and construction companies
• Companies that can adapt to high energy costs fast
• All consumer goods who win market share in building prosperity among oil producing world

I have to agree with all these points. Imagine what someone who is actively employed in the oil and gas industry will be doing. Think of the software tools they will need to make this future a reality. A software application that meets their needs because they were one of the fundamental elements of the development, the user. Join me here.

Technorati Tags: People's, Simmons, Peak-Oil, Organization,

Change is everywhere.

Bear Stearns is gone. Doesn't it seem like the financial markets never seem to regain their footings. It appears that unfortunately Bear Stearns had scheduled their first quarter news conference for Monday March 17, 2008. That being today in which they would report large losses, the management chose instead to take $2.00 per share (Down $27 since Friday's close) instead and be taken over by JPMorgan. With over $380 billion in Bear Stearns liabilities, lets hope JPMorgan stays afloat!

Shell will be announcing their reserves tomorrow, and I suspect just as Chevron's were bad news we'll see the same problems form Shell. Last week Chevron announced that their reserves are now below the level they were before they purchased Union oil's assets. Recall that was a few years ago and was a moderately sized acquisition. As fast as these energy companies try to move they are constrained by the ability of the organization to change to the greater demands of the higher levels of science and engineering per barrel of oil. The bureaucracy can't keep up.

Professor Carlota Perez is someone that I have written about on this blog before. Perez is a long range economic theorist of the Schumpeter style of creative destruction. She has been stating the Information & Communication Technologies are going through the "turning" phase in which they will finally take the lead position in creating product value. She also states the financial structure of the economy has become irrelevant and is unable to provide the sustained value generation that is necessary for the future. Check out the 7 other blog posts I have written on Perez here.

The entire purpose of this blog is to provide a software development vehicle for the User to participate, design and develop the software they need. The software that establishes their role in the new organization of the energy industry, the Joint Operating Committee. As I suspect with Bear Stearns, the current bureaucracies will not have the organizational speed and innovativeness to stay ahead of the difficulties of this new market and its cold brutal realities. Join me here in what Professor Perez calls the future.

Technorati Tags: People's, Perez, Failure, Energy,

Why this software development project needs to be done.

I am writing the draft specification of the Partnership Accounting Module and it strikes me how and why this software needs to be built. And this community is the only way in which it can be done. Compare the differences and advantages.

User defined software development

People need to have an influence in the development of their software. Influence in order to get things done in their day to day. And influence on how to improve them, how to change them and make their jobs easier and more productive. Who else can define, build and use an application like People, Ideas & Objects, as I note below, there is no one else.

There is an important time-lapse element in the process of this project. A user may find a change is needed to the software due to a bug, a change in regulations or a general enhancement. In this project the user is the key change driver, all they will need to do is ask. Which circumvents the long tedious and ultimately futile current bureaucratic process where really there is nothing that can be changed?

Who has the authority to make the necessary changes? When a contradiction arises between the vision and the implementation, who can orchestrate the necessary changes? How about the user? The user is the only group of people who have an understanding of the industry in its entirety.

Top down software development.

Let’s assume that some of the large producers attempted to satisfy their software needs by hiring a group of developers to build an application for them. Where does the passion and desire to make the application its best come from? IT departments have no interest in developing new applications; they’re busy keeping the old ones running and have no time, motivation or interest.

Assuming a custom development for a handful of producers was successful. What about the rest of the industry, will they have access to the system? This has been tried in Canada with the application being released and announced dead on arrival early in 2007. What was the problem? Was the user group compensated, where are the vision, passion and drive? Is the IT department the reason that this last application was unusable?

Having developers work in isolation provides you with some of the nicest code ever written. Without the users actively demanding and communicating to the developer exactly what it is they want and need, the developers will be coding in a cloud. Certainly these developments are not structured to compensate the user for their time, passion or vision. Usually the people are told to use the application after a few days training.

Legacy systems.

How many applications were initially developed in the 1980’s that are still in use today? My answer would be far too many. But these applications have been able to generate large percentage market shares because of a familiarity of the users in getting things done. Simply the users begin to understand how the application works and are able to devise work around’s to get their work done. Without large spreadsheets to help this process along, people would be working night and day trying to keep up. Nonetheless, no one is championing the cause to have these relics continuing towards the future.

The software vendors will do it.

Software vendors as I have mentioned are constrained by customers and particularly by their code base. They don’t want to change. Although there is strong demand for change, there are no financial resources available for them to do so. It’s a fundamentally flawed business model that the Open Source world sought to resolve and indeed ended. To begin the process of adopting user driven developments would increase their budget substantially. Since they have limited money for developers, it is reasonable to assume they have no money for users.

This would also apply to SAP and Oracle. Although for other reasons the industry has tried those applications and was disappointed. I doubt that another opportunity would be provided to them.

The problem.

Time is now passing by rather quickly. The producers were able to find more oil then they produced up until a few years ago. Now some are finding only 15% of their production with multi-billion dollar budgets. This is a road to oblivion that the producers management seems content with. Their pensions are safe and they have the situation in hand.

Producers are paralyzed by their own complexity. Incapable of responding to any and all change signals. Yet it is management that may be one group that responds to this opportunity. Holding two opposing views on a topic is apparently one of the things we humans do well. If their retirement is already planned, what about some post retirement consulting fees?

The solution.

New forms of organization, such as the Joint Operating Committee as the key organizational construct, work hand in hand with today’s Information Technologies. Imagine an application that covers the whole scope of the industry, where the development and user costs are shared over the entire industry. Where the entire industry has access and the application operates seamlessly like it was built by the people who use it.

These issues need to be addressed from the start. After the publication of the draft specification, what’s my role in this software development? I have two choices absolutely nothing, and absolutely everything. The scope of this application is well beyond one or even one thousand people’s capacity to understand. The more I would try to involve myself, the more damage that would be done. It’s the user’s software. Another thing I can do is build the necessary infrastructure for the developers, users and the application itself. More processing power, network bandwidth, and money for the users and developers for this work building the People, Ideas & Objects application. A user-driven software application that achieves a new level of organizational performance for the industry. One that enables the innovations in the science and engineering that are needed and beyond the reach of today’s hierarchy. Join me here.

Technorati Tags: People's, Development, Innovation, Open-Source,

Energy, Development, and the Environment: An Appraisal Three Decades After the “Limits to Growth” Debate

Giovanni Dosi and Marco Grazzi

May 2006

This paper is part of the Laboratory of Economics and Management (LEM) working paper series. The cornerstone of the my thesis, that proved the Joint Operating Committee is the key organizational construct of the energy industry, used Professor Giovanni Dosi’s critical work “Sources, Procedures and Microeconomic Effects of Innovation” September 1988.

Professor Dosi is recognized as one, if not the premier, authority on innovation and his work is thorough and precise. Although he may be hard to read, that is a trait that is shared with most authors of great papers. So let’s dive in;

Dosi starts off by stating some assumptions that form the basis of his analysis. The most pertinent assumptions provide some insight to the current situation we are in.

Second, the higher the price for fossil fuels, the better it is in the long run for the world economy as for humankind in general. P.2

and

Third, even sky-rocketing prices of fossil fuels alone might not be enough to endogenously induce a sustainable pattern of consumption. P. 2

The long-term patterns of energy consumption and their sustainability.

This section sets out the problem that concerns me the most.

Inanimate sources of work exceeded animal work in the U.S. for the first time in 1870. p. 3

Not since 1870 has the physical labor of man been the primary driver of economic growth. In the last 138 years we have become so dependent on energy, and its associated efficiency, that there is difficulty understanding how the basic globalized economy would continue to function without energy. For example you have the opportunity to do a days work with a 200 horsepower forklift. If that 200 horsepower forklift suddenly is unusable due to fuel shortages, the alternative is to house, feed and incur the associated costs of 300 men. Without energy we would be reduced to the productivity that was attained in 1870.

Freeman and collaborators at the Science Policy Research Unit at Sussex – argued that growth could continue, provided that the two following conditions were to be met: (a) a combination of institutional changes that led to different paths of world development (with more emphasis on sustainability) and (b) a re-orientation of world R&D so that environmental objectives could be given higher priority (see Freeman [1992]). P. 4

We live in difficult times with problems that have many challenges. As difficult as it is to accept the two conditions that Dosi has listed above, I am unable to argue that there are alternatives. Dosi et al however notes the following optimistic point;

In fact, in our view the Club of Rome warnings massively underestimated the powers of technological progress with respect to the access to / exploitation of natural resources. P. 4

I have written before about the ability of the oil and gas industry to surprise on the upside with their performance. Oil and gas exists in the minds of oil and gas people. And I believe that given the right set of circumstances producers will surprise on the upside once again. However, I think that the structured hierarchy is the impediment to the global economy realizing the potential of these oil and gas people. Using the hierarchy is difficult to achieve “more,” and I just don't see how they can do it. It is applying last centuries thinking to this century’s problems.

The view that greater economic activity inevitably hurts the environment is based on static assumptions about technology, tastes and environment investment (IBRD [1992], p. 38). P. 6

This point is clearly evident in most people’s lives. If we were to continue on with the engine types that were built in the 1960’s and 1970’s we probably would have perished by now. But we didn’t and that fact is evidence of Dosi’s point here that the technology that is available today can solve many of these problems. As one can tell, I happen to think the current Information Technologies have only begun to provide for the world in this sense. And based on what Dosi says we’re in luck…

First, one tends to observe positive income elasticities for environmental quality; second, structural change in production and consumption toward “good” environmental friendly directions tend to be associated with higher per capita income; third, information on environmental consequences of economic activities increases with income levels. pp. 6 – 7

Does this assert that the U.S. and China will create less waste from more resources as their economies expand? I think it does and that seems to be consistent with Dosi’s thinking. I think the U.S. uses a lot of energy, but is the most efficient user of energy on the basis of GNP per unit of energy. Review of graph 8 and 5 are provided after Dosi’s point.

The bottom line is that technical progress – possibly together with structural change – has barely succeeded in stabilizing and even marginally decreasing energy consumption per capita, in high income countries: see figure 8 and 5 for the U.S. evidence. However demography heavily plays against any stabilization, let alone reduction of total energy consumption and of emissions in the environment. p. 11

Some – including the so-called IPAT model (standing for “Impact Population Affluence per capita Technology: cf. Ehrlich and Holdren [1971]) and other (see Shi [2003], Cole and Neumayer [2004], Dietz and Rosa [1997]) – do indeed account explicitly for demographics effects. The estimates – it turns out – yield elasticites which are in the neighborhood of one. Hence, other things being equal, even neglecting the effects on both energy consumption and emissions of growing per capita incomes, one should expect at least their doubling over the next three decades as a sheer effect of population growth. p. 12

Point well taken, the damage is cumulative.

What can technical progress do? And where does it come from?

If we turn now to document the progress of the North American automobile, which is the one area that can achieve benefits. We see the 10 mpg 1960's pony car replaced by its high teens mpg current version. We have reduced the amount of pollution produced in a substantial way. Yet, as I understand it the automobile still only uses 20% of its energy consumed on forward motion. Most is lost through heat. If we were to capture

60% of the energy that we used we could conceptually reduce our consumption by two thirds and reduce our environmental impact. It is obvious the 20% figure is substantially more then the vehicles of the 1960's. I believe this is the most promising area of where we can achieve the benefits we desire. Maybe the innovation will come as a refinery discovery, or simple retro-fit of some device in each vehicle, or maybe I am out to lunch here. Something needs to be done. And I would expect half of the energy savings to come from consumers and one half from producers.

Can technological advances reduce energy use and emissions in such a way to compensate the effect of both per capita income growth and demographics? p. 12

Dosi is not as optimistic as I.

We have already seen that energy-saving changes in production techniques appeared to have significantly contributed to the fall of energy intensity of GDP – at least at relatively high levels of development. Could the rate of technological progress be

increased to the extent of providing a full compensation for growth and demography? The answer we suggest is largely negative. p. 13

Still under the “inducement” rubric, public regulations have turned out to be a rather effective means of influencing the patterns of energy use and of emissions. In a curious paradox in the literature and in a good deal of policy debate one has both underestimated the environmental impact of the negative externalities stemming from production and locomotion and correspondingly overestimated the cost of regulation. p. 14

I would not recommend any changes to regulations. Although they are believed here to be more effective, I think the market will find its way through use of the market prices. Dosi lives in Italy where regulation may be more effective, by his estimation, and more acceptable. Here in gas guzzling North America we consider regulation is a bad word.

There is a general lesson here: imported price shocks might exert an important influence on the energy intensity of particular energy sources but dramatic changes in their use can only be made possible by the emergence and diffusion of new technological paradigms: in the case of electricity generation these are plausibly nuclear power and, eventually, photovoltaic and nuclear fusion; and, in the domain of locomotion, hydrogen-based means of transportation. p. 14

The higher energy prices are sending information to producers and consumers that invoke billions of decisions each day. This is the most effective way to deal with the energy concerns. Recall that without energy we are reduced to a lifestyle consistent with the year 1870. Price shocks have only begun in this process.

Indeed, technological advancement has reduced, for a given level of consumption of energy, the need for manufactured capital. Nevertheless, this trend has been counterbalanced by a corresponding trend in mechanization, which has substituted capital to work of manpower or animals. p. 15

Some Policy Suggestion by way of a Conclusion

The following policy suggestions I think stand on their own. Much of this thinking is new, to me at least, and should garner your serious consideration.

What is certain in our view is that the cumulative effect of such big and small evolutionary changes will not take care of itself as the most optimistic proponents of “Environmental Kuznets Curve” appear to suggest. Most likely an explosive demography let running until a new “steady state” forecasted somewhere between 12 and 20 billion inhabitants would be sufficient to lead beyond a disaster threshold which in fact some analysts believe that we have already passed (cf. Ehrlich and Ehrlich [1990]). pp. 15 – 16

Hence, sustainability is looming not for reasons of scarcity as it was claimed three decades ago but in a sense for lack of scarcity – at least with respect to energy availability and consumption. p. 16

As Nelson and Winter [1982] put it:

“The processes of change are continually tossing up new “externalities” (remember double clicking any word on this website will provide the answers.com entry for that word) that must be dealt with in some manner or other. In a regime in which technical advance is occurring and organizational structure is evolving in response to changing patterns of demand and supply, new non-market interactions that are not contained adequately by prevailing laws and policies are almost certain to appear, and old ones may disappear. Long-lasting chemical insecticides were not a problem eighty years ago. Horse manure polluted the cities buy automotive emissions did not. The canonical “externalities” problem of evolutionary theory is the generation by new technologies of benefits and costs that old institutional structure ignore.” (Nelson and Winter {[1982, p.368.) p.16

Second one should consider high prices of fossil fuels as a blessing rather than a curse. Of course there is, associated with it, a serious distributive problem which is not possible to discuss here. However, one should worry even more if some fossil fuels – as especially the most polluting one, coal – remains relatively cheap. p. 16

Third, it is unfair and unpractical to demand that emerging economies pay the full cost of “greener” patterns of production: only a mix of (i) mechanisms of preferential treatment of “greener” commodities and (ii) international transfer of less polluting technologies is likely to lower the peaks of whatever EKCs, if they exist at all. p. 16

Fourth, we have mentioned above that massive reductions in the levels of net emissions – to repeat, as such a necessary condition for long-term environmental sustainability – are likely to come only with the development of new technological paradigms. p. 17

On the grounds of what we know now the photovoltaic appear to be the most promising one, with, maybe, fusion, in a future further away. The emergence of new paradigms, however, generally demands major advances in basic and applied research sponsored to a good extent by public agencies. Massive “mission-oriented” projects in this area by the ensemble of developed countries are an urgent must. p. 17 Finally, possibly the most difficult issue: introduce measure aimed at the fast stabilization of population level well before the “natural asymptotic levels” from current forecasts. p. 17

The alternative is probably the “evolution towards collapse” brilliantly described by Diamond [2005] in several occurrences of “suicidal civilization” form the past. p. 17

Technorati Tags: People's, Dosi, LEM, Environment, Energy,

Google IPv6 2008 Conference

IPv6 is a cornerstone of the People, Ideas & Objects technical vision, and a critical component of the Draft Security & Access Control Module specification, and for that matter the entire People, Ideas & Objects application. Google held a 2008 IPv6 Conference and have posted several videos of it on YouTube. (Here, here and here.) The last video of the series provides a question and answer forum that is moderated by Google Vice-President Vint Cerf. Vint Cerf is the individual at arpanet that decided on the 32 bit addressing space in IPv4. Additional representation from Google and Cisco and many other vendors discuss some of the issues, opportunities and desires of this future technology.

An interesting comment about the Apple product line was made by one of the commenter's. Noting that Apple was implementing an inside / outside type of thinking that is inconsistent with the IPv6 protocol's. All Apple hardware and software are IPv6 capable until the user turns it off. As a result you are able to use the technology, for yourself, with the full advantages of IPv6. IPv6 is about peer to peer networking and the elimination of the client-server mindset. Apple's products provide a work around where you can view the screen on your home computer at your work, or anywhere you may be in the world. This is done through making a gateway out of their wireless, and hence making the commenter's point temporarily valid.

The second video has the Cisco Technology Product Manager Patrick Grossetete stating "There is no reason to make an application that doesn't use both IPv4 and IPv6 today." It is my opinion that most of the applications operating within the oil and gas industry are not IPv6, and I can say this as most of the applications currently in oil and gas are unaware that their is a network outside of the Intranet in which the operate.

Why is IPv6 a cornerstone of the People, Ideas & Objects technical vision? IPv6 enables 2 to the power of 128 addressing, enabling every device made and ever to be made to have its own static IP address. Enabling the device to be monitored and controlled. Innovation of earth sciences and engineering disciplines are sciences that deal with time, pressure and temperature. Things that can therefore be controlled and monitored. What better way for an industry to have to make this change then through a dedicated software development capability, such as People, Ideas & Objects is offering.

Technorati Tags: People's, Vision, Change, Development,