213 karma · joined September 12, 2007
Stats:
* There are thousands of independent oil and gas producers in the United States.
* Independent producers develop 90 percent of domestic oil and gas wells, produce 68 percent of domestic oil and produce 82 percent of domestic natural gas.
* Most independents have fewer than 20 employees.
See the "Independent Petroleum Association of America": http://www.ipaa.org
* The Computer History Museum talk is called "Unwinnable Wars: Personal Persepctives on Technology Leadership" and can be accessed through Google Video
Notes from the talk:
"Lessons Learned":
1. Against A Fast Competitor, A Cloning Strategy Doesn't Work
* For instance, Sun's attempt to develop a Win32 API Clone called WABI failed
2. There will always be an open source choice
3. Consortia don't work
4. There will always be a Microsoft or IBM, etc...
5. Multi-software unification doesn't work (license conflicts, etc...)
6. Your strategy should be complete market domination. Because if you don't, someone else will. There will always be unitary choice at every control point.
Strategies That Work:
1. Low-cost proprietary (Dell, Ebay, Microsoft)
This is actually the second version of the same idea -- "an oil and gas search engine".
The first version was called "Hydrocarbon Search": http://hydrocarbon.search.eser.org/
By including delicious-like hierarchical tags, the second version became much more useful.
Problem was, there was no business model.
So, I'm working on the third version now -- its designed to run on the yet-to-be-released GPS-enabled iPad.
So, you can take it out into the field and have it tell you about nearby oil wells, seismic surveys, leaseholds, remote sensing data, surface linears, offshore oil and gas blocks (if you are on a boat, for example), etc...
It's going to be pretty sweet. The business model is to charge for each region seperately: north texas, west texas, east texas, colorado, offshore shallow gulf of mexico, offshore deep-water gulf of mexico, north sea, australia, etc...
And since the data changes daily, it will be a subscription service.
Hopefully, third time is a charm
Hierarchical tagging has tremendous practical utility for sifting through large volumes of data.
You can order a 65-kW microturbine from Capstone Turbine Corp for about $40,000 USD.
Natgas-powered microturbines have commonly been used for distributed power generation in industrial settings (hotels, hospitals, etc...)
See Ingersoll Rand: http://www.ingersollrandproducts.com/IS/Category.aspx-am_en-...
See Captsone Turbine Corp: http://www.microturbine.com/prodsol/solutions/chp.asp
Try Googling for "microturbine".
[edit] Also, "Microturbines: Applications for Distributed Energy Systems" is a good book on the subject. Amazon: http://www.amazon.com/Microturbines-Applications-Distributed...
The United States' consumer-led economy isn't "booming".
"The problem with global recessions is that demand for everything tanks and that includes raw materials."
Have you checked the price of gold and oil recently? Those definitely _are_ booming :-)
"The so called "voracious appetite" of China is only voracious because they use it to feed the voracious appetite of America for consumer goods. If Americans keep getting poorer that appetite of China will no longer be voracious and raw materials prices will keep falling."
China's economy is expected to grow 8.3% this year, and raw materials prices are soaring. Believe me, I know :)
The only thing that's falling is the consumer-sector of the economy. The US economy is bifrucating between core industries and the consumer sector.
I think it's reasonable to expect that the consumer side of the US economy will contract dramatically from the 70% of economic activity that it currently represents -- it has to come more in-line with the rest of the world.
It's a fallacy to think that the consumer has to drive economic growth -- that's been a phenomenon unique to the US since WWII.
The United States exports over 60 million tons of coal each year.
"Good luck basing our economy on coal."
China is building one new coal fired power plant each week. The OECD projects China's economy to grow 8.3% this year -- while the rest of the world is mired in a recession. China's entire economy is based on coal.
Warren buffet just bet the entire future of Berkshire Hathaway, his life's work, on coal -- BNSF is the prime mover of US coal exports to China.
You really have no clue about hydrocarbons.
Carbohydrates are what you eat for breakfast.
"Reserves of Fossil Fuels Plus Technically Recoverable Undiscovered Oil and Natural Gas:" ---
Russia: 293.7 ---
Saudi Arabia Estimated Undiscovered Oil and Gas: 231.3 ---
United States Undiscovered Oil and Gas: 351.5 ---
351.5 > 293.7 > 231.3
Regardless, I'm putting my life where my mouth is. I started my own oil and natural gas exploration and production company in Denver.
I've also spun off a second company, a mineral royalties company, that is focused on the acquisition and divestiture of North American mineral rights in producing open-pit mines.
And finally, I've started a third US natural resources company, SonicFrac, to develop a solid-state fracturing device for optimizing the production of US Shale gas wells.
I also invest every last penny that I take home back into US mineral rights, US oil and gas prospects, and US minining royalties.
I own stock in dozens of publicly traded oil, gas, mining, and resource development companies.
Natural resources are the first thing I think about when I wakeup in the morning, and the last thing I think about when I go to bed at night.
I'm 26.
Perhaps I'm irrationally optimistic about US resource wealth...
I don't believe that I am.
But, you _need_ to be irrationally passionate about what you do. Whatever it is.
If you're running a consumer internet company, and are not irrationally passionate about its future, I doubt you could persevere through the trials and tribulations of being an entrepreneur.
I am a US natural resources entrepreneur. And I am zealous about what I do. You should be, too.
By fully exploiting this mineral wealth, the US could not only pay off its entire national debt, but also generate trillions of dollars of surplus tax revenue, pay for universal health care, cut taxes, eliminate the federal income tax, and create tens of millions of American jobs.
Interesting Fact: The United States has more oil and natural gas than any other country in the entire world, including Saudi Arabia. These are the official findings of the United States Senate, page 23: http://j.mp/3HIfQi
We could more than offset our trade deficit with China by feeding their voracious appetite for natural resources.
Another interesting fact: if Nevada were a country, it would be the world's 4th largest producer of Gold.
On a per-capita basis, the United States is sitting on a mind numbingly huge resource of untapped mineral wealth.
We could literally dig out way out of debt.
I'm hacking together a perl script right now using the Mechanical Turk API.
It's automatically spliting up the mp3 files, generating the html forms, and loading them into MTurk.
I'm going to use a 2x coverage for each chunk and see what happens.
This is a brilliant idea. Thank you for the suggestion! I can't believe it didn't occur to me before -- and we are _very_ heavy users of AWS.
You would have to be a complete idiot now to sign up for Quicken online. Intuit has just completely destroyed an entire revenue stream.
The cost of trucking is dominated by the fuel-cost-per-ton-mile.
Whereas the cost of moving 1 ton of goods over rail is dominated by the cost of labor, the cost of moving 1 ton of goods via truck is dominated by the cost of fuel.
In point of fact, rail freight gets ~436 ton miles per gallon.
The only mode of transport that gets more ton-miles-per-gallon is water transport (DSO, dry bulk shipping, oil and gas tankers, panamax, river barges, etc...)
The edge case is liquid and gaseous hydrocarbons, which can be transported via pipeline. It's no surprise that Buffet has been buying up oil and gas pipelines over the past several years.
The only catch here is that waterway transport inside the United States has sub-optimal efficiency due to the Jones Act.
Specifically, the U.S. onshore natural gas business is currently focused on what are called shale gas "resource plays". These are large contiguous blocks of acreage -- hundreds of thousands of acres -- over which thousands of wells are drilled one-after-another, in a manufacturing process. What makes this possible is a large, contiguous, underlying resource of natural gas reserves, trapped in tight rocks.
The key to profitably exploiting these resource plays is finding the right "formula" that can be repetitively applied to drilling and completing each well. There is no time to individually sit down and engineer each well. All you can do is analyze the data after the fact.
The profitability of each gas well is influenced by hundreds of variables. For instance, you have to "fracture stimulate" a gas well using a variable combination of hundreds of chemicals, each in a varying volume, with a variable pressure, to a variable depth. The well itself may have a variable number of frac stages, with a variable number of horizontal lateral wells connecting it to the reservoir, with a variable length for each lateral.
The question you have to answer is: given thousands of data points over thousands of individual wells, what is the most profitable "formula" for drilling a well in a particular resource play? Profitability is defined as the present value of the discounted future cash flow of the well using a discount rate of 10% -- you'll hear people talk about "the PV10". You know how each well has performed after it was drilled, you know what its profitability was, and you know what formula was applied to drill and to complete it. And you have this data for hundreds of wells -- each using a different combination of variables. And there's new data added every day.
There is a _lot_ of money riding on the right answer to this question.
There is a _massive_ amount of data in the oil and gas business. And every year there are entirely new classes of data being generated. 2D seismic, then 3D seismic, then microseismic, completion data, well logs, magnetic, gravity, surface linears, etc...
It's not surprising that one of the largest customers to the supercomputing industry -- after defense -- is the oil and gas business.
One trick here is that this data is usually locked up inside proprietary databases shared amongst companies in different industry consortia. So, you really have to be a player in the business to have access to the data -- that doesn't mean that you have any clue how to analyze it, however.
And there are big QA problems with this data, too. So, you have to deal with that as well.
The average age of an employee at an oil and gas E&P (exploration and production) company in 2009 is 55 years old. These are highly prized employees with experience and knowledge that is in short supply in the industry.
Over the next 25 years (through 2035), the global hydrocarbons industry is estimated to invest 22 TRILLION dollars of capital (2009 USD) to meet what is expected to be a doubling of world energy demand.
Do the math.
Computer scientists, chemical engineers, geophysicists, mechanical engineers, biologists, petroleum engineers, etc... It doesn't matter. You would be surprised at the voracious appetite of the global hydrocarbons industry for new technology and talent.
I'm obviously biased, being in the business myself. But, the next time you're at a college engineering job fair, spend a few minutes at the booths of the E&P companies. You may be intrigued.
There's no business like the oil business.
I hacked up a prototype last night that creates a reverse index of:
tags => item GUID's => a precomputed bloom filter for all tags in that GUID
Each tag has its own reverse-index, which is stored in a separate file assembled using O_APPEND. The entries in each file are pre-sorted based on a predefined ranking algorithm.
Queries are mapped to cluster nodes using a CRC32 hash modulo across the number of cluster nodes.
Tag conjunction queries are run by computing a bloom filter for the tags in the query. The tag with the fewest GUID's is determined (approximately) through a LUT stored in main-memory. The query bloom filter is then sequentially compared using a bitwise-and with each of the bloom filters in the appropriate reverse-index file.
After 10 matches are found, the results are rendered.
No check is done for false positives.
The problem I'm having now is in prepending new entries to the start of a reverse-index file. This operation is not performant. Since it's out-of-band with the query stream, it's tolerable for the time being.
We're looking at implementing a tagging system for navigating through a large proprietary datastore of oil and gas well data.
The problem we're running into is scaling conjunction queries without blowing-out our hardware budget -- 100's of tags per item with tens of millions of items, updated daily.
Here is an interesting thought experiment to try:
1) The Dow Jones Industry Average (aka "the Dow") is a weighted average of the aggregate value of 30 of the largest and most widely held public companies in the United States. In other words, think of the Dow as answering this question: "How many dollars does it take for me to buy a piece of the most valuable corporations in the United States?"
2) Now, try this: draw a graph of the Dow denominated not in dollars, but in barrels of oil.
3) In other words, answer this question: "how many barrels of oil does it take to buy a piece of the most valuable publicly-traded corporations in the United States?" (Also, try this for Gold -- "how many ounces of Gold does it take to buy a unit of the Dow?")
4) Answer this question for: (1) the present day, (2) 1999 -- the peak of the dot-com bubble, (3) 1980 -- the depths of the pre-Reagan recession, (4) 1933 -- the depths of the "Great Depression", (5) 1972 -- the aftermath of Johnson's "great society" and the Vietnam war.
5) Notice anything interesting?
6) This explains why may cash-rich entities, such as the sovereign wealth fund of China, are trading their dollars for stakes in petroleum producing properties. This asset allocation provides two benefits: (1) protection of their principal, (2) a steady cash-flow of fiat currency with which to acquire more properties, and/or finance liabilities.
7) Every time the Obama administration runs a deficit of US dollars and calls on the treasury and/or fed to increase the supply of dollars (and to consequently decrease the value of dollars in _your_ pocket), think of it as a wealth transfer to people in the Oil and Gas business; As well as to those who have the resources, connections, and know-how to allocate capital to the hydrocarbons industry.
There is a substitute for dollars, it's just not available to the average person -- whose net work will be steadily eroded, in real terms, as the U.S. continues to run deficits to finance: (1) two wars, (2) "universal health care", (3) "clean energy" subsidies
Every time you read a dollar-denominated figure, convert that to barrels of oil. It's a fascinating exercise -- especially when you have some historical perspective on this metric.
The thing with oil is that you can only consume what you have. Unfortunately, that is not true with dollars -- trillions of them have been created out of thin air over the past year.
Here's a radical idea: What if there were a country who pegged it's currency not to the dollar, or to gold, but rather to oil?
And no, I didn't have an "in" to the hydrocarbons business (a lot of people ask). My background is Stanford CS.
On a cost-per-BTU basis, taking into account upfront CAPEX, cost-of-capital, present-value discounted cash flow analysis (PV10, for example), storage, processing, transport, and end-use thermodynamics, there are no known energy sources in 2009 that are cost-competitive with hydrocarbons.
Which probably explains why such insanely large amounts of cash are flowing to K-Street for Waxman Markey.
The only applications where using something other than hydrocarbons makes business sense, is in applications where the cost of energy is not important.
For instance, telecommunications satellites. Or, closer to home, energizer batteries at the grocery store. A single D-cell lead-acid battery has an energy cost of $500,000 per kilowatt-hour. However, no one thinks of it in those terms -- cost-of-energy is not an important factor for this niche.
Thinking of "renewable energy" sources as a replacement for hydrocarbons is a huge mistake. Hydrocarbons are used in large-scale applications where cost is the only metric that matters. And on that metric, it is impossible to compete with hydrocarbons.
The best bet for "clean tech" is to target niche applications that are underserved by hydrocarbons. Clearly, you're not going to use an internal combusion engine to power your laptop. Rather, you're going to shell out hundreds of dollars for a lithium ion battery -- and then charge that battery from the grid, which is likely to be powered by coal or natural-gas power plants.
To take a page from the enterprise software world, the problem with "clean tech" and "green tech" startups is that they are trying to make a "value" sale in a cost-driven market. That never works.
Unless, of course, you can get the federal government to tax the low-cost producers to death.
It also handles cookies and can dynamically determine whether or not it should proxify images and CSS assets.
CGIProxy also handles flash.
In fact, CGIProxy can fully proxify an SSL-encrypted GMail session out-of-the-box.
CGIProxy is _very_ mature technology. Take a look at the source code -- it handles 100's of special-cases.
Some of the special-cases that CGIProxy handles are truly bizarre. Reading through the CGIProxy source code is actually pretty fascinating.
This brings up an interesting point. If you're interviewing a software engineering candidate, ask them what their favorite language is. Next, ask them to write a simple HTTP server in that language. Finally, ask them to write a reverse HTTP proxy that works with the server they just wrote. This is a surprisingly effective way of separating the wheat from the chaff. Most people with CS degrees are completely incapable of doing this.
It's not too hard to do something similar in perl.
1) start off by downloading a copy of CGIProxy: http://www.jmarshall.com/tools/cgiproxy/
2) Setup an apache server running CGIProxy
3) Hack the interface box at the top of the screen to include: facebook integration, a meebo chat box, etc...
The problem is that this sort of thing tends to _really_ upset webmasters. So, you'll need to restrict proxy sessions to specific domains (zappos.com, etc...) from which you've received approval to run an open proxy against.
It's surprising how far you can take this with one server; what you want to do is to port CGIProxy so that it runs on a custom HTTP epoll server, instead of on Apache. Brad Fitzpatrick has some great perl code on CPAN that shows you how to do this.
Once you have CGIProxy running on epoll (with epoll enabled in the kernel config, of course) you can easily handle thousands of concurrent clients on a single Amazon EC2 (small) instance.
You can disable proxification for images and media to enhance throughput (and to cut down on your bandwidth usage).
This is basically all that Facebook platform is -- a glorified reverse HTTP proxy.
Reverse HTTP proxies are a neat hack. But, the excitement tends to wear off once you realize that's all they really are. The underlying websites against which you are proxifying retain all of the true value. Plus, you are beholden to their TOS (Terms of Service).
Some of the earliest applications of reverse HTTP proxies (back in the 90's) were for anonymizing web sessions. That tends not to work too well, because no one wants to assume all of that liability.
An obvious application of reverse HTTP proxies would be to create an "enhanced" Craigslist: facebook integration, chat windows, better site search, LSA-based suggestions, etc.... This sounds like a great idea until you realize that the Craigslist TOS prohibits this sort of thing -- as do most websites. Even if the TOS is vague about this, it's only a matter of time before you get shut down -- no one wants a middleman proxying traffic between their website and their customers.
Remember when an ISP in Texas was inserting ads into people's browsing sessions? They were using reverse HTTP proxies.
I haven't even discussed the security implications of this. It's trivial to setup an HTTPS reverse proxy. CGIProxy even works with an SSL-encrypted GMail session. Think about that: all of your username/password data is being handed to a 3rd party middleman in plain text.
Even if the middleman running the reverse HTTP proxy is the nicest guy in the whole world, the security of your data now depends on two different companies getting their security protocls correct: (1) the company running the HTTP proxy, (2) the back-end website.
I'm sure the intentions behind Plurchase are excellent. But, this is a _very_ bad idea.
The only way to fix this situation, would be to to license an "enterprisey" white-label reverse HTTP proxy to e-commerce sites for internal use behind their firewall. For instance, Plurchase could license a "reverse HTTP proxy social networking applicance" to Zappos as a way to retrofit "social networking" features onto the existing Zappos website. That would address many of these issues. But, it's an entirely different business. Plus, the "web accelerator appliance" model has never worked very well.
Eventually, all features get folded into the underlying platform.
Larry Ellison said: "Flash".
Apparently, Oracle is taking flash very seriously. They already have a flash-based Oracle database product that is shipping.
And with the Sun acquisition, Oracle now owns MySQL.
RethinkDB needs to move ahead fast.
Online social networking has an extremely low value-per-impression.
Professional golfing has an extremely high value-per-impression.
Which explains why Tiger Woods has generated more in profits than the entire history of the online social networking business.
It's no wonder that the State of California is bankrupt.
While the state of California is piling on _billions_ of dollars in debt to pay for unionized wellfare programs, raising tax rates across the board on its citizens, cutting essential city and state services, closing state parks, issuing "IOU's" to people in-lieu of tax refunds, and seeing its general obligation bonds downgraded below "junk" status, it apparently is still OK to spend taxpayer money cutting down perfectly healthy trees to make sure that all of the trees on a street are the same height.
This in a state that has more Honda Prius' per-capita than any other state in the union.
Isn't being "green" wonderful?
I'm sure there's an entire office of twinkie-munching government bureaucrats that could be fired to compensate the California tax-payer for this gross misappropriation of his hard-earned tax dollars.