I picked up the term from my colleagues at the Santa Fe Institute in New Mexico.
“Only when we embrace and respect economic complexity will we be able to predict the behaviours of real markets and begin the design of effective policy and regulation” Santa Fe Institute.
New Mexico is fertile territory for me. My good friend Stephen Fleming is Director of the “Artists in Residence” programme down there at Roswell.
Re the Santa Fe Institute; I have known Mike McMaster from his “Organising for Complexity” days back in 1996. I have only recently been introduced to Dr Stuart Kauffman, an experimental Biologist amongst other things, and another associate of the Institute.
I live in the energy world, the information world, self organising and evolutionary. I am an Oil and Gas man. We, AB Consult International, are bringing the ideas around complexity economics to the UKCS Oil and Gas province from FDP to COP.
Like ecosystems, exploration, production; infrastructure; transport and supply, are living networks of interacting agents.
Traditional theories and studies are, by and large, designed to filter out intractable or low rated complexities, confining the economics to static problems to be solved top-down. AB Consult International simulate the interactions from the bottom up with no limit to the scale of interaction.
I have been heavily influenced by the discussion at the Santa Fe Institute and its approach to economic complexity. AB Consult International has developed an approach to lifecycle property development modelling micro interactions to observe the macro results. Results that are available in real time with the discussion dashboard in the room, on your tablet or any other mobile device.
The economics of the UKCS will dictate MER and the ultimate COP date.
We are in the post Brexit un-certainty cycle, President Trump is about to take office, President Putin has consolidated power and economic growth has moved East. There are general elections across Europe next spring and summer.
In this environment down stream Oil and Gas is at the mercy of the markets and upstream development is bereft of investment.
Current management models are, by and large derived from the notion that, unless disturbed markets naturally and inexorably relax to equilibrium.
I think it is safe to assume that the Markets are disturbed?
For the UKCS going forward, with few exceptions, we are likely to be working with what we have; looking to develop/re-develop existing properties and clusters; retaining transport and supply capacity. All the while being cognisant of the direct challenge offered by individual or collective COP.
Embrace economic complexity to be able to better predict behaviours in the “Real” complex market, design effective decision making, policy interventions and regulatory controls.
Francis J Kiernan
CEO AB Consult International