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I recently was “followed” by Dennis McMahon of mygreenflight, a company that bills itself as offering carbon offsets for the air traveller. This author isn’t necessarily a fan of offsetting (see here) so being followed by an offset provider, especially one so bullishly named was an act just bound to make me poke around a little to see what was what. After some surfing around mygreenflight’s site for a while I emailed off some questions to the vendor, which Dennis subsequently and thoughtfully answered - more on that in a moment.

Before getting to that detail however it is worth spending a moment looking at why the entire concept of offsetting might be a little flawed. Offsetting is best described as a cousin of carbon cap and trade schemes (CCT), which themselves are the market led approach to managing and eventually reducing industry emissions. CCT schemes, like the UK’s Carbon Reduction Commitment, the European Emissions Trading Scheme, and the hotly debated nascent Australian scheme seek to create a finite market in emissions permissions. That subtlety is often ignored, such schemes do not actually trade emissions, they trade permission slips. Such permission slips are really no more than promissory notes that have a financial value intended to be significant enough that a nation or industry that needs to buy them will eventually be pushed into actually taking steps of their own to actually reduce the levels of GHG they emit. In theory, the costs associated with reducing actual emissions is less than the cost of continually buying the permission slips, therefore setting up an economic incentive to change. Meanwhile, a purchased permission is withdrawn from the market thus reducing the pool of permissions available, and the money garnered through the purchase of the permission slip might even be invested in some form or another of carbon sequestration equal to the task of absorbing the GHG emitted.

In reality however several major flaws are evident.

For a start, the cash value of the permission slips does not encourage investment in techniques, technology, or behaviour that actually reduces GHG emissions. The EU ETS is infamous for the wild fluctuation in the value of the permission slips. Such fluctuations will only be eliminated when the market is regulated and managed in a planned and interventionist manner (much to the angst of those who trust entirely in the free market approach - they see the open trade as being that akin to any other commodity while ignoring the fact that the price needs to be managed as the intention is actually to influence behaviour).

Secondly permission slips don’t reduce actual emissions. Meanwhile the GHG were almost certainly actually emitted by the individual/organisation that purchased the permission slip, and lets not forget that those emissions then stay in the atmosphere for a considerable period of time - think tens to hundreds of years. Offset schemes often claim that investment in them will result in creation of carbon sinks that will absorb a quantity of GHG equal to that emitted. Even if such action does occur (and there have been many cases where such claims are entirely fraudulent) it is highly unlikely that such schemes will effectively sequester GHGs for the entire duration that those GHGs that were actually emitted remain active in the atmosphere.

Some schemes claim that the money raised through permissions trading is spent encouraging the retention of the world’s existing carbon sinks, usually in the form of forest conservation. For example offsets can be purchased to buy a chunk of Amazon rainforest, thus protecting it from logging or clearing to enable urban expansion, the growing of monoculture crops such as corn for biofuels, or beef cattle grazing. Of course the only significant remaining stands of such forests are in developing (none G20) countries and such clearing is as often performed to enable the farming of produce (as well as the logged timber) for export to the G8 nations as it is for reasons of domestic poverty and lifestyle pressures. Putting aside for a moment all the not insignificant questions regarding unwanted foreign intervention and ownership of land in such countries it is worth remembering again that stewardship of such carbon sinks needs to be maintained for the duration that the actually emitted GHGs remain active. Most importantly, remember that such schemes do not incrementally add sequestration capacity, they simply attempt to retain the paucity of what natural sequestration capacity that remains. Meanwhile we already know that that remaining capacity is insufficient to actually absorb the levels of GHGs being emitted. Therefore such efforts might best be described as knocking around the edges of the question of ownership of natural carbon sinks, rather than incrementally adding capacity or actually reducing real emissions.

With all that in mind lets return to the specific example of mygreenflight. The first thing to know is the roots of the company are in a logistics business the mission of which is to enable the airline industry to further expand. Therefore you have the conundrum of this being an offset company with a tactical goal of reducing emissions through the trading of permission slips, which meanwhile has the strategic goal of expanding an industry which is arguably already unsustainable. GHG emissions aside it is worth also remembering that the entire airline industry’s future is tenuous at best in light of ever rising fuel prices. The answer by the way to rising fuel prices lies not in a move to biofuels. Despite early and highly publicized PR stunts dressed up as trials biofuels remain a potential solution that even the IATA regards as being at least 15 years away from reality and anyway the demand for biofuels from the global airline industry would require biofuel crop monoculture on almost all of the Earth’s available arable land, including all that currently used for food crops and all that currently “used” by all those virgin forest carbon sinks.

All that aside, to test mygreenflight’s scheme I used the company’s offset calculator to see what it would cost me financially to purchase offsets, and meanwhile to see what they think is required to “absorb” the GHGs actually emitted in my flight. To do so I added one long haul flight and one short haul flight (economy return, using bmi and Qantas as my chosen airlines).

My flight details as entered were:

Shorthaul: London Heathrow to Edinburgh (LHR-EDI) bmi, Economy Return. 0.17 t of CO2 emitted, requiring an offset costing £1.30
Longhaul: London Heathrow to Sydney, Australia (LHR-SYD) Qantas Airways, Economy Return. 5.31 t of CO2 emitted, requiring an offset costing £41.86

Total: 5.47 t of emissions for a cost of £43.16 in purchased offsets.

The first observation is that if the goal of offsetting is to allow me to trade in a CCT scheme, the goal of which is to provide an economic framework that ultimately changes behaviour through the internalisation into the balance sheet of the economic externality that is the emissions, through the mechanism of incremental cost then it has done little to actually deliver. £43 and change is unlikely to actually encourage me to seek alternatives to flying - though to be fair there really isn’t an alternative to flying in order to get to Sydney, however £1.30 (less than the cost of a coffee at Heathrow) isn’t going to encourage a potential traveller to catch the train to Edinburgh (an act that the train operator Stagecoach calculates would result in 86.4Kg of carbon emissions). Of course given that mygreenflight’s strategic mission is to enable expansion of the airline industry it stands to reason that the emissions calculated, and the offset costs assigned to them be finely balanced between providing a feeling that the passenger is making a difference without actually encouraging the passenger to take up an alternative mode of transport (or even consider not travelling at all).

But I also wanted to know more on what my £43.86 was going to buy, and this is where I emailed mygreenflight for more details. To ensure that I capture the full Q&A exchange copied here is the email I received in reply from mygreenflight’s Dennis McMahon (spelling and grammar errors, if any are “sic”).

-snip-
Hi Simon,

My apologies for the delay in responding to your questions.
Please find my responses to your questions below:

YOUR QUESTION: What audit trail is there of what this money is actually used for?

MY RESPONSE:

Our systems will see the funds being applied to Voluntary Carbon Standard Projects that generate Voluntary Carbon Units or VCU’s, which are a subset of Verified Emission Reduction Units (VERs).

All projects from which we purchase offset credits need to have the following criteria:

· Third party verified by accredited Verifiers in this field
· Credits must be issued
· Credits must be listed (or able to be listed) on the TZ1 VCS Registry
· Credits when allocated to offsets purchased by passengers will be formally “retired” on the TZ1 Registry

Re the audit trail – our processes and systems are being reviewed by Bureau Veritas (UK office) to ensure that we have the correct systems in place now. Bureau Veritas will also be conducting periodic audits of the funds trail, and providing reports for same, to ensure that we accurately retire the equivalent number of credit tonnes to match the offset credits purchased.

Initially, there will be a delay between offsets purchased from the site and the retirement, as there is a need to purchase a commercial qty of credit tonnes from project developers. As we gain purchase trend data (both quantities and preferred project types) from clients such as yourself, and expand our airline partnering program, this approach will be replaced by forward purchases, so that retirement can be made from a pool of credits we have forward purchased.

YOUR QUESTION:

a) Is it to purchase and maintain natural forests or other CO2 sinks, if so how much land equals how much CO2 and for what period do you guarantee to manage the purchased asset?
b) Is it to plant new trees and support reforestation?
c) Is it to support CC&S technology research?
d) Is it to trade in ETS permits and if so which markets do you use (EU, UK,,,?).

Basically I am looking for some info on what you actually do that practically makes a difference.

MY RESPONSE

We have decided that we will be guided by our clients as to the project types that we support – you will note that we offer a range of project types (but not specific projects) on the calculator page at the moment. This is to ensure that we get actual feedback from clients about the projects that are of interest to them. Based on that data, and the quantity of tonnes offset for each project type, we will purchase and offset credits from those projects that client shave told us they want to support. Naturally, our purchases will be partially dictated by availability of credits, but we are determined to match client preferences with project types as much as we can.

In specific response to your questions on this topic:

a) We are maintaining a watching brief on forestry projects and developments related to the REDD projects. We think there will be accredited projects in this category post-Copenhagen, but at the moment, there is too much uncertainty as to methodologies to give us the confidence to purchase forestry credits. I know that there are many forestry projects generating credits in North America and other parts of the world, but as far as I am aware, none of those projects have sufficient credibility to be verified and accredited under either VCS or Clean Development Mechanism (CDM) rules.

Simon, if you are aware of any projects that meet the VCS or CDM criteria, please let me know.

b) See a)
c) Funds are not to support CC&S technology. This technology is currently way too speculative for us to get involved in – we would prefer to utilise credits from projects that have a solid bases in accepted methodology, and that meet the “additionality” criteria required fro VCS and / or CDM project verification
d) We are not looking to trade in ETS permits as part of the MyGreenFlight Carbon Offset program. We may assist airline clients in this area if asked, but it would be as a separate consultancy service.

YOUR QUESTION

I have thoroughly read through what you say on your “About us” pages, and am looking for me insight than “..we will obtain all of the verification and accreditation documentation from the Projects to ensure that they are fully accreditied (sic) and verified”

MY RESPONSE

Simon, every CDM or VCS Project must have a number of documents to establish the Project, to define it’s scope and the number of credit tonnes projected to be generated.

These include:
· Project design document
· Validation Report
· Monitoring Report
· Verification Report

These are the documents we will be checking to ensure that projects meet our criteria. In addition, we (or agents employed by us) may visit certain projects to confirm “on the ground” additional social co-benefits that may be claimed by the Project Developers.

DENNIS MCMAHON

Sales Manager
Greenflight

-/snip-

It must be said that Dennis’s reply, on behalf of mygreenflight is entirely professional, thorough and reasonably precise. Specifically and impressively he also puts forward the view that current forestry projects are tenuously beneficial to say the least. It is also worthy of note that the company does not currently invest in carbon capture and storage (CCS) technology development as such projects do not currently meet the criteria for additionality - meaning they don’t actually currently result in an additional carbon sequestration capacity. He is to be congratulated for taking on my questions and dealing with them in this manner.

Having said that, I’m still not sure what my £43.86 is buying - a strong sense remains that any offsets purchased from mygreenflight is simply being banked until such time as a suitable way for the company to invest the funds is found. A traveller may therefore assuage the guilt now of GHGs emitted into the atmosphere now, on the promise that sometime later something will be done that will somehow sequester an equivalent amount of emissions. While the emissions are guaranteed to be making a difference from the instant that they are released, what contractual guarantee does the purchaser have that later they will be neutralised through an investment that mygreenflight will make (not that I am in any way suggesting that the company will do less than make a best effort)?

So at this stage this exercise leaves me unchanged in my view that offsetting isn’t worth the effort. Travelling short haul distances by methods other than flying and in ways that reduce actual emissions (train etc) are not always possible, but they are also admittedly often less convenient and more expensive than the flying option. I remain of the opinion that when and if I have no alternative to fly I am making more of an actual difference by “copping” the expense and extra effort of not flying on a later occasion when the alternative does exist - in effect “banking” the money myself that I could have spent on offsetting into an account that I can later use to pay for a possibly more expensive train ticket, or even just treating myself to an extra coffee (with my £1.30) as a personal reward for making the effort.

The debate, if you can call it that, in the US over health care system reform is a truly bizarre spectacle, and one that is an abject lesson in how to distract an argument away from the core subject being discussed.

The indisputable fact is that approximately 40,000,000 people in the US cannot afford access to basic health care services. By “basic” I refer not to agonising decision over whether to have nipple enhancement or not while you’re in to get your breasts done. No…by ‘basic’ I mean services like non cosmetic dental care, A&E care, blood pressure and cholesterol diagnosis and treatment, diabetes diagnosis and treatment, natal care, and services to repair all the wear and tear experienced during the average first 18 years of life. The bottom line here is that the current system, the status quo, is structured such that 40 million mothers, fathers, grandparents, sons and daughters have zero ability to pay for services to fix health problems that are chronically painful and perhaps life threatening. With no “health care net” available either “no ability to pay” translates into “zero access”.

To reiterate what is an important and fundamental point. The current population of the UK is approximately 60 million people. If 40 million people in the UK were similarly effectively blocked from access to health care then two thirds of the population could not go to the dentist or doctor ever. The current population of Australia is 21 million - so if you deported all the doctors, nurses and dentists from Australia and closed all the hospitals and clinics you’d still only be halfway to denying 40 million people basic health care services.

Meanwhile, for the other 260 million or so Americans who do have access to health care, services and treatments are eye poppingly expensive. However, be careful your eye doesn’t pop too far out as it may not covered by the health insurance scheme provided by your employer - which is shelling out an estimated US$12,000 per employee per annum to pay for that insurance (providing insurance for the employee and up to 3 dependants). That’s US$12,000 more that could be paid directly to the employee as wages if the employer did not structurally have to cover the health insurance costs. If you think twelve thousand bucks is chicken feed, it is worth remembering that that figure is the about the US minimum wage - though it is also worth remembering that if you were an employee actually on minimum wages, it is unlikely that your employer would also be providing health insurance making you perhaps one of those 40 million people unfamiliar with the inside of a doctor’s waiting room.

This author speaks from experience with regards to the platinum coated pricing schemes of US health care as we had a son born in New York state during the family’s four year tenure in the USA. It is worth providing a short summary of those costs to provide perspective:
- total time mother/son spent in a hospital: 12 hours (the minimum time before you’re allowed to check out after giving birth)
- total time doctor spent in room: 60 seconds (to sign a form)
- nursing staff: 1 “in and out” with the majority of nursing provided by self funded midwife
- drugs and other interventions: zero (yes you read that right; no drugs, no interventions)
- use of “machines that bleep”: zero
- use of ambulance or similar: zero

In short - you would struggle to describe a birth experience that required less support from neo-natal services other than a home birth.

Total cost: just shy of US$8000; with the employer provided insurance paying for 90% and leaving us with a 10% or US$800 deductible. Just what was worth eight thousand dollars of medical treatment remains a mystery to this day.

Meanwhile the US is ranked by the WHO in almost all indicators, except for cancer survival rates, far below Oman, Morroco and Colombia, as well as the UK, France, Germany (just keep listing other major European and Scandinavian countries here), and Australia. The USA ranks 37th.

To summarise: the US has a health care system today that under-delivers against important key performance indicators (infant mortality, average life span etc), is eye wateringly expensive for those treatments it does provide, and leaves 40,000,000 people with zero health care. Oh, and by the way the status quo is projected to bankrupt the country entirely as it will fail to scale further as the populations increases and ages.

The debate therefore ought to be a simple one - does the US maintain this status quo, or does it seek to reform health care in such a way as to drastically improve the USA’s WHO rankings , provide basic services universally, and reduce the overall costs to prevent budgetary collapse.

However that isn’t the debate that is taking place. The debate that is taking place is over whether the provision of universal health care is “socialist” (translation: pinko subversise communist), and whether fantastical death panels will rule over the worth of Grandma’s life (Sarah Palin says she can see the Death Panels from her medicine cabinet). Take these two distracting and emotive topics, add a little dash of Glenn Beck to the aforementioned Salt of Palin and you’ve just hijacked what was a needed and sensible debate, and you’ve turned it instead into a roiling mess of argument that churns onward and achieves nothing. Or more accurately, it achieves the maintenance of the status quo.

Which brings us naturally to the topic of peak oil (this as my old friend George Watt would say, is a “neat little seque”). The connection here is twofold and less tenuous than you might think. Firstly, oil provides the energy that enables modern health care. Secondly, and more directly relevant to the main point here is that the debate over the timing of peak oil has been allowed to overshadow the necessary debate over the future of (petroleum based) energy prices.

The truth of the matter is that we will only definitively know when global oil supplies have peaked once we’re well down the slope of decline. Far enough down perhaps to have put behind us a few (more) instances of supply having insufficient scope of growth to meet real demand. There is much evidence to suggest that we’re already basically at the peak point, or just beyond. However arguing this point tends to just around in circles. It is very easy for peak-deniers to point to the status quo and argue that “Providers report significant reserves as they have in the past. They didn’t stop pumping last year. So they won’t stop pumping this year. And anyway, we can just drill a few more holes in the Alaskan tundra if we need more.” Such drill-baby-drill responses are the peak-oil equivalent of the pinko-communist-death-panel responses in the US healthcare debate. The main purpose, intentional or otherwise, is to maintain the direction and rate of the status quo and delay or prevent structural change and improvement.

The real discussion that needs to be taking place concerning oil is whether cheap oil will continue to be available. “Cheap” is of course a relative term. Ignoring for a moment that (not insignificant) fact of the infamous US$147 p/bl price peak, by “cheap” means “the median price of oil over the period during which it has fuelled the development and growth of the current economic model.” Furthermore, given that the maintenance of the social/economic/world-balance-of-power status quo relies on the oil price remaining somewhat near that median price, what are the implications for the economic decisions that are made countless times every day, that are based on the price of oil?

The outlook is such that it is almost certain, on balance, that anything but the status quo will result. For example, OPEC has for some time now called for a price range of between US$70 and US$80 p/bl as being the minimum that can support the necessary infrastructure and exploration investments required to maintain supply levels. Shell CEO Jeroen van der Veer stated in June of this year that “(All this) points to new price spikes and volatility further down the road.” The same Kuala Lumpur hosted Asian Oil and Gas conference heard BP CEO Tony Hayward state that a target price of US$60 to $80 p/bl is also in BP’s sights in order to pay for required investments.

A per barrel target price of between US$70 and $80 p/bl is a very interesting one for a number of reasons.

For a start, it represents the upward slope of prices for petroleum and oil-derived products (fertilizer and plastics feed stocks) that are felt downstream by consumers and industry. The Wall Street Journal reports that petroleum prices as a percentage of disposable income more than doubled between 1981 and 2008. This is enough to change consumer behaviour, and certainly enough to alter the balance of cost calculations for heavily oil dependent industries.

Secondly, it is worth looking at the 2006 study performed by the US Department of Commerce titled “Macroeconomic and Industrial Effects Of Higher Oil and Natural Gas Prices”. The D.O.C. study was designed to predict the effects on the US economy (and by extrapolation all other developed economies) of an oil price that is maintained in the range of US$70.00 to $80 p/bl for two years or more. Not surprisingly, the study found depressive effects on GDP, industrial output, consumer disposable income levels and more. All other things being equal such a price would also result in an additional 500,000 people becoming unemployed due to cross sector job losses, compared to an oil price range in the US$50 to $60 p/bl range.

Those resulting changes occur for a very simple reason: as oil prices increase (and therefore the prices of products derived directly and indirectly from oil increase) the decisions made by individuals whether acting as individual consumers or in their capacity as business decision makers changes too. Spend less, invest elsewhere, carry less employees, locate and manufacture elsewhere. Scaling upwards to the strategic and structural as oil prices continue to go upward from US70+ we eventually reach a point where airlines downsize and go out of business en masse, and where commuters desert their SUVs and catch a train or a bus instead. Jeff Rubin, former Chief Economist of CIBC Worldmarkets is quoted as saying “I think we’ll see a return to triple digit prices (per barrel oil prices) very early into an economic recovery”. His book titled “Why Your World is About to Get a Whole Lot Smaller: What the Price of Oil Means for the Way We Live” is worth a read as a basic outline of his thinking.

This therefore is the discussion we ought to be having - how do we achieve a soft landing for society as oil prices increase, and the associated economic decisions are reworked? Sure, there are clearly some, like Mr. Rubin who are sounding the drum. However the majority of individual and corporate decision makers continue with the assumption that energy prices will remain roughly in line with those enjoyed during the past 50 years, and that therefore the same structural economic system will continue. All the rest have either not noticed at all, or have been distracted by the circular debate regarding peak oil.

All of which is a segue if I ever seen one. And a sick one at that.

Over the last decade I’ve led or been involved in the review and auditing of numerous large-scale infrastructure projects. A worrying percentage of those projects had run into difficulties, prompting the audit – recovering from which required an expensive and time consuming re-engineering of the project . By large-scale infrastructure projects, I’m thinking of those projects, which span all (or most) Business Units and locations and impact upon multiple business processes. Such infrastructure projects typically include enterprise information security management deployments - in particular Identity and Access Management (a domain where most of this author’s hands-on experience lies), as well as other technology management areas, such as Network and Systems Management and Service Management. Of course it is always better to avoid the problems to begin with, rather than have to go through the process of project review, re-engineering and mitigation. Especially now when trading conditions dictate that every effort is made to deliver on time and under budget it is important that much effort is invested up front to get things right first time round. Four simple guiding principles distinguish the delivery of a successful enterprise project from one that needs eventual rescue:

Make a plan – and stick to it!
There are all sorts of variations on the theme of “Plans are nothing but planning is everything” attributed to Winston Churchill, Dwight D Eisenhower and General George Patten. My personal favourite is “No battle plan survives contact with the enemy”. However, when you’re undertaking an infrastructure project, it’s important to take the time to plan and prioritise properly. This includes engaging with key business stakeholders and building relationships with them. It’s vital that these stakeholders are at least represented, if not actively participating throughout the project.

Remember – the plan needs to stand up to the pressures that will inevitably arise over the time scales involved in enterprise wide infrastructure changes. Beware pressure to modify the plan or the design to accommodate one stakeholder (for example: one software vendor or service provider in a consortium; or an internal stakeholder such as one business unit) at the expense of the overall design. Similarly, over the timescale of a typical infrastructure project, new versions of the core software and hardware products that are being deployed will inevitably be released. You have to have a clear plan of how and when you will adopt these new releases, by allowing for “technology refresh” activities at suitable intervals.

Bottom line: Once the design is signed off, resist the temptation to adopt a new version or service pack, unless there’s a very clear need for some functionality to overcome a major problem.

Listen to the vendor. They know what they’re talking about (most of the time).
At this year’s IAM Summit in London, Gartner Analyst Perry Carpenter pointed out that failing to listen to advice from the vendor and/or systems integrator will in most cases be a mistake. The vendors and their partners have implemented their solution many times. Sometimes, it worked and sometimes it didn’t work so well. It’s worth capitalising on their experience.

This is in fact a double-edged sword, which cuts all the way back to the solution selection phase of the project. Each vendor designs and builds their product to deliver a defined set of use cases in a particular way. During product evaluation ensuring that the actual process needs of the project match the use cases the vendor can perform against is the best way of avoiding the “Sure we can make it do that, but the product wasn’t really architected that way” response later.

Aligned to their product architecture (which mirrors the use cases the vendor has designed for), each vendor will have developed a logical deployment architecture. In fact one major IAM vendor embodies that notion in their “Deployment Playbook”. This is a standard design which embodies all the best practices that that vendor’s professional services consultants have learned over many projects. The vendor estimates risk in terms of deviation from the deployment playbook and costs services accordingly.

Bottom line: Consider the use cases that need to be satisfied during the selection phase and select a vendor that closely aligns with those. During deployment, the closer you can then stay to the chosen vendor’s logical architecture, then the more likely it is that the deployment will be successful.

Beware Showstoppers.
When considering the risks attached to an infrastructure project, it becomes clear that some risks, if they occur, will force the project to be abandoned. The likelihood of running into these risks is exacerbated by the typically long time frame of infrastructure projects. For example, you’re planning a 3 year project built on LAMP (Linux, Apache, MySQL and PHP) and at the same time the Enterprise Architecture Board is planning a strategic switch to ASP/.NET in 12 months time. These risks can’t be addressed within your project, so they have to be treated as assumptions (you assume that they won’t come about) and are “owned” at a higher level in the organisation.

Bottom line: Be sure that the governance arrangements for your project are adequate to ensure that the impact to your project will be considered by the decision makers and also that you have a channel to “escalate” if a project assumption should prove false.

Frequently deliver in small increments and prioritise by value returned.
Implementing a new piece of IT infrastructure, whether for security management, or service management or something else, inevitably takes a long time. It’s a well-know truism that you should plan for the whole of the organisation’s strategic planning horizon (typically 3-5 years) and deliver within the budget cycle (typically 1 year).

Experience has shown however that projects are viewed as being more successful if they deliver value and return on investment in a number of small, regular, and incremental builds. The logic for this is twofold. First, by making regular deliveries into production, the Business can see real value from the project in the shortest possible time. The second reason is more to do with hedging your bets. The completion date for a project is generally derived from the critical path. So, provided nothing goes wrong with any activity on the critical path (which by definition have little to no slack in their “required by” dates) then the project will complete on time.

In reality, the range of possible completion dates for the project as a whole is very wide (with the outside estimate typically 150-200% greater than the shortest duration). Projects which overrun face the risk of being cancelled before completion. By planning to deliver multiple increments, with the greatest business value (and the highest risk) embodied in the earliest increments, then if the project is cancelled early, there is still a working infrastructure, delivering the majority of the benefit to the business. The increments that get cancelled probably contain the “bells and whistles”.

Bottom line: Deliver key use cases first and make regular deliveries of additional functionality, to ensure that the Business can see the value of continuing.

Infrastructure projects can and of course do succeed in delivering value to the Business. But, to achieve this, you need to put a lot of effort into programme management and in particular into publicising you project and its successes to the Business. Above all, keep in mind that just because it’s infrastructure, doesn’t mean that it’s all about IT. Remember that people and processes are involved too.

Very pleased to be accepting contributions from my old colleague Tom Mellor on ThinkingString. Tom has spent more time at the pointy and unpleasant end of large scale, technology related infrastructure projects than most people I know.

Tom will be writing about risk management, infrastructure and information security, how to successfully implement infrastructure projects, and no doubt a few other things aside. See here for a short bio on Tom.

Every so often the inbox holds a pleasant surprise, and so it did today upon returning from London (spending some time with PR firm Ogilvy to muse on the meaning and relevance of “sustainability” to businesses). The Institute of Industry Analyst Relations (IIAR) have just published the first part of their annual survey results, looking at the relative influence of the various IA houses, as well as that of individual analysts. The full survey results for 2009 are available here on the IIAR website.

The nice surprise was that this writer was voted as the second most important analyst in the “GreenIT/Sustainability” space, behind Simon Mingay of Gartner, and ahead of Dave Metcalf of Verdantix (a boutique IA house specialising exclusively on GreenIT). Congratulations and well done to both Simon and Dave; it is great to be bracketed by such great individuals - the thorn between two roses perhaps.

While some will say that “green” is done - yesterday’s news - the coming year holds some crucial turning points in setting the appropriate direction and pace for carbon cap and trade, while the price of (petroleum derived) continues to get attention as the concept of peak oil supplies moves ever more to the centre of mainstream media consciousness. We might well be done with the delicate washing of green that characterised 2007/2008, but the heavy lifting of enacting corporate change is yet to begin in earnest.

Unravelling the complexity of that challenge, and doing so without hype or spin continues to be the mantra for this industry watcher. Thanks for listening, and I hope that one or two things I’ve said this year have made sense to someone.

Fittingly the news (as reported here) that the UK government is to push the use of high speed rail over the use of short haul aircraft for travel within the UK comes to me via a copy of The Guardian from the nice man seated opposite me in seat 29, en route to Edinburgh. We sit here in a little threesome of macbooks, the newspaper man, his colleague and I, with only a niggling worry at the back of the mind that there is only one 240v socket to share between us. The other two macbooks being the newer it is likely that my battery will run out sooner, giving me “first come, first serve” ownership rights over the electricity nipple. Perhaps the only time that a short(er) battery life gives any sort of advantage.

The preferential use of rail over air for passengers, and over road for long haul freight has been a long term interest for this author. Perhaps a legacy of being birthed in the rail town of Crewe, and being descended from a family with the stains of coal dust, diesel, and points grease deeply embedded in the pores. My father recently retired from his position as General Manager of Invensys Rail Division’s Asian operations, based in Bangkok, after a lifelong career in the industry of rail infrastructure internationally working for Westinghouse Brake and Signal (now a division in the conglomerate Invensys). Both of my grandfathers worked as boilermakers in the Crewe train yards, and my mother was a computer operator for British Rail in the 1960s. No trainspotter me, but I hold no distain for the concept of long distance steel wheeling and will now happily eschew the opportunity to doff my shoes and stand in line to be body-rayed at Heathrow.

The UK Governments newly found support for rail is a welcome change from years of neglect, and billions of pounds of subsidies and countless examples of planning support for more carbon intensive travel options, especially flying. The Royal Borough of Windsor and Maidenhead continue their legal challenge to the previously granted approval for a 3rd Heathrow runway even as transport secretary Lord Adonis reportedly states that “switching 46 million domestic air passengers a year to … rail is manifestly in the public interest”.

Interlude - just noticed that the curved girders supporting the roof over the platforms at York is attractively pierced with little star shaped cutouts.

Those 46 million passengers will only choose rail over anything else if the price is right (not I would argue, necessarily cheaper), while the service and experience meets or exceeds that to had in car or in the air. The provision of positive customer service experiences must also extend beyond the actual journey to include the planning, booking and ticketing; the transfers between the starting and end points and the relevant stations; and the numerous peripheral steps in between. The latter by the way, is a euphemism for “shopping opportunities”. Much effort has been made to create a sense and reality of “joined-up” services when flying. Ironically the Heathrow Express rail service provides a more seamless travel experience for air travellers starting or continuing their journeys into the capital than many long distance rail passengers might expect to find. Not only is there a morass of overlapping and uncoordinated rail services in the UK, operated by a mess of privatised and public companies, there is generally very little integration between rail and other transport modalities.

For passengers, the challenges of navigating between services - finding the connecting train for example - is hardly assisted at present to anywhere the degree that a potential air traveller might enjoy. It is impossible for instance to access a single application or internet hosted service from a handheld device and be provided with real time information on services throughout the duration of a multi-hop journey. Considering the availability and accuracy of GPS based location services on modern smartphones it is difficult to believe that an mash-up application can’t be developed that would not only pull together all the details of a travel booking, but could also guide the traveller to the correct platform for the next connecting service too.

Meanwhile, it is not just 46 million passengers who ought to encouraged into modern rolling stock, it is also long distance freight. Mile for mile, rail is most energy efficient method for hauling bulk goods, especially heavy produce. The pressure group Freight on Rail states that each bulk freight train can take the load equivalent of fifty HGVs off the roads. HGV drivers will twitchily reach for the keys for their big rigs all the while threatening rolling protests and road blockages at any suggestion of a concerted effort to switch bulk haulage (back) to rail, but the fact remains that shuttling the goods they carry by rail between distribution points emits far less GHGs than the fleet of HGVs required to do the same job would emit. Freight on Rail reports that 26% of the UK’s emissions can be attributed to road transport of goods.

A resurrection of the UK rail network is more than just rolling stock, routes and encouraging passengers and cartons alike onto the tracks. It is also about urban planning. Rail is an infrastructure at both local and national levels. Towns, transport interchanges and other peripheral infrastructure elements need to be planned with the idea that rail is a preferred transport modality. Rail infrastructure is long lasting and immovable once installed and so new urban developments, and redevelopment of existing towns etc need to flex a little to best accommodate their presence and encourage the use of the supplied services. Such ideas fly in the face of the open market free-for-all that characterises post-Thatcher Britain, however perhaps in these market interventionist times we may find the political and public will for a more planned approach now, with the goal of a better service and environment for all in the years ahead.

Last minute addendum: if this reaction by the airline industry is anything to go by, Adonis’s announcement might just have some legs.

At school, I was taught that “mankind consumes two types of resources; renewable resources and non renewable resources”. Vague memories come to me of that being a core aspect of the early stages of either the economics curriculum or that of what was fuzzily called “Social Sciences”. The latter subject embraced everything from geography to politics to society, and if memory serves me was led for a while by one of the more interesting teachers to have chalked the blackboards during my formative years. I seem to recall that a number of prepubescent young ladies found the subject of renewable anything utterly engrossing as long as it was explained by a certain foppishly haired Social Science teacher.

Anywhere, there you have it, we have a group of important people (mankind, one presumes the woman were off doing things like cooking the latest Margaret Fulton pavlova recipe) doing the important things they are destined to do (consume stuff) while the world sits there doing exactly what it ought to do (provide resources for the consuming of). Furthermore, the world either provided all those resources as a one-off (gold, diamonds, hit singles by The Vapors), or in the form of an almost magical cut-and-come-again manner (trees, water, foodstuffs, The Magic Pudding. Thus enlightened a classroom full of eager eyed students were that little bit readier to be sent out to play their parts in the great circle of consumption and commerce that is modern life.

Except for one little oddity: oil.

Oil, which logic dictates ought to be classified as a non-renewable resource has thus far been treated as a renewable. Oil supplies have truly been treated as though they are the Magic Pudding energy supply. However, given that the source of oil is what you get when you compost prehistoric algal blooms for a really long time, under conditions of heat and pressure it stands to reason that oil must be a non-renewable resource. Finite algae = finite algal bloom derived product. QED.

Meanwhile, oil literally powers the engines of commerce, while being the feedstock for diverse products from fertilisers to plastics. The history of the 20th century, and the conflicts and problems of the 21st could not more intimately connected with the history and realities of oil production then they are. We are literally living in an oil based society.

Oil’s status as a non-renewable resource, combined with its unique role as the foundation for society’s structure and everyday actions means that we must ensure that we have a plan for the eventual decline of supply. Now if that eventual decline was a long time off, say 100+ years from now, then we would still have enough breathing space to engineer a switch away from using this resource the way we do today (notwithstanding the fact of oil’s role as principle AGHG pollutant - but climate change is a whole other issue). But if a material decline in supply levels were to be only a short time away, say between 10 and 30 years, then good governance would dictate that humanity ought to be applying some of that unique ability to forward plan that is said to differentiate Homo Sapiens from the rest of the animal kingdom. In short, the urgency with which we take action to seek alternatives to oil ought to dictated by how long it is until oil supplies materially decline.

Back in the 1950’s the “science” of calculating just when an individual oil producing field’s production rate will begin to decline was formulated by M. King Hubbert. Hubbert’s seminal work resulted in the concept of what has come to known as “Hubbert’s Peak” - referring to the point at which an oil field’s production peaks and then begins to decline. I’ve written at length on the science and history of Hubbert’s peak here, and here (latter link opens a PDF which provides an introduction to the concept of peak oil). However the fact that we might be approaching the decline in worldwide production capacity in the near term rather than the long term has continued to be treated as a fringe theory by much of the mainstream, and certainly by the markets.

However the Chairman of the International Energy Agency Dr Fatih Birol is an individual one would hardly label as “fringe” or as being an individual prone to conspiracy theories. Therefore his statements as published in UK newspaper The Indepedent are of the “sit up a little straighter and pay attention” variety.

Dr. Birol is quoted as saying “One day we will run out of oil, it is not today or tomorrow, but one day we will run out of oil and we have to leave oil before oil leaves us, and we have to prepare ourselves for that day. The earlier we start, the better, because all of our economic and social system is based on oil, so to change from that will take a lot of time and a lot of money and we should take this issue very seriously,”

How seriously?

The IEA Chairman’s statements come on the back of the agency updating its calculations regarding the health of known oil fields, their remaining capacity, and the potential for there to be significant reserves yet to be found. The IEA recently updated its estimate of the rate of decline for production from 3.7% per year to 6.7% decline per year. That means two things; firstly that the rate of decline is increasing, which would tend to indicate that we are at or near the peak point already (maybe just before, maybe just after the peak). And secondly it means that for oil production capacity to remain steady, we need to find new supplies equal to the capacity being removed from the system through the very natural phenomena of individual oil field decline - at a rate of 6.7% per year. Meanwhile, the global demand for oil holds steady and is forecast to grow as emerging economies such as India and China ramp up their needs.

Business as usual just doesn’t seem to make a lot of sense in such circumstances.

Which is why it is both refreshing to see Dr. Birol’s statements being made in the mainstream press. It is also very concerning that 24 hours later it was all as if nothing ever happened. Which perhaps just goes to show that Homo Sapiens might not be that good at forward planning after all. I am betting that there is not a single organisation I will speak to in the coming 12 months that will have flagged this issue as being one that is fundamental to the question of its business strategy, looking forward to the decades ahead. I await the pleasant surprise of a contrary experience. Meanwhile, its back to the fringes of conspiracy theory. At least while there I will have the good company of Dr. Birol, Jeremy Legget, Matthew Simmons and a whole host more.