Author Archives: Tim Newman

Don’t mention the flaw!

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Once upon a time I was posted to a department in an oil company which dealt with the early-stage designs of new installations, much of which was geared towards providing enough information for a cost estimate to be carried out. To a rough order of magnitude, the cost of a new offshore installation (either floating or fixed to the seabed) can be estimated from its weight. Keeping things simple, the weight of an offshore facility comprises Equipment Weight, Piping Weight, Structural Weight, and Others. If you have enough data, it is theoretically possible to work out the total weight of a new offshore installation by taking just the Equipment Weight and applying various ratios from similar, existing facilities. Most large engineering companies do this in order to obtain order-of-magnitude weights and cost estimates, but it is very much a finger-in-the-air approach which, at the early stages of a project, is fine.

The problem with my new department was they did the equivalent of dividing 11.3 by 3.4 and writing the answer as 3.32352941. Any GCSE science or maths teacher will tell you the answer to any calculation cannot be more accurate than the initial input data. But when we did estimates using data with an accuracy of ± 30%, we’d make comparisons of estimates that were within 10% of each other and propose weight savings of 5%. If you think it’s just journalists who are innumerate, be aware there are engineers with the same affliction working in large oil companies.

Then things got a whole lot worse. Weight ratios apply to offshore facilities because they are designed as a single unit relatively unaffected by their location (I’m talking topsides or floaters here, not the jackets or other support structures). I’m simplifying massively, but the point is that the weights of floating and other offshore facilities are not primarily driven by where they are installed. By contrast, the cost and complexity of onshore installations is enormously impacted by topography and geotechnical conditions under the soil. As you can imagine, building a facility on flat, firm ground is a bit easier than doing so on the side of a granite mountain or in a marsh. Civil engineering accounts for approximately 30-40% of the cost of constructing an onshore oil and gas installation, mainly grading the site, bringing in aggregate and compacting, and building the vast underground networks of pipes and cables needed to run the thing. This is why the first things you do when you’re thinking about building an onshore plant is the topographical and geotechnical survey; it’s sort of hard to do anything without it.

But I worked with very clever people, and they came up with a way of estimating the costs of an onshore facility regardless of where it was located. Insofar as topography went we could just assume it was flat, and soil conditions could be ignored or data from a project on another continent used instead. That soil conditions can vary dramatically across a hundred metres didn’t seem to matter. Furthermore, we could use ratios to work out the weights like we did offshore. Now I spied a problem with this. Offshore, on a global basis, there is probably a relationship between Total Equipment Weight and Total Structural Weight; all equipment on such facilities is supported by structural steel, after all. But onshore equipment is generally placed on a concrete plinth sunk into the ground, the size of which is driven by the soil conditions and equipment weight. The structural steel supports some equipment and a lot of piping and cables, but it does a very different job to that on offshore facilities. In many instances, the structural steel around a piece of onshore equipment is negligible. In short, on an onshore plant there is no ratio from other facilities which can be used to estimate structural weight using equipment weight. But here were were, applying the same methodology as if it could.

Having some experience on onshore sites, I began to use my noggin a little. In one estimate, I ascertained that a vessel had no structural steel at all: it rested on its own legs and there was no maintainable valve on top which would need an access platform. But two managers queried this: they asked how the structural steel weight could be zero. I said it was because there is no structure associated with this vessel. They said this must be wrong, and I should apply a ratio of 30% vessel weight. So I asked them what structure they thought I was missing. They couldn’t say, but they told me to add the weight in, which came to several tonnes.

A little later, they got an intern with no post-graduate engineering experience to create a formal procedure for estimating the weights of onshore facilities, convinced that from such data the costs could be derived. They then passed it around all the engineers for comments. I noticed that it did not consider many components of the underground networks, which as I said comprises a huge portion of the costs. The most glaring omission was the firewater ring main, which is big, expensive, and common to all onshore oil and gas facilities. The reason this wasn’t included was because it would be designed “later”, which I found actually meant “nobody here knows anything about firewater ring mains so it’s best to pretend they don’t exist”.

I’d only been in the department a few weeks and I naively thought I’d be being helpful by pointing out, as I have done above, why this new methodology drawn up by the intern was fatally flawed. I drafted a comprehensive email with examples and explanations and sent it to my boss and the head of department, whose brainchild this new methodology was. A few days later I was called into an office where both of them were waiting and told to close the door. Their talk with me can be summarised as follows:

“We have read your email, but the decision has been made to adopt this methodology going forward. Your job is to follow it without asking questions.”

This was probably the first time it dawned on me that in many corporate departments results are meaningless, and all that matters is people obediently follow the process. I fought it for about a year, then just got with the program and pumped out absolute garbage which got wrapped up in more garbage and presented to senior management right up to the CEO. It didn’t take me long to work out whatever rubbish we were generating was not the basis on which decisions were getting made – the company wouldn’t be in business if that were the case – and the entire process, which cost millions of dollars, was merely to keep people employed. I once remarked in the wake of the oil price crash that if the company wanted to cut costs they could get rid of our entire department and employ a child to roll dice every time senior management wanted figures. That went down about as well as my critique of the estimation methodology.

The experience left me wondering how much of this sort of thing goes on in major corporations with names you’ve heard of. Quite a bit, would be my guess.

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Flags of their fathers

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I wrote recently about Somali-born Ilhan Omar, who no sooner was elected to the US Congress when she declared the majority of Americans were a problem that she intends to solve. My closing remarks were:

I’m sure there are lots of very good, principled arguments for allowing Ilhan Omar to run for Congress and then denounce Americans as white supremacists, just as I am sure there are sound reasons for allowing known jihadists to roam free in European capitals. But the question is, can a society which tolerates this survive?

Yesterday another newly-elected congresswoman, Rashida Tlaib, was causing a stir because she’d said in relation to Donald Trump “we’re gonna impeach the motherf****r.” The media has been going giddy about Tlaib since the midterms, mainly because along with Omar they are the first Muslim women elected to Congress. Unlike Omar, Tlaib was actually born in the US to Palestinian parents, which is why her mother turned up to her election celebration bearing a foreign flag:

It is odd that so-called conservatives are more concerned about Tlaib speaking like a Eminem (they are both from Detroit) than a brand-new congresswoman wrapping herself in a Palestinian flag and boasting to impeach a sitting, duly-elected president for no apparent reason. And as if people were unsure of her intentions, she made them abundantly clear a little later:


Americans and European liberals will see Tlaib’s election to Congress as a triumph of democracy, an embodiment of the American dream. A lot of other people will wonder what sort of experiment the Americans are running here, and exactly how it will end. One thing is for sure, it’s hard to imagine this happening in societies which stick around for a while.

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The Desert Sun Podcast #008

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My guest this week is Andy, who recently finished two years in Japan teaching English. We discuss this, and various other Asian countries as well.

You can listen to it on iTunes here, Player FM here, download it here, or listen on the blog by clicking the link below:

If you liked this podcast, please consider supporting me on my Patreon page.

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How to pass exams in subjects you don’t understand

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Last semester on my MBA I studied five main subjects, one of which was Quantitative Business Methods (QBM). It quickly became apparent this consisted entirely of statistical analyses, of the sort I don’t think I’d done before. I studied statistics as part of maths A-level and I’m sure I must have done some during my engineering degree, but this definitely seemed new to me.

At the beginning, I couldn’t work out why anyone in business would need to carry out statistical analyses of the sort we were being taught, which was mainly about finding correlations and associations in data. I was rather surprised to discover it was possible to find associations in sets of qualitative data; until then I’d assumed you could only do so with quantitative data. Anyway, the chap teaching us was exceptionally knowledgeable about statistics and appeared to do advanced analyses for fun. He took us deep into the theory, and pretty soon stuff like this was appearing on the board:

I was never very good at maths and when it came to statistics I was very average indeed (did you see what I did there?), so a lot of this confused me. I reckon by the end I grasped about 60% of the theory, and that involved me dredging my memory banks for stuff I’d learned 20 years before. But many of my colleagues had no such background and struggled like hell; one had done a bachelors in tourism, which I’m reasonably sure doesn’t involve giant sigmas surrounded by numbers.

It wasn’t until three-quarters of the way through the semester that I cracked it. I’ve written before about my engineering degree and how I didn’t understand half of what the lecturer said, and the secret is that doesn’t matter. With most engineering subjects there’s a theory part and a practical part. Take for instance the concept of second moment of area. This is the basis for why I-beams make such good structural members: the stress in the beam under load is inversely proportional to its second moment of area. The maths behind the second moment of area disappeared from my understanding decades ago (assuming it was ever there) but the principle behind the second moment of area and the importance of the I-beam cross-section remained forever.

It would have been possible for the lecturer to simply say an I-beam is better than a rectangular hollow section just because, but that wouldn’t have made us very good engineers because we’d have no confidence in the statement. By showing us the mathematical theory behind it, we had that confidence even if we didn’t fully understand the theory. The exam, like many others on engineering subjects, tested our knowledge of the theory as well as its application. To pass the engineering exams it was important to figure out which parts of the theory you were going to be tested on, and how to apply it to the practical part of the question. You did this by asking the lecturer what would be on the exam, getting hold of past papers, and speaking to those in the year above. In other words, most of us got good (enough) at passing the exams and only a handful of the super-geniuses actually understood everything. This was sufficient to produce engineers who can work in industry, where knowledge of the theory isn’t required.

So I figured out that’s what was going on with this QBM course. The professor could easily have said if P(F<=f) is less than 0.05 then there is an association and we could thereafter apply that to datasets in future, but we’d have no confidence in it. So we got taught the theory, and this scared the hell out of everyone (including me in places). But towards the end it became apparent that we were only going to be tested on the application, i.e. how to generate descriptive statistics from a dataset and interpret them rather than the underlying theory, which made it an awful lot easier. From there, it was just a matter of boiling it down into those bits which are really important and disregarding the rest.

Some of my colleagues looked at me as if I was some sort of sorcerer, so I explained that I don’t understand it any more than they do, I just know how to apply the theory in a practical application and what numbers to look for when interpreting the results. I spent two hours before the exam giving several of my fellow students a crash-course in how to pass it, mainly by telling them what was important and what they could ignore. I’m not sure how they got on, but I passed with a good mark and I hope they did too.

Funnily enough, when I started reading the academic papers in preparation for my dissertation I realised the regression analyses being used to determine correlations and associations were those I’d just been taught in my QBM course, so I was actually able to understand the numerical results to some degree. Without that, I probably wouldn’t have any idea how they’d gone about it. Which is why why they teach it, of course. It’s been a while since I’ve learned a new discipline, and it feels rather good.

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Hens Solo

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I’ve written before about women of a certain age traveling alone:

It’s something they do well into middle-age and perhaps beyond, usually going to exotic locations where they talk in lofty terms about spirituality (while scoffing at anything which even hints at formal religion). There must be a pretty big market for this: reasonably wealthy women who have nothing else to do during their annual holidays but jet off somewhere exotic for a few weeks or months of “finding themselves”.

Via Little Billy Ockham, I find this article:

Like most self-assured young women with a global take on life, Indian-born, American-educated yoga teacher, media personality and Columbia Business School MBA graduate Ira Trivedi, 30, doesn’t think twice about going away on her own.

That fast-moving ratchet sound you can hear is a number of boxes being ticked in quick succession.

The first journey I made truly alone was when I was about 23. I’d just finished business school in the US and was finally properly independent – financially, mentally, emotionally. I spent a month in Bali by myself – no friends, no family, no work reason to be there. Just me by myself doing some soul searching.

Okay, there’s a pic of her in a bikini on the beach, and she’s pretty cute. If she wanted company, I’m sure she could find it if she took a taxi into Kuta and walked up to a bunch of Queenslanders in NRL singlets and flip-flops. Let’s be honest, a half-decent looking 23 year old woman is going to enjoy herself no matter where she goes, provided she doesn’t run into jihadists in the Atlas Mountains. But she’s now 30:

I’ve come back to Bali regularly since then for self-contemplation, when I need time to be on my own.

If she’s taking the same holidays at 30 that she did at 23 fresh out of college, it doesn’t sound as though she’s developed much as a person. Are there any relationships to speak of?

A spot of solo soul-searching a la Trivedi’s near annual ritual is now one of the most popular travel trends for 2019, particularly among women over 55 looking to travel either alone or in small groups of like-minded people.

The title of the article is “Why more women are choosing to travel alone?” I think that may be begging the question somewhat.

So popular in fact that the Australian high-end tour operator Captain’s Choice has, for the first time in its near three-decade history, put a “women only” trip on its 2019 itinerary – to be led by Trivedi.

Titled Harmony in the Himalayas, the 10-day journey in September includes five days at luxurious tented Chamba Camp Thiksey in Ladakh, northern India, during which time the group of no more than 20 women will spend “five days at altitude, nourishing mind, body and soul”, according to the marketing spiel.

Women only, eh? Was that on purpose, or was it just that no men signed up?

“Our solo travellers are really important to us…” says Lou Tandy, a director at Captain’s Choice.”

Why?

Priced from $16,850 per person…

Ah.

Roughly one in four Americans said they would travel solo in 2018, according to a survey of 2300 people conducted in late 2017 by US marketing firm MMGY Global, which specialises in the travel and hospitality industries. And while that attitude was as prevalent among Millennials as it was among Baby Boomers, women were the clear trend drivers across all age groups.

Well, yes. What we’re seeing is the result of social engineering which has produced millions of middle-aged women who have impressive job titles and lots of money but are bereft of spiritual happiness, the sort which is more traditionally supplied by a partner, family, or going to church. How many of these women shelling out almost seventeen grand on “nourishing mind, body and soul” with a bunch of other women in Ladakh would prefer to be on a beach holiday with a man with whom they have a stable, loving relationship?

Google Trends also shows interest in solo travel has grown steadily over the past 10 years, but reports increased searches for “female solo travel” have only gained traction since 2013. The average monthly search volume for the term “solo female travel” grew by 52 per cent between 2016 and 2017.

As I said in my original post:

I’ve noticed you don’t see many middle-aged men going “travelling”, it’s nearly always women, and always alone. One possible answer for the latter is all their friends are tied-down with family and can’t take the time away, but most middle-aged single women have a whole rugby team who are in the same situation, so why don’t they go in a group? I suspect the reason they go on holiday alone and the reason they are single are one and the same: they’re either nuts or simply not much fun to be around.

What would be fun is seeing how many women on these group tours actually form lasting friendships with those they meet. I expect it’s very few.

And this amused (emphasis mine):

As for Trivedi, she’s looking forward to channelling plenty of lady power. “Women usually have the experience of little girl groups when we’re young; girls love to congregate,” she says. “As we get older, we lose that. Often we lose it to men, our partners – and then to children.

“So reconnecting to women you don’t know when you’re older is very powerful. Sharing stories is powerful and there’s no judgment. It’s about connectivity.”

This sounds for all the world like a holiday where divorced women come to bitch about their ex-husbands. Little wonder no men signed up.

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Assurance française

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So this is how screwed up insurance is in France. I bought my car insurance through BNP Paribas, and like all good insurance sellers they increase the premiums each year hoping you won’t notice. If you do notice and query it, they shrug their shoulders and say “that’s just the market”. Sometimes they’ll even throw in some nonsense such as “but there have been more thefts this year”, as if the doozy you’re talking to would know that.

Anyway, after 4 years of this I got fed up and decided to change. Changing insurance companies in France is rather difficult, made deliberately so by the insurance companies. It has got a bit easier recently thanks to the Hamon Law which aimed at doing away with anti-competitive practices. However, it’s still not straight forward. When you sign up with the new company they contact your old company and cancel your agreement with them, but they then ask you to obtain two documents from your old company:

– An information statement listing any accidents the driver’s had while insured, or lack thereof.

– Confirmation the insurance has been cancelled, or the reason why the request was refused.

I immediately asked for these from my previous insurer, who didn’t bother replying. I asked BNP Paribas, who shrugged their shoulders. I dug around and found that unless you send the request by recorded delivery, the insurance companies refuse to comply. I also found out BNP contracts their insurance to an outfit called AVANSSUR, a subsidiary of Axa, whose address is at 48 Rue Carnot. My new insurance company – Direct Assurance – told me I should ask them for my documents, and they have a legal obligation to provide them within 15 days. Unless they come tomorrow, which is unlikely, I will not be getting them in that time period. So I went to advise Direct Assurance that I’m having no luck getting these documents, and somehow I discover they are also a subsidiary of Axa, their address is 48 Rue Carnot, and:

AVANSSUR is a subsidiary of AXA that operates under the Direct Assurance brand.

In other words, I’ve saved myself 30% on my insurance by switching contracts within the same company and I’m waiting for them to send me documents which they are asking to see. What makes it more amusing is that, in order for the new company to cancel your contract with the old one, you give them the policy number and all the details. So they know they’re dealing with themselves, but I’m still getting emails reminding me I’ve not sent my documents and advising I write to them tout de suite.

Welcome to France. Happy New Year, folks!

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Graph Trouble

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Maybe my readers can help me out here. I’m researching the link between gender diversity and company performance, and having read about 20 academic papers on the subject I’m now looking at studies various companies have done. Currently I’m on this one (.pdf) from Credit Suisse, in which they evaluate 3,400 companies across 10 sectors in 40 countries including 27,000 CEOs and senior executives. This graph on page 25 is confusing me:

If you were to plot the share prices of two random companies, you’d not expect them to follow the same path. If you were to plot the share prices of two companies in the same industrial sector exposed to much the same market forces, you’d perhaps expect to see them follow similar paths. But how likely is it that you take 3,400 companies across 10 sectors and 40 countries, divide them into baskets depending on the number of women in senior management, plot the share prices and they all have roughly the same shape?

Given the only differentiation between the baskets is the number of women in senior management, I’d have expected each line to be of a different shape, reflecting the combined fortunes of each individual company in each sector in each country. Is this a complete fudge, or am I missing something here?

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The Desert Sun Podcast #007

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I’m a bit fed up with writing at the moment, so I decided to do a very short solo podcast on my problem with mainstream media journalists on Twitter.

You can listen to it on iTunes here, Player FM here, download it here, or listen on the blog by clicking the link below:

If you liked this podcast, please consider supporting me on my Patreon page.

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The language of ignorance

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This has to be one of the most ignorant tweets I’ve seen:

Culture and language are linked only trivially, eh? Where to even begin?

It’s funny how little the metropolitcan elites actually know about the world around them, despite their supposed global outlook.

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One rule for thee…

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Back in the early 2000s, Italy, Portugal, and Greece were being chastised and threatened with fines by the European Commission for breaking the Stability and Growth Pact, which aimed to limit the fiscal deficit of member states’ budget to 3% of GDP. Then something happened around 2001 which caused the French and Germans to blow their budgets and go on a borrowing spree, and all of a sudden the Stability and Growth Pact didn’t matter (see this chart for historical deficits). It became quite obvious that EU rules are only to be enforced against certain countries, and exceptions made when it came to France and Germany; those less charitable thought it quite obvious that the EU was run for the primary benefit of those two member states.

Fast forward 17 years and we had the European Commission refusing to approve Italy’s budget because it breaks the Stability and Growth Pact. Then a short time later French president Emmanuel Macron, with his back to the wall facing the might of the gilets jaunes, decided to throw an €8bn – €10bn bung at them in the hope of saving his presidency. France’s budget was already perilously close to the 3% limit, and this pushed it over the edge. So the European Commission is going to take action, right?

Heh:

The EU will accept a French budget deficit above the EU’s 3 percent ceiling in 2018 “as a one-time exception,” Budget Commissioner Günther Oettinger said in an interview published Thursday.

Now there’s a surprise, eh? If you follow the link and translate from the German, you find out why:

President Macron has lost authority with his budget for 2019, which exceeds the deficit limit of three percent. But he remains a strong supporter of the European Union.

Of course. The rules don’t matter provided you are France or Germany and you are a strong supporter of the EU. What a wonderful club. I can’t think why Britain voted to leave.

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