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Colloquy: Antifragility: Can this industry thrive with disorder?

Written by  Tuesday, 01 January 2013 00:00
rachNina M. Rach

COLLOQUY: Editor's Column

Despite the widespread pop-culture interpretation of the Mayan calendar, the world did not end in an apocalypse on 21 December 2012, just as the Y2K date bug did not cause utilities and other critical infrastructure to fail on 1 January 2000. Scaremongering predicted disorder, but the ensuing paranoia led to Y2K preparation that apparently resolved date coding issues in an orderly way.

Engineering in the oil & gas industry generally benefits from predictable circumstances. Project planning and implementation are based on in-depth studies and well-reasoned forecasts, subject to policies, ordinances, laws, and ultimately, contracts. It may be impossible to foresee every possibility, but we rationally prepare for the most likely and probable scenarios. We build in safety factors and contingencies for unexpected and emergency situations. The most successful designs – and companies – are efficient, robust and flexible.

The multidisciplinary, 2012 book by Nassim Nicholas Taleb, Antifragile – Things that Gain from Disorder, suggests a different perspective for success – that we should deliberately build systems that can benefit from stress. When we remove stress from a system, it can weaken and become fragile. Taleb’s 2007 best-seller, The Black Swan, focused on improbable, unexpected events, but didn’t offer solutions for the world’s unpredictability and volatility. In Antifragile, Taleb says that ‘black swan’ events are likely to increase, due to globalization and other factors, and that we should plan for unpredictable, highly consequential events by making our systems ‘antifragile’. Although he doesn’t cite any examples from the petroleum industry, many of the concepts are applicable.

The concept of antifragility is that certain things can improve and even grow stronger when subjected to stress or turmoil.

Fragility, durability

Fragility ‘is the quality of things that are vulnerable to volatility’, Taleb writes. ‘The opposite of fragile . . . isn’t robust or sturdy or resilient – things with these qualities are simply difficult to break. To deal with black swans, we instead need things that gain from volatility, variability, stress and disorder . . . this crucial quality is “antifragile”. We have been fragilizing . . . almost everything [by] suppressing randomness and volatility.’

Increasing complexity and interconnectedness can lead to more vulnerable systems, subject to failure through myriad pathways – the trick is to figure out the fragility of a system. ‘Not seeing a tsunami or an economic event coming is excusable; building something fragile to them is not,’ says Taleb. This industry favors cost-effective, durable solutions, characterized by their ability to exist without significant deterioration; they are not easily altered or broken, they are not fragile or tenuous. But antifragility is beyond robust; the aggressiveness is driven by paranoia, pressing forward toward a big reward, while minimizing exposure to risk.

But the pursuit of greater efficiency can introduce fragility. Lean production practices and supply chains remove all slack from the system and may optimize flow, but they remove the operating safety net and increase risk.

Disorder

On a global scale or in the geologic time-frame, it’s hard to grasp the notion of disorder. The laws of physics dictate movement and change. Order is inherent, even at the subatomic level. ‘Disorder’ is a human-scale notion, usually meaning confusion or lack of an intelligible or discernible pattern: randomness. The concept of gaining from disorder, in the engineering realm, could be something as simple as creative solutions arising from basic (non-directed) research. There is much potential in randomness. Blue-sky thinking is not always pragmatic, but is often fresh, new and original.

‘Knowledge . . . in complex domains inhibits research,’ Taleb says, and we lose the potential of randomness when researchers are too specialized, studying increasingly narrow fields. Major oil companies have whittled away their R&D facilities, in favor of directed research at universities.

Among those poised to gain from the fear of disorder are transactional attorneys (solicitors) who craft contracts addressing as many contingencies as possible, in an attempt to remove uncertainty.

Hormesis, Eustress

‘What doesn’t kill us makes us stronger,’ wrote Friedrich Nietzsche.

The concept of antifragility is that certain things can improve and even grow stronger when subjected to stress or turmoil. Taleb mentions hormesis – a generally favorable biological response to low exposures of toxin or other stressors – to address historical improvements in safety. Tragic disasters such as the Titanic (1912), Piper Alpha explosion (1988), sinking of the P-36 platform (2001), and the Macondo blowout (2010) have led to step-changes in offshore designs and operational practices.

‘Eustress’ (good stress) refers to a positive response one has to a stressor. Some teams work well under stress and will rise to a challenge.

Likewise, ‘necessity is the mother of invention,’ meaning difficult situations encourage novel solutions. When there’s a critical need, someone will think of a way to solve it. From the Industrial Revolution to the Manhattan Project, to the advances in petroleum engineering and marine architecture, solutions have always arisen.

When news broke of the 2010 Copiapó mining accident in Chile, this industry contributed crucial technology, including rigs from the US and Canada. Management at Center Rock, in Berlin, Pennsylvania, knew they had the tools that could help rescue the Chilean miners. So did the owners of Drillers Supply in Cypress, Texas and Antofagosta, Chile, who coordinated the logistics so that Center Rock could successfully enlarge the borehole for the rescue capsule.

We need to be prepared for what we can’t predict – and become antifragile. OE

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