Monday, June 23, 2008

Houston: Silicon Valley of Global Energy Industry

In a stagnant economy, an oil star shines in Texas.
To find a hot spot where soaring oil and commodity prices and the booming economies of the developing world are keeping cash registers ringing and construction crews fully employed, you don't have to trek to Dubai or Moscow. You need travel only as far as Houston. In May, the unemployment rate in the nation's sixth-largest metropolitan area was a measly 3.8%. In the past year, Houston-based companies, which include 26 Fortune 500 firms, added 71,000 jobs to their payrolls (see chart above of employment growth in Houston vs. the country).

Houston has become a sort of Silicon Valley for the global energy industry. "There's hardly any oil and gas production in a 40-mile radius of Houston," says Mayor Bill White, a former energy executive, as he held court in the city's charming Art Deco city hall.

"It's the knowledge that has concentrated here that is driving things." In 1981, the oil and gas industry was a domestic, blue-collar one. Today it's an international, white-collar one. Oil companies, wind-energy startups, consulting geologists, and software developers comprise what John Hofmeister, who is retiring in July as president of Shell Oil Co., calls "this mass aggregation of people who know what they're doing in the energy world."

Urban cowboy? Think suburban geek. Houston has 70,000 engineers and architects (a concentration 60% higher than is typical for the United States). The oil boom and weak dollar are boosting demand for their services, and engineering and construction firms like KBR and Fluor are applying their expertise to power plants and sewage facilities around the world.

~Daniel Gross in Slate.com

6 Comments:

At 6/24/2008 5:32 AM, Blogger OBloodyHell said...

Yeah, but the downside is, you have to live in Houston. Never been there, but I've heard the summers are, uh, "not particularly pleasant".

(old joke):

Texas Man, visiting NYC: (to the long distance operator) Hi, honey, I need to know the cost of that long distance call I just made to Chicago...
LDO: Yes, Sir. One moment, please.... (pause)... That call cost five dollars and thirty-five cents.
Texas Man: Five dollars and thirty-five cents?!? Why, darlin', back home in Texas, I can call Hell and back for only twenty-five cents
LDO: Yes, Sir, but you must remember -- in Texas, that's a local call.

:o)

.

 
At 6/24/2008 8:08 AM, Anonymous Anonymous said...

Pssh, you'd think it was like living on the sun the way people talk about it. Seriously, Houston really isn't that bad since this new-fangled A/C thing was invented.

I go from my house to my car to my office without ever going outside should I choose, so it works just fine. Houston has an extensive tunnel system downtown to beat the heat.

 
At 6/24/2008 8:11 AM, Anonymous bob wright said...

Why are oil companies constantly beat up in the media and by most left-of-center politicians?

The high oil prices are providing good, high-paying jobs to U.S. citizens - something all politicians claim they want.

The more drilling and exploration by U.S. oil companies, the more U.S. citizens are put to work.

The shift to electric and hybrid cars will only outsource U.S. jobs to China and Korea- the primary manufacturing locations of the high tech batteries used in the new propulsion systems.

Why isn't the "oil rig workers union" demanding the U.S. government help protect their workers?

Steel workers are to be protected, autoworkers are to be protected, garment industry workers are to be protected, plumbers, electricians and carpenters are to be protected.

Where's the love for oil workers?

 
At 6/24/2008 10:43 AM, Anonymous Anonymous said...

I had to grow up in the Houston area--still lacks a zoning ordinance. Much of the city's north and east sides remain ugly, with horrible air pollution from nearby Pasa("stinka")dena and Deer Park creeping hundreds of miles north to Dallas; Oklahoma; Arkansas.
Houston's more a Louisiana/Mississippi-minded place than the rest of Texas--Texas outside of Houston is more attractive; more firmly Texas Proud.
Katrina could have easily hit "Bayou City" with severe flooding and fatalities (That luck went 300 miles east to 'Nawlins.')
Texas remains very low wage, with little or no benefits/ protection to employees or the unemployed. Houston, more than other cities, is a magnet to those with little education, and immigrant/transient/criminal histories than other better educated, higher income, more physically attractive communities.
Texans are not social nor political revolutionaries-they don't want outsiders to make improvments or changes--not to "MESS" with Texas.
When the next Katrina hits Houston, dont expect it nor its people to change longstanding, haphazard, shortsighted ways.

 
At 6/24/2008 12:45 PM, Blogger Anuj said...

Anonymous at 10:43am: your comment of Houston being "a magnet to those with little education" must be a self reflection.

It is however, completely inaccurate.

Here's another recently published take: http://www.kiplinger.com/features/archives/2008/05/2008-best-city-houston.html

I was born/raised in Houston, but now reside in Manhattan. Each time I travel back, I see continued growth and improved quality of life in many parts of the city / suburbs.

In fact, you need only compare the downtown of today vs. the downtown of 10 years ago to see the improvements. While there's still much poverty that needs to be addressed, there's plenty of opportunity. Hence the low, and falling, unemployment rate.

 
At 6/24/2008 1:53 PM, Anonymous Anonymous said...

I'm one of the recent transplants TO the Houston area as a result directly of the Energy Boom and its consolidation of expertise. It really is THE place to be if you are going to be in the energy business.

As for the zoning, yeah I thought that was weird, and as someone who grew up north of Mason-Dixon, I always figured TX for a belt-buckle state (ie. people wearing buckles shaped like the state). I swore that I'd be issued a gun as soon as I crossed the state line. My wife thought it would all be intolerant rednecks and illegal Mexicans. And while those types certainly exist, they by no means seem to predominate the demographics. I've found a surprising amount of diversity, both ethnically and politically. There are a wide range of incomes and lifestyles. Its like any big city in those ways, and I think the increasing number of transplants is only helping that.

Funny thing is, cost of living is actually comparable or cheaper than most cities in the midwest, which are usually the cheapest places to live. What does suck is the traffic, although if you're working Eastern markets, its not really an issue.

 

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