Thursday, July 19, 2007

Our boom, Houston's other mission control, a top-tier blog-savvy town, videos and more

Time again to cover the smaller miscellaneous items. Been coming across a lot of these lately.
  • Houston tops the residential construction rankings (thanks to Hugh for the link)
  • Why is Houston booming, you might ask? Well, the most recent issue of Fortune magazine contains a clue: 6 of the top 10 Global 500 are energy companies, all with their largest U.S. employment base in Houston. Three more of those top 10 make cars that use the fuel created by the other six. And where are all those cars going, burning that gas? You guessed it: #1 is Wal-Mart - which also happens to be one of the largest employers in Houston, and has one of its largest distribution centers at the Port of Houston.
  • A graphic in Business Week's cover story on global youth culture on the web shows Houston to be a top-tier blog-savvy town, ahead of cities like Seattle, Denver, San Francisco, Portland, and even cross-state rivals Dallas and Austin. As far as I can tell, it's all me (just kidding! ;-)
  • A blog post about high-rise bland "condo sprawl"
  • NYT story on personalized traffic alerts, with some specifics about Houston's other, lesser known, mission control:
"In pitching its reports, whether on radio or pager, to broadcasters and motorists alike, Westwood One emphasizes its process for checking and rechecking its findings. Its version of Mission Control is in Houston, in a gleaming skyscraper down the road from NASA’s. From a room crammed with flat-panel television and computer screens, four fact checkers continually scan databases for outdated information and browbeat affiliates around the country to update drivers."

One concluding note: Thanks to a generous invitation from Ron Woliver, I saw David Crossley make a very good presentation to the Rotary Club today on improving Houston's quality of life as we grow tremendously over the next 30 years. I'd say we agree on most of the types of things that would be good for Houston - I'm just more "encouragement, markets and facilitation" vs. a more activist government intervention. Oh, and we also differ a bit on transportation: I believe the aggressive expansion of our freeway network (as outlined in the 2035 plan) is a more practical mobility strategy than transit, which I think has realistic limits on ridership in a dispersed, decentralized city like Houston with very pedestrian-hostile weather much of the year.

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At 1:34 AM, July 20, 2007, Blogger Jonathan Horak said...

In response to your "Why is Houston booming, you might ask?" item: how does Houston fare when oil production peaks? I haven't seen this idea addressed on your blog so far and am interested in reading your thoughts.

After living the first eighteen years of my life in Houston and having visited my immediate family ever since, my experiences in the "Energy Capital of the World" lead me to conclude that the city would suffer heavily in a post-peak oil world.

At 8:17 AM, July 20, 2007, Blogger Tory Gattis said...

You have to remember several things about peak oil. First, if it does happen, that's when prices really go through the roof - growing worldwide demand will outstrip supply more and more. That makes Houston even more of a boomtown, even with the slow, steady decline in worldwide production. That price spike makes all sorts of new options economic, including the Saudia-Arabia sized tar sands of Canada (already very economic at $70), and the also-Saudia-Arabia-sized oil shale of the Rockies. Then there are all the gas and coal to liquids possibilities, and the US has one of the largest coal reserves in the world.

Those prices will also bring many more alternative energy sources to the fore: wind, solar, biofuels, etc. - and you have to hope that the Houston energy companies will diversify their portfolio of sources. It just makes good business sense, and most of them *are* doing it, with the notable exception of Exxon.

So, net, I have high confidence that Houston will not only prosper, but adapt.

At 10:09 AM, July 20, 2007, Anonymous Anonymous said...


I disagree that inevesting in alternative energy sources is necessarily good business. All the major alternative sources you reference have crippling flaws that prevent them from really breaking out, even with the current high cost of fuel. It would be less risky to wait for superior technologies to come out of the pipeline than settle for the current sad crop, IMO.

However, I do think you are correct about Houston adapting. Major problems in the petroleum industry would have a serious negative impact on Houston, but it wouldn't be the doomsday scenario -- not anymore. Moreover, even the tech-based "creative class" type cities can suffer if they cluster too much of a certain industry (just look at Portland's unemployment rate during the tech-bust of the late 90's -- the highest in the nation). I don't think it's any different with Houston.

At 12:29 PM, July 20, 2007, Blogger Unknown said...

Tory, you do your credibility no favors when you slip in comments such as, "if it happens" when discussing topics like "Peak Oil". Even the pro-oil Bush Administration is studying and planning for Peak Oil. The debate is centered on when it occurs, as opposed to if.

That said, Peak Oil is not the date when oil runs out (which would be a catastrophe worldwide, not just Houston). It is merely the date when half the oil has been produced. I agree that as oil prices rise oil companies will prosper. Their operations will become MORE important, not less.

I agree with owen that the tar sands and oil sands have big problems in replacing oil. Like ethanol, they require huge amounts of water and energy to produce, making it problematic for widespread use. However, since oil is such a good energy source, virtually all alternatives can be shown to be lesser alternatives to oil...that is why oil is so important.

At 3:01 PM, July 20, 2007, Blogger Tory Gattis said...

Well, yes, I suppose in a way it's 'when' not 'if' - but some of the debate covers a 50-year range, which is pretty huge. And who knows what our energy technology will be by then. It's actually possible we will completely convert to a different energy tech base before we hit peak oil (how about this?: super-high efficiency solar on your roof pulls hydrogen off your water line and fuels your car in the garage with it). In that case, there would still be a peak, but it would be demand based, not supply constrained, which is completely different from what people mean when they say "peak oil".

Others have pointed out that each new price bump up makes new, hard-to-reach sources economic (like super deep water) - again prolonging the actual supply peak to some indeterminate time in the future.

I think Peak Oil is a real strong possibility, but I also think marketplace economics will sort it out just fine.

At 12:11 AM, July 21, 2007, Anonymous Anonymous said...

Houston, is not just about the oil and gas industries. The seaport is growing in a good way and should continue doing so for a long time. There are many good paying jobs associated with the shipping bussiness. The Medical Center has been investing in facilities and new research. Houston could be a significant center of the wind industry business, especially if the coastal and offshore wind plants get built. ( The one in Kennedy County along the south Texas coast should start construction in 2008).

At 1:40 PM, July 21, 2007, Anonymous Anonymous said...

A couple of points:

1. If anyone demonstrates that the world is on the downslope for total petrolelum liquids productions, integrated oil companies will make more money not less. I would wager that the portfolio of Peak Oiler Matt Simmons is weighted very heavily in and oil services companies.

2. Tory, I take your point about Houston being an employment center for the integrated oils, but I believe that Chevron still has more associates in San Ramon, CA than it does here in H-Town. Although when you add up the 8,000 Chevron associates in town with all of the KBR, SLB, HAL, etc. contractors working on Chevron's behalf, the employment footprint is enormous.

At 2:59 PM, July 21, 2007, Blogger Tory Gattis said...

I actually met a guy from Chevron recently at my lunch table for Kotkin's OppU speech. I'm pretty sure he told me that Chevron's employment has shifted heavily towards Houston over the last few years since housing got insane in the Bay Area, and has surpassed San Ramon. They've recently signed some very big leases downtown, including the former Enron building.

At 10:40 AM, July 22, 2007, Anonymous Anonymous said...

"...and most of them *are* doing it, with the notable exception of Exxon."

Yes they *are*, too. I don't know why everyone thinks that ExxonMobil is such a bad guy in the world. Must be the negative press exposure all the time. It may be because they don't really have a public relations department. They just ignore the critics and get it done.
They have more going on in alternative energy than anyone would know, and probably wouldn't believe it anyway. They also put alot of investments money in companies who *are* doing it.

At 11:07 AM, July 22, 2007, Blogger Tory Gattis said...

Well, I hope that's the case. I saw an interview or article recently on the CEO of Exxon, and he said something to the effect of, "We're good at oil and gas, and that's going to be our focus, and we're not going to mess around with this other stuff we don't know much about and aren't good at." He was specifically separating himself from the Shells and BPs of the world that are experimenting with wind, biofuels, etc.

At 3:29 PM, July 22, 2007, Blogger Gary said...

Exxon-Mobil: "It may be because they don't really have a public relations department. They just ignore the critics and get it done."

Wow, that's funny.

At 12:17 PM, July 23, 2007, Anonymous Anonymous said...

Gary said...
"Wow, that's funny."

Yeah, it's hilarious. And how?

Anyway, are experimenting with wind, biofuels, etc. is exactly what they're doing. Trust me.

At 8:44 AM, May 27, 2008, Anonymous Anonymous said...

Good Job!


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