Monday, March 25, 2019

LA's costly transit failure, tech founder picks Houston over Austin, Houston is a food lover's paradise, and more

This week's items:
"Q. Houston has made a big push lately - really, yet another push - to become more attractive to start ups and technology businesses. What do you think of that effort? 
A. You know I've been all over the world I think Houston is a really special city. It's a great place to live. It's a great place to raise a family. And I think that is important. If you look at the places that people are starting to flock to now - entrepreneurs are fleeing San Francisco and the Bay Area there - they're going to places the great quality of life. And I would put Houston above Austin there.
Houston’s a much more dynamic city. And now I think we have better food, better arts, better music. Austin is great but I think Houston is under-appreciated. And personally, I choose it."
"For a number of reasons — Houston’s position between Gulf seafood and Texas produce, its long history of overlapping immigrant cultures, and an ever-expanding vastness that has enabled those migrant cultures to settle and thrive — the city has one of the most exciting and undiscovered food cultures in the country. In a state of old traditions, Houston is a city of newcomers. It’s also now the most diverse metropolitan area in the United States.
From the looks of Houston — its vast, featureless expanse pockmarked by potholes and parking lots — it’d be easy to mistake it for a whole lot of nothing. But Space City turns out to be a universe unto itself, and the families who have settled here are serving daily lessons in how a city of the future might look — and taste."

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Monday, March 18, 2019

MaX Lanes win, #1 for millennials, traffic better than you think, our resilient culture, NYT eats here, and more

A lot of new items this week:
"By contrast, the biggest winner is Houston, a metro area that many planners and urban theorists regard with contempt. The Bayou City gained nearly 15,000 millennials net last year, while other big gainers included Dallas–Fort Worth and Austin, which gained 12,700 and 9,000, respectively. Last year, according to a Texas realtors report, a net 22,000 Californians moved to the Lone Star State."
"I want to call your attention to a new (not yet published) paper on the subject by researchers from Cornell University and McGill University. “A Comprehensive Welfare Impact Analysis for Road Expansion Projects” uses transportation data from the Dallas-Ft. Worth metro area to compare, quantitatively, the effects of four possible highway expansion options (in addition to doing nothing): adding a general purpose (GP) lane, adding a high-occupancy vehicle (HOV) lane, adding a priced ETL (electronic toll lane), or converting all lanes to conventional toll lanes. The priced ETL ranked highest in both regional economic impact and improving system-wide travel time, and was judged to produce the greatest increase in overall social welfare."
Finally, if you're looking for a high-impact charity to support, I was recently introduced to the Prison Entrepreneurship Program, which does an absolutely amazing job mentoring Texas prisoners back into successful lives after prison (check out the results here).  If you want to learn more, check out one of their events. Hat tip to Jay, one of their top volunteers.

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Wednesday, March 06, 2019

Houston energy salaries vs. tech and others

This week's guest post is from Oscar Slotboom:
Tuesday the Wall Street Journal published an interactive chart with the most recent median salary data as reported by publicly-traded U.S. companies.

It's a fascinating interactive tool, but most interesting is the amazingly high pay of the energy industry. Below is a screenshot where I added annotations of many energy firms with headquarters or large operations in Houston (click to enlarge)

The median salary of the energy industry is $115,700, vastly higher than the #2 industry technology, which comes in at $75,000. However, there is a strange cluster of very low paid jobs on the technology plot, maybe offshore jobs, which pushes the technology median lower. Nevertheless, the energy scatter is clearly well above the technology scatter and the finance scatter.

Of course, Houston is an energy industry hub and we have a high percentage of those high-paying energy jobs, with many large Houston employers clustering at the high end of the chart. Houston has achieved the holy grail of many employers with high pay, an affordable cost of living, and very large total employment at the high-paying firms with ExxonMobil, Anadarko, ConocoPhillips, Phillips 66, EOG Resources and Chevron.

Below is a tabular list of selected large firms in Houston and outside Houston

HoustonOutside Houston
Carrizo Oil & Gas $191,131 Facebook SV $240,430
Phillips 66 $170,988 Broadcom SV $202,915
Exxon Mobil $161,562 Alphabet (Google) SV $197,274
Anadarko $160,251 Netflix SV $183,304
ConocoPhillips $158,943 Microsoft Seattle $167,689
EOG Resources $146,016 Twitter SF $161,860
Chevron $137,849 Goldman Sachs NYC $135,165

Other energy firms with large blue-collar field workforces and large professional staff in Houston also come in above the tech average, with Halliburton at $79,636 and Schlumberger at $75,134.

Looking at the charts, we can see that only the most upper-tier tech firms equal or exceed Houston's large energy employers, and finance firms in the high-paying range appear to be smaller boutique firms which have lower numbers of employees compared to big firms.

While this is an excellent position for Houston, there is also cause for concern since Houston's high-paying cluster is entirely oil and gas, and therefore vulnerable to advancing green technology and government action. The Green New Deal promoted by Alexandria Ocasio-Cortez seeks to make electricity generation 100% zero-emission and "[overhaul] transportation systems in the United States to eliminate pollution and greenhouse gas emissions from the transportation sector as much as is technologically feasible" (ref). This would destroy demand for fossil fuel energy in the U.S. and do very serious damage to the existing energy industry and Houston's high-paying job base. "New energy" jobs in wind, solar and energy storage really don't offer much hope. The wind power industry is already well-established and is mostly foreign with only one U.S. player, General Electric. Solar panel manufacturing is totally dominated by China, and China is positioning to totally dominate battery manufacturing.

So, this all leads to the conclusion that, from the economic and jobs perspective, it is in Houston's best interest for the oil and gas industry to have the longest possible remaining longevity. Maybe everyone with a stake in Houston's high-paying energy industry (companies, shareholders, State of Texas) should be more actively looking at ways for oil and gas to exist in a future with environmentalists holding more political power and battery prices dropping. For example, more participation in research for carbon capture technology.

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