Houston, don’t get complacent in the energy game

Houston has plenty of resources to maintain its status as the global energy capital for years to come, but it can hardly rest on its laurels in the face of tough competition, according to panelists at an event this morning.

The city has a deep trove of expertise in oil and gas exploration and refining technology and operations that will continue to be called on as global energy demand continues to grow, said Robert Pease, president and CEO of refiner Motiva Enterprises.

“But if we want to lead going forward we have to lead in conventional oil and gas, in unconventional oil and gas and renewables,” Pease said.

Turning current success into future success isn’t easy, added George Greanias, president and CEO of Houston METRO, the city’s public transportation authority.

“I call it the Washington Avenue Conundrum,” Greanias said, referring to the stretch of street west of downtown that has become a hub of restaurants and bars in a relatively short period of time.

“That just happened, but the question of how we can we make something like it happen is something of a mystery,” he said.

The panel, organized by the Center for Houston’s Future in conjunction with the Shell Eco-Marathon at downtown’s Discovery Green this weekend, pondered the question “Will Houston remain the Energy Capital of the world?”

Roksan Okan-Vick, executive director of the Houston Parks Board, stressed the importance of making Houston the kind of city that attracts people for its physical amenities – an idea the community has been slow to embrace in the past.

But by taking an existing resource – the 10 major bayous that wind through the city – and seeing them as more than “little muddy ditches” that should be cemented in, Okan-Vick says the city could create green spaces that connect the city.

“We could turn them into green, beautiful fingers,” Okan-Vick said, which would let someone ride a bike all the way from one of the largest ports in the country, the Houston Ship Channel, to prime bird-watching spots to the west of town.

Houston isn’t usually thought of as a place that creates new innovations, panelists said, although there have been plenty of ground-breaking developments here, including the birth of the nanotech industry.

Rather, Houston has excelled at taking innovations and economically transforming them, adapting niche products and new technologies to mass-market business applications, said Praveen Kumar, a finance professor at the University of Houston and director of the Global Energy Management Institute.

“Here is where we can differentiate ourselves, as the place that has developed the specialized workforce to take those ideas to the next level,” Kumar said.

Given their histories, Rice University and UH likely won’t be able to catch up to major research universities like Stanford or others by way of the federal research grant model, Kumar said.

“But what if they develop a new funding model based on partnering with corporations?” he asked, noting that many of the large energy companies have the funds and the in-house product and technology development in place.

Walter Ulrich, president and CEO of the Houston Technology Center, said he was personally optimistic about the city’s prospects for remaining on top of the energy game. From the audience he ticked off a list of reasons including the industrial heft of the Ship Channel and the entrepreneurial nature of the energy industry’s wildcatters.

But Greanias warned against complacency.

“I would imagine 50 years ago if you had gone to the Automobile Maker’s Club of Detroit and asked them if they would be the car capital in the future you would have heard a similar list. But nothing is inscribed in stone,” he said. “There are a lot of places where they’re hungrier than us for this business, and we need to be very cognizant that these things [such as NASA, the Texas Medical Center and the Ship Channel] aren’t here just because they happened, but because we chose to put them here.”

Kumar concurred.

“We’re at a cusp where the technology and the business models are destructive enough that we can’t fall asleep at the switch,” Kumar said. “The long-term equilibrium is about to shift.”