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.”

7 Comments

  1. bob

    ” the kind of city that attracts people for its physical amenities ” No words have ever been more true. We can start by building a decent public transportation system. We need to think about what would make people want to live here other than “just a job”. We should also think about replacing our lost theme park. Taking Astroworld away was just another in a string of unfortunate occurances that seem to cement the attitude that Houston is not worthy of tourists further in people’s minds. I also believe it was a huge blow for us to lose the shuttle because they wanted to put it in a place that generated more tourist traffic. I mean, we will never be on par with L.A. or New York as far as the tourism industry goes but we should at least try. I think improving our transportation infrastructure would be a tremendous start.

    #1
  2. Art Vandeley

    With a President who has udder disdain for the US Oil and Gas industry and a city Mayor that has done zero for Houston’s business sector….. no doubt that Houston’s reign as the oil and gas mecca could come to an end. More Houston jobs will go bye-bye before we’re rid of the current anti-business / free market mentality of which our current leaders posses.

    #2
  3. Castilow

    I like the way you think bob

    #3
  4. Slim Chance

    The proof of Houston as the oil capital is in the air. We all can smell it.

    #4
  5. Champion4estMom

    The refusal of the current group of energy (oil & gas) executives and the Republican Party to embrace alternative energy will cost Houston the title of the Energy Capital of the World. People like Art Vandeley above are a prime example. Oil & Gas are not the future they are the present. Period.

    Bob above has another valid point, until we make Houston a desirable, livable destination with state of the art mass transit and top notch public schools it will never be anything but just another city in Texas. FYI whether you want to admit it or not, Texas IS the laughing stock of the nation and they all look down their noses at our backwards ways.

    #5
  6. Steve in Cypress

    Kumar is right.

    Regional businesses are the largest consumers of the two primary outputs of our universities: educated students and research. But the source of this important output is at risk. As a result of budget cuts at the state and Federal levels, publically funded universities are losing funding for research, operations, and financial aid. Area businesses must make up the difference in research funding and student financial aid at all public universities in the Houston area (UH, UH-Downtown, UH-Clearlake, and Texas Southern) if they wish to maintain and improve the research and educational output of these universities.

    Commercial support of higher education is no longer optional. People and ideas are the lifeblood of commerce. Consequently, it is imperative that regional businesses partner with all area universities to ensure that the flow of educated students and innovation is not interrupted.

    #6
  7. Tom Fowler

    Art Vandeley:
    Let me play Devil’s advocate here: generally Texas and Houston government has been pretty business friendly, particularly in that is has relatively few taxes/regulations compared to many many other states and cities. Texans generally say they want small government, but isn’t it a bit hard to have both small government and then government that provides all sorts of incentives to industry? I thought the absence of government seemed to be the great gift to business in Houston/Texas.
    I’d be interested in hearing thoughts on this notion.

    #7