Report: Export boom will boost Houston job growth

HOUSTON — Houston is on the verge of a two-pronged “export boom” that could help create more than 55,000 new energy sector jobs, according to a study scheduled for release Tuesday.

The overhaul in Mexico’s energy sector, along with the growth of liquefied natural gas and chemical plants, will mean new jobs in Houston as companies ship more products abroad.

“The oil and gas industry always like to talk about what’s the next frontier,” said Patrick Jankowski, vice president of research for the Greater Houston Partnership, which produced the report. “Mexico is the next frontier. Chemicals is the next frontier.”

Mexico’s energy future

Mexico is hammering out the details of changes it made to its constitution last year that, for the first time in decades, allow foreign oil gas companies to tap into its resources. Until now, only the state-owned energy company, Petroleos Mexicanos, was allowed to do that, but its production has been declining.

Pemex lacks the financing and technical expertise to tap commercial volumes from shale reserves and deep water, so Mexico has moved to share some of its oil and gas profits with foreigners in order to reach resources that might otherwise be inaccessible.

The report says Houston already exports $19.3 billion in industrial machinery — a category that includes oil field equipment — around the globe. It projects a 15 percent increase in those exports, spurred by an energy resurgence in Mexico, would support 28,574 jobs in the Houston area.

Moving fuel: Energy pushes Houston to nation’s top exporter

A similar-percentage boost in iron and steel products — material Mexico will need to develop pipeline infrastructure — could support 2,824 new jobs, according to the study.

“As we go into Mexico, there’s going to be great opportunities,” said Lori Vetters, senior vice president and regional commercial executive for Texas at HSBC Bank, which sponsored the study. “We have the technology and expertise to help them reverse the decline in their production forecasts. That in itself will require Texas companies to make more of the things they’re already making and ship them as that market opens.”

Gulf Coast chemical boom

The other part of the export boom will come from the billions of dollars in chemical plant construction slated for the region. A boom in unconventional production has give the United States an abundance of cheap natural gas, which the chemical sector uses for fuel and feedstock.

In the United States, plastics building block ethylene is made from ethane, a natural gas liquid. But in other parts of the world, ethylene is made from naphtha, an oil-based component that’s much more expensive.

As a result, there’s been a rush to build U.S. chemical facilities to take advantage of that price difference.

Workers needed: Labor shortage threatens to bust shale boom

The chemical industry has announced more than $105 billion worth of projects in the U.S., according to the American Chemistry Council, and many are located along the Gulf Coast.
The Houston area exports $16.8 billion in chemicals. The researchers found that a 15 percent increase in chemical exports would support 23,787 more jobs.

New jobs

Notably, those numbers only include jobs generated directly by the increase in exports and not from the construction of the new facilities.

The report also didn’t quantify job creation tied to liquefied natural gas export plants under development in Brazoria County and just across the Louisiana state line in Cameron Parish.

The study warns that the numbers are only estimates.

Potential restrictions on hydraulic fracturing, one of the technologies that has driven the natural gas production boom, or other factors causing gas prices to rise, could weaken the export boom, the report says.

According to data from the U.S. Department of Commerce, the Houston metro area exported $110.3 billion of goods in 2012, the latest year for which data is available. That figure — the highest among U.S. metro regions — more than doubled since 2006.

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