Houston, the centre of Texas’s energy industry, recognises that it has a problem. The Greater Houston Partnership, the region’s business advocacy organisation, has appointed a committee, the Energy Collaborative, with the express purpose of sustaining Houston’s status as the energy capital of the world. Lane Sloan, director of the University of Houston’s Strategic Energy Alliance, was its second chairman.
“We’re in the middle of a phase change,” he said, just before stepping down at the beginning of this year. “Before the industrial revolution, wood was the main source of energy. Then came coal. Hydrocarbons have dominated for the past 100 years, but they now comprise only about 55 per cent of the overall energy supply. Energy demand is expected to double by 2050, and yet oil and gas are becoming increasingly harder to come by.”
Alternative sources of energy are needed to meet demand and, concurrently, to hold on to the city’s reputation. “The idea behind perpetuating Houston as the energy capital has been perpetuating its technological development,” Sloan says. So Texas has become the biggest producer of wind energy in the US, and is building a portfolio of other technologies involving solar, biofuels, coal and carbon dioxide capture. Its rush into technology has been made easier by the energy infrastructure already here. There are more than a half dozen top-notch universities, each of which features energy courses in its curriculum. But, says Sloan: “There is no one, single answer.”
Almost 50 per cent of the Houston region’s $325bn economy is energy related. To put that in perspective, Houston has what amounts to the world’s 21st largest economy – one so big it was the only US city invited to the World Economic Forum to represent its business community at a summit last year in China. On Thusday, Houston is due to host a summit on energy at which the US presidential candidates will discuss energy issues.
“We can slice the data a lot of different ways,” says Jeff Moseley, president and chief executive of the Greater Houston Partnership. “The bottom line seems to be that while the number of billionaires from Texas may be shrinking, companies here are doing very well and can contribute to its future.” Look no further than “Opportunity Houston”, a marketing effort to raise $40m over the next five years to create 600,000 jobs, $60bn in capital investment and $120bn in foreign trade, increasing to $225bn during the next 10 years. There are more than 3,600 energy companies in Houston to help meet these targets.
Yet the clock is ticking at all energy companies in the US, where the average worker is 54 and approaching retirement. Houston is desperate to attract more young people into the sector, dispatching oil executives to speak to school children and, in a more aggressive push, opening the Academy of Petroleum Exploration and Production Technology at Milby High School this year. It is the first of four public high-school learning centres focusing on the petroleum industry. At the inauguration, Mayor Bill White said: “Investing in minds is the way Houston will continue to be one of America’s great cities for opportunity and growth, especially in the petroleum industry.”
Even as some companies, or their bosses, leave Houston, others continue to be drawn to it for the businesses – and the people – who are here. “There is certainly an historic tie to doing business on a handshake that goes back to the wildcatter days,” says Moseley from the Greater Houston Partnership. Kenneth Mackie, president of Rotech Subsea, an exploration company, says that establishing headquarters in Houston is integral to international success. “You have to be here. Houston is at the heart of the world’s oil industry.”
UPDATE: The New York Times has a feature on Texas becoming America's largest wind power generating state, with even T. Boone Pickens looking to put up the world's largest wind farm there.