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What bothers me is that in the long run, Houston will likely have to fight harder and harder just to keep up with the likes of Dallas and Atlanta. We are heavily dependent on one industry and that industry seems destined to be a much weaker foundation for our economy than it was in the late twentieth century, with the increasing willingness of the public to punish carbon and with the diffusion of talent around the world (the fact that we are still the nexus of energy know-how is a relic of our giant mid-twentieth century lead over the rest of the world in education and industry; we no longer have that lead and thus we cannot expect to remain for long the place that everyone turns to for expertise).

We are barely keeping up with Dallas and Atlanta in the midst of an oil boom; what happens if there is a bust? I can't think of any major industry where a bust could greatly hurt either of those two cities but if there is a bust (or gradual long-term decline) in the energy industry, Houston is in trouble. Atlanta has positioned itself as the corporate capital of the Southeast just as Chicago is for the Midwest, the city where big companies cluster, slowly sucking everything from other cities. Dallas seems to be doing this for the South Central region: if you take away energy, what corporate relocations has Houston been able to attract in the last few years? What has Dallas attracted?

If the domestic energy industry slowly dies (as every other heavy industry in America seems to be dying) and Dallas consolidates its position as regional capital, Houston could end up seeing the fate of other industrial cities that were not the capital of their region: Philadelphia, Cleveland, Detroit, etc. I'm hoping one of you can convince me that I'm wrong.

I see your concerns, but you have to understand Houston is the ENERGY Capital not just about Oil. We will always need energy. What a lot of people don't realize is that Houston is more than just oil. Oil is a big part of it, but the area is changing and oil will become of less importance to Houston's economy as it continues to diversify. I am very confident in Houston's future. Its in the sunbelt where everybody wants to live. I just saw on World News tonight a table full of people that just moved to Houston got jobs and are excited about their future in the city. One man and his wife just moved down from Detroit and said they call friends up there and its well below freezing while in Houston its in the comfortable 60s+.

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We are the Energy Capital for a reason, and unless the world decides to go hippie and live in the forest, we'll always need some form of Energy.

Don't be so gloomy.

There was a time when railroad companies placed a critical importance upon revenues from shipping crude oil; then oil pipelines and they lost out in a big way. Technology passed them by.

There is nothing to keep the same thing from happening to oil and gas in some plausible and possibly near future. Nor is there any especially compelling reason to believe that either oil companies will lead the transition to alternate technologies or that their research and production efforts would be based in Houston.

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Houston has so many Fortune 500 corporations that call it home, but most are oil related. I do not doubt Houston can get non-oil related companies, but will we go and get them? Being an energy strong economy is not bad it is when oil is no longer the main source of energy, and the only energy you produce is oil is when it gets bad. When oil is no longer the main soure of energy then what is Houston going to do? Out of our top 10 Fortune 500 Companies in Houston only three are non-oil related. How diversefied is Houston in the Energy sector is the main question because as humans we are going to need energy, but it will not always be oil. I just don't think our energy sector is diversifed like some say. When oil is making porfits like never before, I just don't see why ConocoPhilips and Exxon are going to diversife itself. Oil is the king of energy and when the world is going to need more oil then it ever did before in the coming years, why would would they leave their cash crop to see what wind energy is going to do?

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C'mon. 50% of HAIF is based on doom and gloom. Consider it part of the charm. Imagine what this place would've been like back in 1985.

"WAAAAAH! We're turning into Detroit!"

So it goes.

Yeah, but this may be a HAIF record for "doom and gloom" posting.

http://www.siteselection.com/issues/2009/mar/Top-Metros/

Big Oil has long been the big money maker in Houston, but the largest city in Texas lured capital from many other industries in 2008, enough to capture the No. 1 metropolitan area ranking for corporate facility projects from Site Selection.

With 179 corporate real estate deals last year, the 5.7-million-resident Houston area unseated three-year incumbent Chicago to take home the coveted honor. Texas' second largest market, Dallas-Fort Worth, finished No. 2 with 156 projects, while Chicago came in third with 138.

"The dominant economic development story of the year was Houston's dramatic success in job creation," says Jeff Moseley, president and CEO of the Greater Houston Partnership. "From November 2007 to November 2008, Houston was the number one job creator in the entire U.S., according to the BLS [bureau of Labor Statistics]."

Houston's 2008 performance is even more remarkable considering that, in 2007, the city ranked fourth among all large U.S. metros, trailing Chicago, Cincinnati and St. Louis.

The doom and gloom that the world is passing us by occurred AFTER we led the country in job creation, came in 2nd in population growth, and led the country corporate real estate deals last year. Hell, Atlanta isn't even on that list. Shouldn't you at least wait until we fall out of 1st place before you worry that "Houston will likely have to fight harder and harder just to keep up with the likes of Dallas and Atlanta"? Isn't this a bit like UNC fans worrying right after they win the NCAAs that "Duke might win next year"?

Enjoy the spoils of success for an hour or two, will ya?

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Houston has so many Fortune 500 corporations that call it home, but most are oil related. I do not doubt Houston can get non-oil related companies, but will we go and get them? Being an energy strong economy is not bad it is when oil is no longer the main source of energy, and the only energy you produce is oil is when it gets bad. When oil is no longer the main soure of energy then what is Houston going to do? Out of our top 10 Fortune 500 Companies in Houston only three are non-oil related. How diversefied is Houston in the Energy sector is the main question because as humans we are going to need energy, but it will not always be oil. I just don't think our energy sector is diversifed like some say. When oil is making porfits like never before, I just don't see why ConocoPhilips and Exxon are going to diversife itself. Oil is the king of energy and when the world is going to need more oil then it ever did before in the coming years, why would would they leave their cash crop to see what wind energy is going to do?

Oh you bet they will diversify. They are planning it right now. No doubt they will ride oil as long as they can, but when the time is right they'll make whatever changes they need to, if they're being run by smart people. We're a couple decades out from this I think, but we'll see it in my lifetime.

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Houston has energy, health care, NASA, the port, a top-tier private research university (and hopefully a Tier 1 public one soon), a stronger downtown, and far more international flights, culture, and business. Dallas has more diversified companies, more tech, more domestic flights and companies, and no hurricanes (but also a bit of a water supply problem). Atlanta has some good universities and the world's best geographical location for logistics and flights, including the world's busiest airport (and also no hurricanes but a water supply problem). I think we'll all do just fine in our different niches, just as DC, NYC, and Boston do in the east, and San Diego, LA, and SF do in the west.

The oil companies have a responsibility to their shareholders not to die with any particular technology. They will aggressively get into whatever's next, and most already have, with the exception of Exxon.

I've also had a remarkable number of young college graduates tell me lately that Houston is a hotter destination for young talent than Dallas right now, with our more diverse, international, eclectic vibe/culture, including the restaurant scene.

Edited by ToryGattis
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Houston has energy, health care, NASA, the port, a top-tier private research university (and hopefully a Tier 1 public one soon), a stronger downtown, and far more international flights, culture, and business. Dallas has more diversified companies, more tech, more domestic flights and companies, and no hurricanes (but also a bit of a water supply problem). Atlanta has some good universities and the world's best geographical location for logistics and flights, including the world's busiest airport (and also no hurricanes but a water supply problem). I think we'll all do just fine in our different niches, just as DC, NYC, and Boston do in the east, and San Diego, LA, and SF do in the west.

The oil companies have a responsibility to their shareholders not to die with any particular technology. They will aggressively get into whatever's next, and most already have, with the exception of Exxon.

I've also had a remarkable number of young college graduates tell me lately that Houston is a hotter destination for young talent than Dallas right now, with our more diverse, international, eclectic vibe/culture, including the restaurant scene.

As a recent college grad, I can kind of attest to this. I wouldn't necessarily call Houston a hotter destination, but it seems like most of the people that graduated with good jobs ended up in Houston. People that really wanted to go to Dallas or ended up there were mainly girls and only a few actually had a solid job lined up. This means absolutely nothing about either city and which one is a better destination - it's just my observation. I am a native Houstonian who has plenty of time in Dallas and I love that city, too. The only thing that bothers me about my observation is that I am a single male, and I wish Houston would win over those females.

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It's funny... I had just got back from going to the grocery store to buy razor blades, because I am so deep in "doom and gloom" over Houston's future, when I turn on this forum to find all these great posts debating the concerns I brought up, and voila! I want to live again! Thank you HAIF! :D

But you still haven't convinced me. I did a tour of Detroit recently and was amazed to see the robust buildings and monuments from fifty years ago when it was the fourth largest city in America, had some of the largest (including THE largest) corporations in the world, and was a magnet for international culture with vibrant immigrant communities. It also had a university in its suburbs that, even today, is more important in the academic world than any Texas university. Fifty years later it is in ruins, largely because it was too dependent on one industry and couldn't stay afloat as that industry went down.

Here are the local companies that made the 2008 Fortune 500 list. Tell me how many you see that don't involve fossil fuels:

FORTUNE 500 COMPANIES HEADQUARTERED IN HOUSTON 2008

Company/Rank

Revenues

($000,000)

ConocoPhillips (5)

$178,558.0

Marathon Oil (36)

60,044.0

Sysco (70)

35,042.1

Enterprise GP Holdings (90)

26,713.8

Plains All American Pipeline

(121)

20,394.0

Anadarko (159)

15,916.0

Halliburton (167)

15,264.0

Continental Airlines (178)

14,232.0

Waste Management (199)

13,310.0

Knight (230)

11,505.7

Reliant Energy (237)

11,208.7

Baker Hughes (252)

10,428.2

Apache (262)

9,977.9

National Oilwell Varco (268)

$9,789.0

Centerpoint Energy (271)

9,623.0

KBR (284)

9,194.0

Smith International (302)

8,764.3

Enbridge Energy Partners (343)

7,282.6

Targa Resources (344)

7,269.7

Group 1 Automotive (379)

6,393.0

Frontier Oil (462)

5,188.7

BJ Services (482)

4,802.4

El Paso (486)

4,749.0

Spectra Energy (487)

4,742.0

Cameron International (490)

4,666.4

FMC Technologies (498)

4,638.

I see a food services company, a legacy airline, a garbage company, and a group of auto dealerships. I don't see a SINGLE non-energy corporate relocation from the past two decades. Now you may think that these energy companies will be strong forever and that we'll be just fine, but with progressive administrations promising to tax the carbon industry, with the steady drift of heavy industry of all types away from America, with the fact that hardly any of the world's major oil reserves exist in America anymore (our oil industry was formed when most of them did) and the rest of the globe is catching up with us in talent and expertise, I am not so optimistic.

Bottom line: We need to diversify, and right now when times are still good is our best opportunity to do so.

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So, your gripe on Houston is that we don't have enough non-energy Fortune 500 companies? But, your argument that Dallas is "beating" us is a BANK that isn't even listed in the Fortune 500 at all? That makes sense. :mellow:

And, while we're at it, can you explain to me why I should despair that Houston is full of reasonably healthy and profitable energy companies and not enough zombie BANKS? Am I missing something here? Are you jealous of Dallas and Atlanta because they've been hit harder by the financial collapse than we have? Do you miss the 80s? To use an internet term, WTF! :o

I'll take the possibility that oil may someday die over banking that already died any day.

Edited by RedScare
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But you still haven't convinced me. I did a tour of Detroit recently and was amazed to see the robust buildings and monuments from fifty years ago when it was the fourth largest city in America, had some of the largest (including THE largest) corporations in the world, and was a magnet for international culture with vibrant immigrant communities. It also had a university in its suburbs that, even today, is more important in the academic world than any Texas university. Fifty years later it is in ruins, largely because it was too dependent on one industry and couldn't stay afloat as that industry went down.

Now you may think that these energy companies will be strong forever and that we'll be just fine, but with progressive administrations promising to tax the carbon industry, with the steady drift of heavy industry of all types away from America, with the fact that hardly any of the world's major oil reserves exist in America anymore (our oil industry was formed when most of them did) and the rest of the globe is catching up with us in talent and expertise, I am not so optimistic.

Bottom line: We need to diversify, and right now when times are still good is our best opportunity to do so.

We have diversified and we continue to do so. Do you work for an energy company? Do you know anyone who works for one? Any of them at the executive level?

If the anwser is no, then you cannot justify what you have said.

No one can predict the future, but Houston's looks pretty bright. And if you disagree well observe Atlanta & Dallas whoop us in population, jobs, education, importance, whatever... We're doing damn fine, and if you cover your eyes and ears saying "laa laa laaa, I can't hear you" then we can't help you.

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The doom and gloom that the world is passing us by occurred AFTER we led the country in job creation, came in 2nd in population growth, and led the country corporate real estate deals last year. Hell, Atlanta isn't even on that list. Shouldn't you at least wait until we fall out of 1st place before you worry that "Houston will likely have to fight harder and harder just to keep up with the likes of Dallas and Atlanta"? Isn't this a bit like UNC fans worrying right after they win the NCAAs that "Duke might win next year"?

Enjoy the spoils of success for an hour or two, will ya?

The past is to be celebrated; the future is to be prepared for. Neither activity is mutually exclusive to the other.

The issues being pointed out may not weigh on regular joes in the immediate term, but they are a long-term concern, especially for investors in locally-based fixed assets, such as real estate. To the extent that Houston has issues with economic diversity, many investors get leery when evaluating our market. That's why the economic diversification of the 1990's was trumpeted so much by the Greater Houston Partnership in its promotional materials.

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I'm all for diversification. It's just prudent to have a diverse economic base. But I would like to point out that the U.S. cities that got propelled to top tier, world class status, usually did it on the back of one or two major blockbuster industries: NYC and finance, Chicago and manufacturing/trade (HQ of the midwest), SF/SV and tech, LA and entertainment+defense. Purely diversified cities usually have trouble breaking through to the top. The reason is not too hard to discern: as cities get bigger, they get some big problems and costs to go with that growth. If companies and people don't have a compelling reason to stay in that city (or come to it in the first place), they will disperse to the next set of hot midsize cities with lower costs and fewer problems (the Charlotte's, Austin's, San Antonio's, Raleigh-Durham's, and Denver's of the world). You need some compelling pull that keeps the growth up even in the face of those growing negatives. If it's not climate (like CA and FL), it's usually a big, important industry where you "have" to be there if you want to be a player, both as a company and a professional.

For Houston, that's energy, and we need to do everything possible to stay the capital of that industry, no matter how the technology shifts.

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Houston has energy, health care, NASA, the port, a top-tier private research university (and hopefully a Tier 1 public one soon), a stronger downtown, and far more international flights, culture, and business. Dallas has more diversified companies, more tech, more domestic flights and companies, and no hurricanes (but also a bit of a water supply problem). Atlanta has some good universities and the world's best geographical location for logistics and flights, including the world's busiest airport (and also no hurricanes but a water supply problem). I think we'll all do just fine in our different niches, just as DC, NYC, and Boston do in the east, and San Diego, LA, and SF do in the west.

Boston, San Diego, and San Francisco aren't exactly cities that we ought to aspire to. They're economically stagnant, and San Diego is like California's version of San Antonio.

Also, you left Detroit and Pittsburgh off your list.

I've also had a remarkable number of young college graduates tell me lately that Houston is a hotter destination for young talent than Dallas right now, with our more diverse, international, eclectic vibe/culture, including the restaurant scene.

Our service industry is not a measure of core employment; it is dependent on core employment. If we repeated 1986 for whatever reason, it goes away.

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I'm all for diversification. It's just prudent to have a diverse economic base. But I would like to point out that the U.S. cities that got propelled to top tier, world class status, usually did it on the back of one or two major blockbuster industries: NYC and finance, Chicago and manufacturing/trade (HQ of the midwest), SF/SV and tech, LA and entertainment+defense. Purely diversified cities usually have trouble breaking through to the top. The reason is not too hard to discern: as cities get bigger, they get some big problems and costs to go with that growth. If companies and people don't have a compelling reason to stay in that city (or come to it in the first place), they will disperse to the next set of hot midsize cities with lower costs and fewer problems (the Charlotte's, Austin's, San Antonio's, Raleigh-Durham's, and Denver's of the world). You need some compelling pull that keeps the growth up even in the face of those growing negatives. If it's not climate (like CA and FL), it's usually a big, important industry where you "have" to be there if you want to be a player, both as a company and a professional.

For Houston, that's energy, and we need to do everything possible to stay the capital of that industry, no matter how the technology shifts.

Though I do have some issues with your assumptions on how people choose which regions to relocate in, I agree with your first couple of lines and your bottom line. We need both diversification and to the the capital of the energy industry. The latter is a status that is not debatable, however. We've scored so many corporate relocations from the energy industry throughout the last century that we can be secure in our role, and even if the energy industry did go bust, we'd still be the energy capital...just like Detroit is still a capital to the automotive manufacturing industry.

But diversified growth can be achieved concurrently, and needs to be.

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So Dallas grew by 146,000 and we grew by 130,000. I guess if we can't outgrow them with a spike in oil prices we never will outgrow them. I don't suppose people returning to New Orleans from Katrina could still be a factor?

I suspect people returning to New Orleans from Katrina actually could have still been a factor. We are talking about the 2007-2008 time period, a period when people were clearly still returning to New Orleans in fairly sizable numbers. I believe Houston experienced larger job growth than did DFW during that period of time, so . . .

6th behind Philly, but only because the Census added counties to Philly's metro area a year or so ago. We'll surpass them very soon, if we haven't already, and that makes us 5th in the nation right behind Dallas/FW.

Not true, Niche. (We've been over this before). A few counties were added to Philly's combined area, which is not what we're talking about here.

You are correct, however, that we have almost certainly either surpassed them already or will very very soon.

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I suspect people returning to New

Not true, Niche. (We've been over this before). A few counties were added to Philly's combined area, which is not what we're talking about here.

You are correct, however, that we have almost certainly either surpassed them already or will very very soon.

Well somehow or another, we had been in a position where we should've passed them up and then the rules changed and bought them time. I know because I had started a thread on it a couple years ago, back when we originally should've surpassed them. ...but something happened to prevent that, and it most certainly was not a Philly growth spurt. If not the redefinition of their geographic area, then it must've been some kind of sweeping revisions to their population counting methodology. Or maybe it was part of some congressional compromise that Philly be counted as having more people; the Census is not immune to politics by any means.

Edited by TheNiche
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Well somehow or another, we had been in a position where we should've passed them up and then the rules changed and bought them time. I know because I had started a thread on it a couple years ago, back when we originally should've surpassed them. ...but something happened to prevent that, and it most certainly was not a Philly growth spurt. If not the redefinition of their geographic area, then it must've been some kind of sweeping revisions to their population counting methodology. Or maybe it was part of some congressional compromise that Philly be counted as having more people; the Census is not immune to politics by any means.

. . . or your memory is playing tricks on you again. ;-)

The level of hatred on here over my comments is astonishing, even by HAIF standards.

:mellow:

Disagreement does not equal hatred.

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The oil companies have a responsibility to their shareholders not to die with any particular technology. They will aggressively get into whatever's next, and most already have, with the exception of Exxon.

I don't know what you could reference that would support the notion that oil ("energy") companies will "aggressively get into whatever's next." Just about everyone in the worldwide energy community acknowledges that the oil companies are investing minuscule amounts into R&D/renewable technology.

Please see the following: http://www.pbs.org/wgbh/pages/frontline/he...es/mindset.html

The oil companies kind of remind me of record companies 10 -15 years ago. At that time, record companies had an opportunity to step to the forefront of the digital download technology as it was evolving. Instead of embracing the technology, and acknowledging that times were changing, the major labels held a death grip on their old business model because that was the only way they knew how to make money. Fast forward to the present day, and you see massive layoffs, consolidations, and dwindling revenues as they scramble to play catch up to the technology/changing times. It's NO secret that fossil fuels won't be the predominant fuel source in the next 50 years. The oil. . .ahem, excuse me, energy companies better get on it.

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I don't know what you could reference that would support the notion that oil ("energy") companies will "aggressively get into whatever's next." Just about everyone in the worldwide energy community acknowledges that the oil companies are investing minuscule amounts into R&D/renewable technology.

It's NO secret that fossil fuels won't be the predominant fuel source in the next 50 years. The oil. . .ahem, excuse me, energy companies better get on it.

You don't need to necessarily create your own demise. Just have the financial capability to buy the right companies and technologies when they show viability. Cisco hasn't always been at the leading edge of networking technologies, but they buy the right companies and technology when they need to do so to maintain their dominance.

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I see your concerns, but you have to understand Houston is the ENERGY Capital not just about Oil.

This is true. However, much of Houston's Energy Industry Workforce is rooted in oil production. . .From the training of highly skilled workers such as engineers, to lower level jobs like machinists. . .they exist to serve the purpose of extracting oil out of the ground. Even the mighty ship channel that we like to gush over so much wouldn't be near as mighty if it were not for the oil companies and their shipments of crude oil, tools, supplies, and people needed to extract that oil.

Turn the page to this century, when undoubtedly more and more energy generation will come from renewable sources. The need for oil tankers, and people trained to find/pull oil out of the ground, and others tied to the extraction of oil will take on a diminishing role. I have no doubt that the oil companies will be able to survive. However, I also have NO doubt that many of those jobs will disappear.

Edited by 713 To 214
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You don't need to necessarily create your own demise. Just have the financial capability to buy the right companies and technologies when they show viability. Cisco hasn't always been at the leading edge of networking technologies, but they buy the right companies and technology when they need to do so to maintain their dominance.

It's more than just an issue of ownership, though. Dallas has the Exxon corporate headquarters, yet for very practical reasons relating to logistics and labor markets, Houston has a larger Exxon workforce. Chevron is similarly situated, as is Shell Oil. All of these are major Houston employers.

But there is no compelling reason to locate a divisional headquarters, a large manufacturing operation, or a large research center for non-oil and non-gas energies in Houston. We aren't a capital for coal companies, for instance, even though they're part of the energy industry.

Tory, I really like your blog and am very simpatico with your general approach to growth in Houston, but sometimes you can go a little bit far on the cheerleading. This issue about the future of fossil fuels is a very real problem, one that needs to be addressed by economic development agencies all the way up through the State level. Houston has some secondary infrastructure in healthcare, transportation, and aerospace that it needs to do a much better job at leveraging them than we are at present.

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A couple of things to point out. For those who do not think that a reduction in oil/energy's impact on the Houston's economy is substantial, let's look at it in population terms. In 1980, when the Houston metro population was 2,750,000, oil and related industries impacted as much as 80% of Houston's economy. In other words, 2,200,000 Houstonians relied on the oil/energy industry for their survival. Just 550,000 were not reliant on the oil industry. Today, the estimated metro population is 5,840,000, and oil/energy as a percentage of the Houston economy is estimated at 47%. So, 2,745,000 depend on the oil industry, while 3,095,000 are not dependent on the oil industry for their living. The non-oil dependant economy has grown to almost 6 times its size in 1980, or 450%, while the oil-dependant population has grown only 25%. In other words, nearly all of Houston's growth during the last 29 years can be attributed to non-oil industries.

Those in the oil business can attest to this. In the 80s, massive layoffs occurred due to the oil crash. Drilling rig counts dropped from the mid-4000s to less than 1,000. Even now, they hover in the 1,000 range, 1/4 of the 1980 number. The oil industry has changed, as well. Where in 1980, 69% of the industry was engaged in drilling for oil, today that percentage is 31%. Over 51% of the oil business today is dedicated to refining and plastics and chemicals...all products that will be used and needed in the US economy for decades to come. Houston, being the refining capital of the US, will continue to be the hub for importing oil, refining it, turning it into plastic and chemicals and fertilizer, and shipping it off to the rest of the US. These activities take manpower.

The oil/energy industry also comprises natural gas, the new darling of the energy industry. Houston is home to virtually all of the biggest pipeline companies responsible for moving that gas to market. There are also LNG terminals being built to import liquid natural gas from overseas. The Port of Houston will continue to be important in accepting natural gas and shipping out refined chemicals and plastics. As the Panama Canal is expanded, Houston will receive ever larger shipments of containerized cargo for delivery to the nation's midsection. In fact, Dallas is counting on that expanded capacity to expand its rail transportation hub.

While it is easy to imagine a transformation to a non-oil based existence, in practice, it is not a simple or quick process. Only high oil prices will push the shift to renewables. High oil prices help Houston's economy. Even Peak Oil will benefit Houston, as oil prices rise for the dwindling supply. The $140 oil of 2008 showed us what happens when prices rise. People use less oil, and oil companies use the profits to look for more. All of that is to Houston's advantage.

I do not point this out as a cheerleader for Houston. It is merely to point out that predicting Houston's demise because the oil industry will go away now that Obama is president is the height of ignorance. Obama is attempting to push renewable energy from 1 or 2% to 10%. That leaves a lot of room for oil, and it does not even include chemicals and plastics, materials, I might add, that are crucial to the building of lightweight electric cars and windmills, and even solar panels. Oil is going nowhere soon, and neither is Houston, despite what the inlanders may wish.

Edited by RedScare
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It is merely to point out that predicting Houston's demise because the oil industry will go away now that Obama is president is the height of ignorance.

Who predicted that?

Oil is going nowhere soon, and neither is Houston, despite what the inlanders may wish.

Who are the 'inlanders'?

Why have you reacted with so much rage to my comments?

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It's NO secret that fossil fuels won't be the predominant fuel source in the next 50 years. The oil. . .ahem, excuse me, energy companies better get on it.

Do you have anything to back up that statement? I think fossil fuels will remain our primary source of energy for at least 50 years - google around and I think you will find most tend to agree

And why should Exxon rush into alternative fuels? I'd prefer them keep doing what they do best for now

Edit: removed a link

Edited by OkieEric
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A couple of things to point out. For those who do not think that a reduction in oil/energy's impact on the Houston's economy is substantial, let's look at it in population terms. In 1980, when the Houston metro population was 2,750,000, oil and related industries impacted as much as 80% of Houston's economy. In other words, 2,200,000 Houstonians relied on the oil/energy industry for their survival. Just 550,000 were not reliant on the oil industry. Today, the estimated metro population is 5,840,000, and oil/energy as a percentage of the Houston economy is estimated at 47%. So, 2,745,000 depend on the oil industry, while 3,095,000 are not dependent on the oil industry for their living. The non-oil dependant economy has grown to almost 6 times its size in 1980, or 450%, while the oil-dependant population has grown only 25%. In other words, nearly all of Houston's growth during the last 29 years can be attributed to non-oil industries.

Those in the oil business can attest to this. In the 80s, massive layoffs occurred due to the oil crash. Drilling rig counts dropped from the mid-4000s to less than 1,000. Even now, they hover in the 1,000 range, 1/4 of the 1980 number. The oil industry has changed, as well. Where in 1980, 69% of the industry was engaged in drilling for oil, today that percentage is 31%. Over 51% of the oil business today is dedicated to refining and plastics and chemicals...all products that will be used and needed in the US economy for decades to come. Houston, being the refining capital of the US, will continue to be the hub for importing oil, refining it, turning it into plastic and chemicals and fertilizer, and shipping it off to the rest of the US. These activities take manpower.

The oil/energy industry also comprises natural gas, the new darling of the energy industry. Houston is home to virtually all of the biggest pipeline companies responsible for moving that gas to market. There are also LNG terminals being built to import liquid natural gas from overseas. The Port of Houston will continue to be important in accepting natural gas and shipping out refined chemicals and plastics. As the Panama Canal is expanded, Houston will receive ever larger shipments of containerized cargo for delivery to the nation's midsection. In fact, Dallas is counting on that expanded capacity to expand its rail transportation hub.

While it is easy to imagine a transformation to a non-oil based existence, in practice, it is not a simple or quick process. Only high oil prices will push the shift to renewables. High oil prices help Houston's economy. Even Peak Oil will benefit Houston, as oil prices rise for the dwindling supply. The $140 oil of 2008 showed us what happens when prices rise. People use less oil, and oil companies use the profits to look for more. All of that is to Houston's advantage.

I do not point this out as a cheerleader for Houston. It is merely to point out that predicting Houston's demise because the oil industry will go away now that Obama is president is the height of ignorance. Obama is attempting to push renewable energy from 1 or 2% to 10%. That leaves a lot of room for oil, and it does not even include chemicals and plastics, materials, I might add, that are crucial to the building of lightweight electric cars and windmills, and even solar panels. Oil is going nowhere soon, and neither is Houston, despite what the inlanders may wish.

Just a couple of days ago, researchers announced a potential breakthrough in nuclear fusion. Whether it is that sort of technological breakthrough, efficiency improvements to existing technologies, a cap-and-trade carbon program, windfall profits taxes such as would discourage new drilling when prices get too high, demand destruction resulting from high prices, the continued trend towards many countries seizing and operating their own oil reserves, or (more likely) some combination of these things over the period of the next ten to twenty years, I do believe that Houston's future is uncertain.

To be clear, this doesn't necessarily have anything to do with Obama. I don't see a realistic threat within the next four to eight years, and the decline would probably be a slow one, more similar to Detroit than to Houston circa 1986.

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Just a couple of days ago, researchers announced a potential breakthrough in nuclear fusion. Whether it is that sort of technological breakthrough, efficiency improvements to existing technologies, a cap-and-trade carbon program, windfall profits taxes such as would discourage new drilling when prices get too high, demand destruction resulting from high prices, the continued trend towards many countries seizing and operating their own oil reserves, or (more likely) some combination of these things over the period of the next ten to twenty years, I do believe that Houston's future is uncertain.

To be clear, this doesn't necessarily have anything to do with Obama. I don't see a realistic threat within the next four to eight years, and the decline would probably be a slow one, more similar to Detroit than to Houston circa 1986.

You know Niche, sometimes I think your posts are just too carefully reasoned and calmly stated for HAIF. Where's the rage? Obviously we all love Houston and are interested in its future or we would not be on this forum, so why not ridicule those who disagree with you? If nothing else, then at least selectively misquote them and put words in their mouth so that you can insult their intelligence.

;)

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Why have you reacted with so much rage to my comments?

Why do you think a rebuttal of your non-fact based opinion is "rage" and "hatred"? Seriously, if you cannot support your opinion with a fact based argument, and must resort to claiming fact based rebuttals as "hatred" and "rage", I have no choice but to ignore you completely.

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Why do you think a rebuttal of your non-fact based opinion is "rage" and "hatred"? Seriously, if you cannot support your opinion with a fact based argument, and must resort to claiming fact based rebuttals as "hatred" and "rage", I have no choice but to ignore you completely.

I think anyone who is able to support an opinion with a few stats, figures and facts that can be verified on a google search engine MUST be full of hatred and rage. Therefore they MUST also be the devil! BTW, is that why they call you Red Scare?

:P Just kidding, please continue setting these maroons str8, red.

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Just a couple of days ago, researchers announced a potential breakthrough in nuclear fusion. Whether it is that sort of technological breakthrough, efficiency improvements to existing technologies, a cap-and-trade carbon program, windfall profits taxes such as would discourage new drilling when prices get too high, demand destruction resulting from high prices, the continued trend towards many countries seizing and operating their own oil reserves, or (more likely) some combination of these things over the period of the next ten to twenty years, I do believe that Houston's future is uncertain.

To be clear, this doesn't necessarily have anything to do with Obama. I don't see a realistic threat within the next four to eight years, and the decline would probably be a slow one, more similar to Detroit than to Houston circa 1986.

I agree that over time there will be a gradual decline in the amount of oil produced and used. However, that is already occurring in some respects, and the oil industry has adapted to it, and more importantly, Houston has grown in spite of it. Since 1980, Houston's population has increased 3,084,000, nearly identical to Dallas' 3,254,000, even though Dallas was a bigger metro then and now. Percentagewise, Houston actually grew faster, 211% to 206%. This occured despite the oil crash of the mid 80s, and despite the dreadfully low oil prices of the 80s and 90s. This occured despite the fact that the US reached peak oil in 1970. The shift to offshore drilling and deeper drilling required more technology, more engineering, and more manufacturing. That will continue as world oil supplies shrink. Additionally, my post pointed out that Houston was growing its non-oil economy exponentially compared to its oil based economy. Even as the oil industry gradually shrinks, the non-oil industry will grow, at least as the national economy grows.

There is clearly uncertainty, but that uncertainty is worldwide. A prolonged recession will hurt the conversion to non-oil energy, as conversion takes money. Automobile production has plunged from 17 million to 9 million. That includes hybrids. New York's Wall Street has shed a quarter million jobs in the last year, far worse than anything the oil industry may experience. Home building has dropped from 1.6 million annual starts to 468,000. Consumer spending is down 5%. These issues hurt "diversified" cities far worse than Houston. Looking at Houston in a vacuum skews the picture.

EDIT: Sometimes it is helpful to look back at what the original point was. The original post suggested that Houston was not well positioned to compete with Atlanta and Dallas, presumably on population totals alone. While no facts were given to support that hypothesis, my responses are given merely to rebut the suggestion that Houston will fall behind, merely because it is overwhelmingly an oil and gas town. My responses suggest that Houston's diversified economy has grown far faster than its oil economy, and its diversified economy is largely responsible for what Houston looks like today, rather than its oil economy. The oil economy is more like icing on the cake, and will be more so in the future.

Edited by RedScare
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Dang DFW is definitely pulling away from Houston. By the time we reach the 6 million mark, DFW will be on the verge of approaching 7 million. The gap is widening because its now a 600k population difference as opposed to the 500k difference before. I wonder what's their secret?

I have no doubt that the oil companies will be able to survive. However, I also have NO doubt that many of those jobs will disappear.

Do you ever have anything positive to say about anything regarding Houston? I know you're a hope to die dallasite now but you really need to give it a rest sometime. <_<

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I think what some people are worried about is what is Houston back up plan if or when oil is no longer dominate. New Tech is making transportaion with less and less gas possible, While Oil companies new tech is to go dig deeper for oil or use less oil platforms. I think where some differ on here is how difersified is the Houston energy sector, if at all. About 40% of our economy is energy and I think out of that 40 most is in oil.

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I agree that over time there will be a gradual decline in the amount of oil produced and used. However, that is already occurring in some respects, and the oil industry has adapted to it, and more importantly, Houston has grown in spite of it. Since 1980, Houston's population has increased 3,084,000, nearly identical to Dallas' 3,254,000, even though Dallas was a bigger metro then and now. Percentagewise, Houston actually grew faster, 211% to 206%. This occured despite the oil crash of the mid 80s, and despite the dreadfully low oil prices of the 80s and 90s. This occured despite the fact that the US reached peak oil in 1970. The shift to offshore drilling and deeper drilling required more technology, more engineering, and more manufacturing. That will continue as world oil supplies shrink. Additionally, my post pointed out that Houston was growing its non-oil economy exponentially compared to its oil based economy. Even as the oil industry gradually shrinks, the non-oil industry will grow, at least as the national economy grows.

There is clearly uncertainty, but that uncertainty is worldwide. A prolonged recession will hurt the conversion to non-oil energy, as conversion takes money. Automobile production has plunged from 17 million to 9 million. That includes hybrids. New York's Wall Street has shed a quarter million jobs in the last year, far worse than anything the oil industry may experience. Home building has dropped from 1.6 million annual starts to 468,000. Consumer spending is down 5%. These issues hurt "diversified" cities far worse than Houston. Looking at Houston in a vacuum skews the picture.

EDIT: Sometimes it is helpful to look back at what the original point was. The original post suggested that Houston was not well positioned to compete with Atlanta and Dallas, presumably on population totals alone. While no facts were given to support that hypothesis, my responses are given merely to rebut the suggestion that Houston will fall behind, merely because it is overwhelmingly an oil and gas town. My responses suggest that Houston's diversified economy has grown far faster than its oil economy, and its diversified economy is largely responsible for what Houston looks like today, rather than its oil economy. The oil economy is more like icing on the cake, and will be more so in the future.

You're talking about the recession a lot. To be perfectly 100% clear, I'm not really arguing toward anything resulting from the recession as a factor in the potential decline of oil as an economic driver for Houston. I would be more inclined to believe that our exposure to this recession is lessened because we are so disproportionately dependent upon the energy industry, and that we will undergo another boom once the recession ends and oil prices increase once again. But as I stated earlier, my concerns are not at all short-term in nature. When oil prices increase again, that is when alternative energies become more economically viable, when governments may be inclined to punish oil companies rather than allow their incentives to produce, and when more monies are allocated for alternative energy research. When our boom matures, that is the danger zone. It's a ways off. Yet clearly, as evidenced by previous oil busts, it doesn't help us at all when the energy industry does poorly, and it is a very bumpy road on the path of recovery.

Also, as a footnote, one of the key datasets you've been relying on is the ratio of energy to non-energy core employment put out by the University of Houston's Institute for Regional Forecasting, headed by Prof. Barton Smith. Smith was one of my own professors, and the coursework I received from him was in all honesty some of the best-taught material that I'd received in all my time at UH. I respect the guy immensely and apply a lot of what I was taught to discussions here on HAIF. However, I've always found his methodology dubious when it comes to this statistic. I no longer have access to Databook Houston, so I can't go through his notes at the back of the book to cite the exact composition of this index, but it is sufficient to say that I doubt its validity; I'm not sure that it reports what it says it does. I don't blame him for trying to come up with some basic measure of economic diversification--it's a very important topic--but the historical SIC and NAICS employment estimates available to him are simply inadequate to the task.

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Why do you think a rebuttal of your non-fact based opinion is "rage" and "hatred"? Seriously, if you cannot support your opinion with a fact based argument, and must resort to claiming fact based rebuttals as "hatred" and "rage", I have no choice but to ignore you completely.

You say you have "no choice" but to ignore me: if my views are so silly and groundless, why didn't you just ignore me from the start? Why were you posting about it after midnight last night? A lot of people on here post things that don't make any sense to me and I usually do just that, ignore them. I don't devote multi-paragraph posts to trying to refute them with statistics dug up from all over the internet, and check back all day long to make responses. Either some point I made got to you, or you really have a lot of time to waste.

Fine Red, ignore me. I will continue to discuss this with anyone still interested in discussing (not arguing) it, and you are free to ignore me. But I don't think you can.

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H-Town, in 8 posts on this thread you have yet to post a single "view". You cited one statistic, the one that could be seen in the thread title. You gave one opinion, not backed up by any data. All of the rest of your posts have been whining and carping because I ran circles around your unsupported opinion.

EDIT: Insulting comment directed at petty poster deleted.

Edited by RedScare
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H-Town, in 8 posts on this thread you have yet to post a single "view". You cited one statistic, the one that could be seen in the thread title. You gave one opinion, not backed up by any data. All of the rest of your posts have been whining and carping because I ran circles around your unsupported opinion.

EDIT: Insulting comment directed at petty poster deleted.

I thought you were going to ignore me, Red. But since you can't, I will say that my original "view" in this discussion was that Houston seems to be economically vulnerable in coming decades, considering the extent to which we rely on one industry, energy. You say that I did not cite any facts, but I did - I posted a list of our 25 largest companies in 2008, so that people could see the extent to which we rely on oil. I mentioned two recent corporate relocations to Dallas, and wondered when was the last time Houston had a corporate relocation that was non-energy related.

You had this to say:

its diversified economy is largely responsible for what Houston looks like today, rather than its oil economy. The oil economy is more like icing on the cake, and will be more so in the future.

In light of the list of our largest companies that I posted, I think this looks absurd. I wasn't going to call you out until you made this a person-to-person argument rather than a friendly discussion, but honestly, do you really think that the oil economy is only the "icing on the cake" for Houston?

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Sorry, H-Town, but I agree with Red on this one. Just because you got dogpiled doesn't mean people hate you.

Maybe "hate" was too strong a word, but I find it amazing that when someone tries to start a discussion on a city's economic future, they are characterized as "woe is me," the "height of ignorance," "petty," and whatever "insulting comment" RedScare had to delete. The mere fact that I got "dogpiled" for suggesting that Houston should take more steps to diversify its economy begs the very worthwhile question, why on earth dogpile someone for an opinion on an urban issue? If you think the facts are on your side, then just stating the facts would probably be more effective than anything.

There is something called ad hominem argumentation that I think a forum on architecture and urban issues could do much better without. There used to be people around here who agreed with me about that and would send me PM's to tell me they thought so, but I guess they all left.

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To change the subject back to an earlier rant, why in the world does anyone think lower Westheimer is hard to drive on? Unless you are in a Hummer/Escalade/Excursion/Tahoe/etc... that street is perfectly fine. I drive on it almost daily now and there's hardly any traffic and I've never had any problems using it to get east-west. It's also one of the most interesting streetscapes to drive along too.

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To change the subject back to an earlier rant, why in the world does anyone think lower Westheimer is hard to drive on? Unless you are in a Hummer/Escalade/Excursion/Tahoe/etc... that street is perfectly fine. I drive on it almost daily now and there's hardly any traffic and I've never had any problems using it to get east-west. It's also one of the most interesting streetscapes to drive along too.

I don't think we're talking about lower Westheimer, at least not the part I consider "lower".

From Montrose to Bagby is OK traffic-wise, but impossibly narrow when METRO buses are near. They just don't fit in the lanes, so even if you're narrow car there isn't really room to pass them.

Montrose to Shepherd, on the other hand, has horrible traffic whenever the shops are open. Street parking narrows it to 2 lanes and cars turning left create lengthy delays. That's the stretch I avoid.

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To change the subject back to an earlier rant, why in the world does anyone think lower Westheimer is hard to drive on? Unless you are in a Hummer/Escalade/Excursion/Tahoe/etc... that street is perfectly fine. I drive on it almost daily now and there's hardly any traffic and I've never had any problems using it to get east-west. It's also one of the most interesting streetscapes to drive along too.

Thank you for that little shot of reality. My thoughts exactly.

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To change the subject back to an earlier rant, why in the world does anyone think lower Westheimer is hard to drive on? Unless you are in a Hummer/Escalade/Excursion/Tahoe/etc... that street is perfectly fine. I drive on it almost daily now and there's hardly any traffic and I've never had any problems using it to get east-west. It's also one of the most interesting streetscapes to drive along too.

I've driven many vehicles on Westheimer... When your on the outter lanes, like when the street curves, I always hear my wheels hit some huge pothole or bump in the road, even when going under 20mph, shaking the sports car/sedan/car/jeep/mini/suv. Which happens on Shepard, around the KFC.

Ever been on Westheimer after 6pm? Infront of Agora is particular, because of the cars parked on the street. Busy Busy.

I get nervous driving a Jetta down the narrow parts, not my driving, but the others who don't know how to stay in the lanes & try to avoid the potholes & bumps in theirs. As Meme mentioned, the Metro Buses might as well drive in the middle, because I have yet to see someone with the audacity to pull around them unless there is no traffic coming in the other direction.

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Or me for that matter.

It's possible, but you really need to be sure of your driving skills and time the whole thing right.

Lower Westheimer can be a bit of a challenge, but it is no place for people who can't concentrate STRICTLY on their driving (i.e. Talking on Cell, Passengers, Eating, etc), because if they can't; they will have some modifications to the body of their cars.

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There are a couple of curves on lower Westheimer that could stand to be redesigned. For instance, buses have to basically take up both lanes to negotiate that turn cleanly (the same could be said for vans and other larger vehicles). But other than that, Westheimer isn't that difficult to handle.

The potholes are another issue, though.

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