Can the Boom Continue?

[august948]

Why not both?

 

Seriously though, will keystone pipeline approval benefit Houston's economy?

 

Sure...why not?

 

I would think that pipeline plus all the stuff revolving around LNG is going to provide a solid basis for us for a long, long time.  Plus the panama canal widening, plus the medical center, plus, plus, plus.

 

Not to say there won't be a downturn or slowdown, 'cause there will. But nothing like the crash of the '80's.

[Slick Vik]

Sure...why not?

I would think that pipeline plus all the stuff revolving around LNG is going to provide a solid basis for us for a long, long time. Plus the panama canal widening, plus the medical center, plus, plus, plus.

Not to say there won't be a downturn or slowdown, 'cause there will. But nothing like the crash of the '80's.

LNG is going to be mostly exported overseas. Its benefits to Americans are short term and limited.

Same thing with keystone that crude is going to be shipped from gulf to other countries as well. I wish people would see this.

[swtsig]

LNG is going to be mostly exported overseas. Its benefits to Americans are short term and limited.

Same thing with keystone that crude is going to be shipped from gulf to other countries as well. I wish people would see this.

Your inability to stay on topic yet unrelenting ability to espouse your uninformed opinion is almost commendable, that's how often you do it.

Who said anything about Americans? This thread is about houston. By your very own admission Houston is an oil town. Period. If you're unable or unwilling to learn about how exporting LNG can be beneficial to the Houston economy than do us all a favor and read up before you decide to troll another thread.

I look forward to you moving the goal posts - again - in your response.

[august948]

LNG is going to be mostly exported overseas. Its benefits to Americans are short term and limited.

Same thing with keystone that crude is going to be shipped from gulf to other countries as well. I wish people would see this.

 

And will it magically move from the well to Europe via a great big pink unicorn?

 

Are you arguing that we should not export oil and gas?

 

[UtterlyUrban]

If one really wanted to see Houston boom, one would want the US to be a net oil/gas exporter. They wouldn't be able to build the towers fast enough.

[Slick Vik]

Your inability to stay on topic yet unrelenting ability to espouse your uninformed opinion is almost commendable, that's how often you do it.

Who said anything about Americans? This thread is about houston. By your very own admission Houston is an oil town. Period. If you're unable or unwilling to learn about how exporting LNG can be beneficial to the Houston economy than do us all a favor and read up before you decide to troll another thread.

I look forward to you moving the goal posts - again - in your response.

“Understand what this project is: It is providing the ability of Canada to pump their oil, send it through our land down to the Gulf where it will be sold everywhere else,” the president said today during a visit to Yangon, Myanmar. “It doesn’t have an impact on U.S. gas prices.”

--Barack Obama

http://www.bloomberg.com/news/2014-11-14/obama-rejects-arguments-keystone-will-add-jobs-cut-pump-prices.html

[Slick Vik]

The price of gas in Asia right now, depending

on the contract, can be as much as $16,

whereas it's $2.50 here. So, if you're in the business to extract hydrocarbons, you're going to look for the customer that's going to pay you the most money.

And that is most decidedly Asia at the moment, and Europe. Europe's paying about, what,

$9.50, $10, something like that.

The EIA--Energy Information Administration--reported that, as a result of export, domestic natural gas prices would rise by more than 50%.

This populist argument that industries used about, you know, "American gas, by Americans,

for Americans," while, in the background, they're working very hard to be able to export this gas out to grow other economies. pricing pressures are just going to dictate that the domestic price is going to go up.

And wouldn't it be great for industry if they get us to be much more dependent upon natural gas, and then suddenly the gas price starts rising? To me, that's a classic consumer squeeze, and we will have done it to ourselves and put ourselves right back in the same boat that we're in with crude oil right now.

We'll be much more dependent

upon natural gas, and it will no longer be cheap.

--gasland part 2

[august948]

The price of gas in Asia right now, depending

on the contract, can be as much as $16,

whereas it's $2.50 here. So, if you're in the business to extract hydrocarbons, you're going to look for the customer that's going to pay you the most money.

And that is most decidedly Asia at the moment, and Europe. Europe's paying about, what,

$9.50, $10, something like that.

The EIA--Energy Information Administration--reported that, as a result of export, domestic natural gas prices would rise by more than 50%.

This populist argument that industries used about, you know, "American gas, by Americans,

for Americans," while, in the background, they're working very hard to be able to export this gas out to grow other economies. pricing pressures are just going to dictate that the domestic price is going to go up.

And wouldn't it be great for industry if they get us to be much more dependent upon natural gas, and then suddenly the gas price starts rising? To me, that's a classic consumer squeeze, and we will have done it to ourselves and put ourselves right back in the same boat that we're in with crude oil right now.

We'll be much more dependent

upon natural gas, and it will no longer be cheap.

--gasland part 2

 

Debunking GasLand...

http://energyindepth.org/wp-content/uploads/2010/06/Debunking-GasLand.pdf

 

I'd just cut and paste it but it's 11 pages long.  By my count it debunks at least 50 points made in the film, and lists them by time point in the film.

 

Here's another..."‘Gasland Part II’ director uses hoax as evidence against fracking"

http://dailycaller.com/2013/07/08/gasland-part-ii-director-uses-hoax-as-evidence-against-fracking/

 

 

The Washington Free Beacon reports that the controversial anti-fracking sequel features a scene where a Texas landowner is able to light the contents of his garden hose on fire. This is then used as evidence that nearby oil and gas operations  caused the contamination.

However, a Texas court ruled that the scene was a hoax concocted by an environmental activist  engaged in a prolonged battle with a local gas company. The environmentalist sought to inflate the dangers of fracking.

 

Texas’ 43rd Judicial District Court found last year that the Texas landowner,  “under the advice or direction” of environmental activist Alisa Rich, “intentionally attach[ed] a garden hose to a gas vent — not a water line” and lit it on fire.  “This demonstration was not done for scientific study but to provide local and national news media a deceptive video, calculated to alarm the public into believing the water was burning,” the court ruled.

 

It seems very strange that Saudi Arabia, among many other countries, can have exported hydrocarbons for many decades, made huge profits, employed thousands upon thousands of their citizens, built infrastructure from from nothing and, apparently, you think the US can't do the same.

 

[jgriff]

“Understand what this project is: It is providing the ability of Canada to pump their oil, send it through our land down to the Gulf where it will be sold everywhere else,” the president said today during a visit to Yangon, Myanmar. “It doesn’t have an impact on U.S. gas prices.”

--Barack Obama

http://www.bloomberg.com/news/2014-11-14/obama-rejects-arguments-keystone-will-add-jobs-cut-pump-prices.html

 

Its not supposed to have an impact on US gas prices. Its against the law to export unrefined crude from the U.S. The oil from the Keystone pipeline would have been refined in the Houston area and shipped abroad. It would have provided jobs and tax payments in the Houston and Beaumont/Port Arthur area.

 

[Slick Vik]

Debunking GasLand...

http://energyindepth.org/wp-content/uploads/2010/06/Debunking-GasLand.pdf

I'd just cut and paste it but it's 11 pages long. By my count it debunks at least 50 points made in the film, and lists them by time point in the film.

Here's another..."‘Gasland Part II’ director uses hoax as evidence against fracking"

http://dailycaller.com/2013/07/08/gasland-part-ii-director-uses-hoax-as-evidence-against-fracking/

It seems very strange that Saudi Arabia, among many other countries, can have exported hydrocarbons for many decades, made huge profits, employed thousands upon thousands of their citizens, built infrastructure from from nothing and, apparently, you think the US can't do the same.

Way to ignore the point I was trying to make completely.

[jgriff]

Way to ignore the point I was trying to make completely.

 

Can you tell us what point you are trying to make? We know that crude from Keystone won't lower gasoline prices. We know that a lot of LNG will be exported from the terminals being built in Texas right now. Is there some other point?

[arche_757]

I've said before - the Oil Boom is "over" in the sense we've likely seen just about all the construction possible from it over the past few years.  However, the ancillary boom associated with the big oil jobs growth is on its way.  Hospitals, schools, houses, roads, freeways, bridges etc. are all yet to happen - or have only just begun.

 

And lets say Oil cra*s out for a bit... just like the 1990s and early 2000s we will see other industries pick-up the pieces and we'll continue to move forward.  The Medical Center was BOOMING during my school years (early 2000s) and frankly I'd love to see something similar happen over the next decade (no slow-downs, but a boom in biomedical).

[kdog08]

Way to ignore the point I was trying to make completely.

 

Oil and gas passing through Houston/Texas benefits Houston.

[kdog08]

I've said before - the Oil Boom is "over" in the sense we've likely seen just about all the construction possible from it over the past few years.  However, the ancillary boom associated with the big oil jobs growth is on its way.  Hospitals, schools, houses, roads, freeways, bridges etc. are all yet to happen - or have only just begun.

 

And lets say Oil cra*s out for a bit... just like the 1990s and early 2000s we will see other industries pick-up the pieces and we'll continue to move forward.  The Medical Center was BOOMING during my school years (early 2000s) and frankly I'd love to see something similar happen over the next decade (no slow-downs, but a boom in biomedical).

 

Higher education in combination with biomedicine and other disciplines (engineering, material science, nanotech, etc.) would greatly benefit Houston. I imagine it would take awhile to get on Boston, NYC, or the Bay Area's level, but we could certainly become a second tier city in a decade or so if we invest in it. 

 

Most optimistically, the COH can reign in it's pension problem and translate that into more infrastructure spending and/or lower taxes. We pass a few bonds that focus on providing funds for academic buildings and dense multi-unversity student housing;

 

Or just pray Rice decides to double it's entire student and teacher population over 2 decades. 

[samagon]

LNG is going to be mostly exported overseas. Its benefits to Americans are short term and limited.

Same thing with keystone that crude is going to be shipped from gulf to other countries as well. I wish people would see this.

 

I don't think this thread needs to be about keystone at all, but I'll say my piece and leave it.

 

There are a few very good reasons why it's stupid that the pipeline is being held up, there is only one very good reason why it is being held up. I'll start with the good reason.

 

Good reason:

A. location. The route that the proposed pipeline will go needs to be carefully considered. I think the plans have the unbuilt portion going over an aquifer? Is that a wise choice?

 

Bad reasons:

A. using the oil. The oil is already being used. Do you think they are just not producing the oil until the pipeline is built? No. They are producing the oil, and they are shipping it in rail cars. There are a few reasons why this is a horrible idea. There are more spills via rail car than via pipeline. There are a limited number of train tracks in the USA, there are only so many rail cars that can travel on a train track per day, the oil is taking the place of other goods that would be shipped via rail, these other goods are still shipped, they're just shipped via truck, which costs more, takes more time, creates more congestion on the freeways, is less safe than rail car. And least important to me, it's cheaper to transport via pipeline. 

 

B. The oil won't be used by us. True, it's being shipped across our country and exported, but it's being refined first, and we are paying Americans (jobs) to make the pipeline, so the construction project won't last forever, but the pipeline is going to be monitored, the workers at the refinery, the workers at the terminal stations, maintenance, there's plenty of Americans that will be employed via this.

 

C. As mentioned above, stopping the pipeline doesn't stop the oil from being used, it's still used it's just shipped much via means that are much less efficient, less safe, and overall make it worse for every American.

 

I'm as green as they come, I ride a bicycle when I can, I grow my own food, I follow all three Rs of conservation, not just the recycle one, so why is it that I am for the KXL pipeline? Out of the causes that we should be fighting against, this is one of the worst to waste time fighting. Get it built and get it built yesterday so that everything is shipped via it's most efficient and safest method possible. If you're really green and into saving the planet, not building the KXL is going to have a net negative effect on the planet, to fight against it undermines the sanity and validity of the green movement to people who are smart enough to reason the above out.

 

As this relates to Houston, either building or not building the KXL pipeline won't have an effect on Houston, the oil is already coming to us, just via less efficient/safe methods.

[samagon]

The price of gas in Asia right now, depending

on the contract, can be as much as $16,

whereas it's $2.50 here. So, if you're in the business to extract hydrocarbons, you're going to look for the customer that's going to pay you the most money.

And that is most decidedly Asia at the moment, and Europe. Europe's paying about, what,

$9.50, $10, something like that.

The EIA--Energy Information Administration--reported that, as a result of export, domestic natural gas prices would rise by more than 50%.

This populist argument that industries used about, you know, "American gas, by Americans,

for Americans," while, in the background, they're working very hard to be able to export this gas out to grow other economies. pricing pressures are just going to dictate that the domestic price is going to go up.

And wouldn't it be great for industry if they get us to be much more dependent upon natural gas, and then suddenly the gas price starts rising? To me, that's a classic consumer squeeze, and we will have done it to ourselves and put ourselves right back in the same boat that we're in with crude oil right now.

We'll be much more dependent

upon natural gas, and it will no longer be cheap.

--gasland part 2

 

I have two problems with this quote. It's disingenuous. It makes you think that the contract price of gasoline in all of asia is $16 which is absolutely false. In Hong Kong (where you pay the highest cost at the pump for gasoline in Asia) it's roughly $8.50 for a gallon of gasoline. (source: http://www.bloomberg.com/slideshow/2014-05-30/highest-and-cheapest-gasoline-prices-by-country.html#slide13)So where are they getting the $16 figure from? And mentioning contract prices, they make you think that's the price that a gas station is paying before taxes are tacked on, and before subsidies are baked in. The price in China vs Hong Kong is a great example, taxation and whatnot make up the vast difference in prices that someone pays, you think that the contract price (the price that someone with a tanker full of gasoline) can sell it in Hong Kong is really twice as much as they can charge in China?

 

No, for the most part, the differing gasoline costs we pay are due to taxes and subsidies, shipping makes a big difference as well, but that's to cover transport costs from the refinery to the gas station, Hawaii for instance is going to be kind of expensive to ship gasoline to and they'll pay more for it at the pump than we will in Houston. Do you think that a refinery can make more money selling it to a gas station in Hawaii than in Houston? No, if the gasoline would magically just transport itself from refinery tank to gasoline station tank, less taxes and subsidies, they'd pay the same in Hawaii as we pay in Houston.

 

Educate yourself, those gasland movies are fun to watch and help us imagine how the dystopian mad max like futures might pan out, but they should be taken with a grain of salt, and always watch the credits to see who paid for funding of the movie. Verify the sources, do all that stuff, cause you won't look intelligent citing a movie (even if they get to call themselves a documentary) as a source.

 

Here's a real source, and if you take the time to read each slide, you get a really good idea why the costs are so disparate across the world:

 

http://www.bloomberg.com/slideshow/2014-05-30/highest-and-cheapest-gasoline-prices-by-country.html#slide1

[august948]

Way to ignore the point I was trying to make completely.

 

Way to ignore the point I was making...completely.

 

[Slick Vik]

I have two problems with this quote. It's disingenuous. It makes you think that the contract price of gasoline in all of asia is $16 which is absolutely false. In Hong Kong (where you pay the highest cost at the pump for gasoline in Asia) it's roughly $8.50 for a gallon of gasoline. (source: http://www.bloomberg.com/slideshow/2014-05-30/highest-and-cheapest-gasoline-prices-by-country.html#slide13)So where are they getting the $16 figure from? And mentioning contract prices, they make you think that's the price that a gas station is paying before taxes are tacked on, and before subsidies are baked in. The price in China vs Hong Kong is a great example, taxation and whatnot make up the vast difference in prices that someone pays, you think that the contract price (the price that someone with a tanker full of gasoline) can sell it in Hong Kong is really twice as much as they can charge in China?

No, for the most part, the differing gasoline costs we pay are due to taxes and subsidies, shipping makes a big difference as well, but that's to cover transport costs from the refinery to the gas station, Hawaii for instance is going to be kind of expensive to ship gasoline to and they'll pay more for it at the pump than we will in Houston. Do you think that a refinery can make more money selling it to a gas station in Hawaii than in Houston? No, if the gasoline would magically just transport itself from refinery tank to gasoline station tank, less taxes and subsidies, they'd pay the same in Hawaii as we pay in Houston.

Educate yourself, those gasland movies are fun to watch and help us imagine how the dystopian mad max like futures might pan out, but they should be taken with a grain of salt, and always watch the credits to see who paid for funding of the movie. Verify the sources, do all that stuff, cause you won't look intelligent citing a movie (even if they get to call themselves a documentary) as a source.

Here's a real source, and if you take the time to read each slide, you get a really good idea why the costs are so disparate across the world:

http://www.bloomberg.com/slideshow/2014-05-30/highest-and-cheapest-gasoline-prices-by-country.html#slide1

The price that was being referred to was natural gas not gasoline

[H-Town Man]

Its not supposed to have an impact on US gas prices. Its against the law to export unrefined crude from the U.S. The oil from the Keystone pipeline would have been refined in the Houston area and shipped abroad. It would have provided jobs and tax payments in the Houston and Beaumont/Port Arthur area.

 

 

Wish I could like this post about 5 times. I'm not a big Obama-hater, but his quote here was pure political spin. Oil could not possibly pass through the U.S. and out the Gulf without benefitting the U.S. The problem is, the parts of the U.S. that this most immediately benefits are probably below Canada on Obama's totem pole.

[Slick Vik]

The multifamily sector may be on shakier ground. Gilmer said there are 24,000 apartment units under construction but there may be a need for only 19,000 units next year. He predicted demand will continue to fall.

http://www.houstonchronicle.com/business/economy/article/Falling-oil-prices-cloud-the-forecast-for-Houston-5907720.php

[Slick Vik]

Long article about effects on Houston economy because of drop in oil

houstonchronicle.com/business/economy/article/Falling-oil-prices-cloud-the-forecast-for-Houston-5907720.php

[Avossos]

This is not the right section for this. This is not "going up"

[SMF]

"Gilmer didn't declare doom and gloom and he doesn't see the region losing a substantial number of jobs any time soon. But he does see a cooling off of a local economy that had grown white-hot as oil and gas production boomed amid higher prices and improved industry efficiencies".

Well, DUH! What idiot told you that booms last forever? It doesn't take a rocket scientist to know that the economy will cool eventually.

WRONG THREAD, WRONG EVERYTHING!

[Triton]

"Gilmer didn't declare doom and gloom and he doesn't see the region losing a substantial number of jobs any time soon. But he does see a cooling off of a local economy that had grown white-hot as oil and gas production boomed amid higher prices and improved industry efficiencies". Well, DUH! What idiot told you that booms last forever? It doesn't take a rocket scientist to know that the economy will cool eventually. WRONG THREAD, WRONG EVERYTHING!

Haha... well there was another thread somewhere on this forum a few months back where people thought the boom would last forever. That this was the new normal. Even without the fall in oil prices, this could have been seen a mile away. It's basic economics... . Based on the internal data I've seen, I think there will be a shift more towards buying rather than renting. As lending continues to improve, it just doesn't make sense to rent for $3600 a month when monthly payments for a mortgage will hover not too far from that number. Not worried about a crash but this market will not be as red hot going into 2016 (yes, 2016).

[august948]

Long article about effects on Houston economy because of drop in oil

houstonchronicle.com/business/economy/article/Falling-oil-prices-cloud-the-forecast-for-Houston-5907720.php

 

 

Gilmer didn't declare doom and gloom and he doesn't see the region losing a substantial number of jobs any time soon. But he does see a cooling off of a local economy that had grown white-hot as oil and gas production boomed amid higher prices and improved industry efficiencies.

 

 

"Certainly the economics aren't as good as they were a month ago, but the overall trend is still positive for our country," said John England, vice chairman and U.S. oil and gas leader for consulting firm Deloitte. "The fact is we have a lot of oil we can produce economically at current price levels and there are many plays that work at lower price levels than today."

A report this week from BBVA Compass said that because the Houston and Texas economies have diversified over the last 30 years, they don't risk the same level of pain suffered during the oil bust of the 1980s.

 

 

While the dropoff may force hard decisions on oil executives, Gilmer said refineries and petrochemical makers have benefitted from cheaper oil, a key raw material for producing gasoline, diesel and chemicals used in plastics and other goods.

Another beneficiary, he added, is the retail sector that is almost certain to gain as consumers find themselves with extra money in their pockets due to the slide in gasoline prices.

Residential and commercial real estate are caught somewhere in the middle. The single-family industry is likely to remain steady, Gilmer said, as demand still exceeds supply and will continue to drive up prices. For example, he estimated some 10,000 families are seeking houses but either cannot find one or cannot afford the ones on the market.

 

http://www.houstonchronicle.com/business/economy/article/Falling-oil-prices-cloud-the-forecast-for-Houston-5907720.php

 

We'll be just fine...and with cheaper gas prices it's easier than it's been in years to live off the Grand Parkway.  Look for a boom in suburban house building to meet the pent up demand.  It's a win for us either way.

[Slick Vik]

The rental market will fall first. Housing market will take longer since there is still more demand than supply, 10,000 is the number right now. Another side effect is all these projects that haven't started, some of them won't happen.

[august948]

The rental market will fall first. Housing market will take longer since there is still more demand than supply, 10,000 is the number right now. Another side effect is all these projects that haven't started, some of them won't happen.

 

Some projects will get delayed and more houses will get built, probably out in the suburbs.  Rents on apartments will go down.  Driving will be cheaper so we can do more.  Oil and gas will keep flowing.  Not too bad for a correction.

 

[toxtethogrady]

HBJ has a different take on all this:

 

http://www.bizjournals.com/houston/news/2014/11/21/report-houston-apartment-rents-will-continue-to.html

 

According to Transwestern, vacancies are down to 9%, and rents are way up. This might be the big reason Class A's are more vacant than B and C properties.

 

The absorption rate is still 20,000 units a year, so that would take care of everything either under construction or proposed in two years. 

[august948]

HBJ has a different take on all this:

 

http://www.bizjournals.com/houston/news/2014/11/21/report-houston-apartment-rents-will-continue-to.html

 

According to Transwestern, vacancies are down to 9%, and rents are way up. This might be the big reason Class A's are more vacant than B and C properties.

 

The absorption rate is still 20,000 units a year, so that would take care of everything either under construction or proposed in two years. 

 

By which time the current oil price correction might well be over.  We'll see how long the Saudi's can keep it together.

 

[toxtethogrady]

Bloomberg's panel of experts think it's a 50/50 proposition - 10 think supply will be cut next week, 10 think nothing will happen.

 

WTI is at $76 a barrel this morning.