Houston strong

Sept. 18, 2017
Last week marked the return of OGJ staff to its Houston office after the building was knocked out of commission by Hurricane and Tropical Storm Harvey. Most of the us were fortunate enough to have sustained only minor-if any-damage to our homes, which in turned served as our temporary offices for more than 2 weeks.

Matt Zborowski
Assistant Editor

Last week marked the return of OGJ staff to its Houston office after the building was knocked out of commission by Hurricane and Tropical Storm Harvey. Most of the us were fortunate enough to have sustained only minor-if any-damage to our homes, which in turned served as our temporary offices for more than 2 weeks.

Many of our readers and industry brethren were not so lucky. Tens of thousands of homes are estimated to have been lost because of the “biblical” event that produced more than 50 in. of rainfall in some areas.

Industry's home

The Houston area, home to 6.5 million people, is arguably the world's oil and gas capital. Scores of US operators are headquartered in the city, and almost every major international oil company has an office here. It also serves as a major refining and petrochemical production hub for the US and abroad. Of the 22 Fortune 500 companies headquartered in Houston and The Woodlands, 15 lie somewhere on the oil and gas supply chain.

In addition to the well-documented drop offs in refining capacity, petrochemical operations, and oil and gas production in the Gulf Coast region, worktime and workflow were disrupted for engineers, geophysicists, geologists, and thousands of other essential personnel throughout the city as their offices also took on water and subsequently closed for repairs, including those of BP PLC and ConocoPhillips. (Hats off to the personnel who found ways to work through it all, including their own losses, to restore Gulf Coast operations, as well as the companies donating millions for the recovery efforts.)

And this is a city that was beginning to rebound after suffering through the doldrums of the recent oil-price collapse. Long heralded as a model of economic growth and prosperity, the Houston-The Woodlands-Sugar Land metropolitan statistical area's July unemployment rate was 4.9, which was higher than the national average of 4.6 and tied for 232 among US metro areas, according to preliminary data from the US Bureau of Labor Statistics.

As with the industry downturn, Harvey has impacted almost everybody in the area either directly or indirectly. You may not have lost your job as prices plunged, but you almost certainly know someone who has. You may not have lost your home because of high water, but you likely know someone who has. In some cases, you may know people who have suffered through both. Everyone here has suffered to some degree.

Forward facing

However, the reports of Houston's demise are greatly exaggerated. The area's July unemployment rate was nearly a full-point higher compared with its July 2016 rate, even with the still-volatile markets. According to the US Bureau of Economic Analysis, Houston had a gross domestic product in 2015, the first full year of the industry downturn, of $503 billion, which is comparable to Norway's GDP.

Those figures are a testament to the one-of-a-kind enterprising spirit and resilience of both the city and the industry, which almost always experience good times and bad times together.

Houston is home to the modern captains of industry who quickly figured out how to find oil and gas more efficiently and produce it at a fraction of the cost compared with a few short years ago. It's home to those who immediately leveraged the shale gas revolution to expand an already formidable petrochemical producing region while giving it a major presence as an LNG exporter less than a decade after it was preparing for LNG imports. The city has nurtured an environment where the ambitious-and the industry-can thrive.

This isn't to say Houston isn't without its obvious flaws in leadership and infrastructure. They've been well-exposed. Overbuilding in flood-prone areas certainly exacerbated the disaster and needs to be reversed. But we'll adjust and come back better than before.

It will take a lot more than a 1,000-year flood event and an all-time industry slump to sink Houston.