Energy’s resurgence leads a year of healing for Houston’s economy

For the better part of 40 years, Houston has had an uneasy — some might call it love-hate — relationship with oil. Since the epic oil bust of the 1980s,the region has searched for something, anything, that would break the oil and gas industry’s lock on the local economy.

Health care, technology and space exploration found their way into the economic development hit parade over the years. Meanwhile, as fire and floods highlighted the looming catastrophe that is climate change, investors, analysts and policy experts began writing off oil as a declining, if not dying, industry.

But as this year’s Chronicle 100 illustrates, oil is not dead yet. After a lackluster 2019 and crushing 2020, the oil and gas industry came roaring back in 2021, dominating our list of top-performing companies. Across the board, energy companies tripled or quadrupled earnings per share, doubled revenues or came close to it, and delivered more than healthy returns to investors.

This oil boom, however, has a different feel, helping to explain energy companies’ stellar results but also signaling another change in the industry’s evolving relationship with the local economy. Surging profits are going into investors’ pockets rather than new drilling projects or a burst of hiring, reducing oil’s role as an economic engine. For example, after years of retrenchment, no energy company cracked the list of the region’s top 10 employers.

Despite the dominance of the energy industry, this year’s edition of the Chronicle 100 captures the diversity of Houston’s business community, exploring the rich array of private companies, the advances in the health care industry, the strength of the banking sector, and the challenges ahead for homebuilding. It provides a treasure trove of data, industry trends and company profiles.

And wait, there’s more.

We’ll also have bonus coverage in Monday’s Texas Inc. including an exclusive interview with Ryan Lance, CEO of the No. 1 company, ConocoPhillips.

All in all, 2021 was a year of healing for the local economy as Houston again proved its resilience. While only 82 companies met the criteria to qualify for the Chronicle 100 — which starts with making a profit — that’s far better than the 56 in 2020. As for 2022, war, inflation and rising interest rates will provide new tests for local companies, but if the last few years show anything, Houston will adapt, adjust and ultimately prosper.