What does the future hold for the energy industry?
Happy New Year from Texas Inc.
We kick off 2020 with an issue that looks at the changes, challenges and advances that have shaped — and are still shaping — Houston’s most important industry. The energy sector is coming off a year when prices stagnated, investors turned away and companies cut back, despite a rally, aided by escalating tensions with Iran. All that has pushed oil above $60 a barrel.
Todd Staples, president of the Texas Oil and Gas Assocation, known as TXOGA, provides some perspective in an interview with Sergio Chapa that focuses on the trade group’s 100 years representing the state’s energy sector. Staples notes that the oil and gas industry has weathered more than its share of ups and downs, only to adapt, move forward and continue to pump billions of dollars into Texas’ economy and support hundreds of thousands of jobs.
Over more than a century, Staples says, the oil and gas sector has transformed the state and nation, creating the type of opportunities that have moved families from poverty into the middle class. Despite growing concerns about climate change and pressure to dramatically cut back on fossil fuels, he sees the future as bright for the industry, noting, among other things, that a variety of consumer goods and industrial components — including those used in solar panels and wind turbines — are derived from oil and gas. The industry, he said, continues to invest in practices and technologies to reduce its environmental impact.
Chapa and contributor Rafa Farihah take their own look at technology, profiling digital workers who are becoming a larger and increasingly important part of the oil and gas industry’s workforce. Instead of roughnecks and roustabouts in flame-retardant overalls and boots, a new cohort of tech workers is coming to the office in jeans, hoodies and designer shoes. Energy companies are making a major push to digitize and automate operations to reduce costs in the face of lackluster oil prices, and that push is driving the growth of six-figure tech jobs in oil and gas.
The industry is going to need all the help it can get, writes our columnist Chris Tomlinson. Technology and ingenuity have made the United States the world’s biggest oil producer, Tomlinson argues, but the problem — which is only likely to get worse — is the world just doesn’t need all the oil that energy companies are pumping in Texas and around the globe.
From passenger cars to cargo ships, transportation is getting more fuel-efficient and consuming less petroleum. Ant that’s not even considering the spread of electric vehicles.
“Industry optimists argue that growing demand will soak up the current surplus,” he writes. “They have been wrong for the past five years and are still wrong.”
Which brings us to another conundrum for the industry. Drilling activity is declining in the Permian Basin and other U.S. shale plays, but production keeps rising. In 2020, the United States is on track to produce more oil than any nation ever has, topping 13 million barrels a day. But, Jordan Blum asks in his reporter’s notebook, will that be a lucky number for the industry?
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