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The heart of the U.S. oil industry, Houston, should be ready to position itself as a leader in the energy transition as climate change concerns will change the industry over the next years, Bobby Tudor, chairman of Tudor, Pickering, Holt & Co, said at the annual meeting of the Greater Houston Partnership civic group.
Tudor, Pickering, Holt & Co has been one of the main financiers to the oil and gas industry in Houston.
“The Energy Industry has been very, very good to Houston,” Bobby Tudor said in his speech.
Currently, around 4,600 energy companies are located in Greater Houston, and the industry directly employs 250,000 workers and many more people are indirectly employed by the oil and gas sector, the banker said.
“Oil and Gas production and consumption are not disappearing anytime soon,” Tudor said, but was quick to note that the oil and gas industry is “not likely to be the same engine for growth in Houston for the next 25 years that it’s been in the past 25 years.”
The oil industry has been demonized amid the climate change concerns, and Houston, as the city which gets more than one third of its gross domestic product (GDP) from the industry, should lead the way to a transition to a cleaner and lower-carbon world, according to Tudor.
“Coupled with poor financial returns, climate change concerns have the industry dramatically out of favor at the moment, in most every corner of the investing and political world,” he said.
“We should use our convening power, and the authority that comes with being business leaders, to rally our companies, political leaders and fellow citizens to position Houston as the city that will lead this energy transition,” Tudor noted.
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Due to the slowdown in U.S. shale production growth, the number of jobs in the Texas oil and gas industry has dropped recently.
Houston’s economic outlook is now somewhat dimmer than a few months ago, mostly because of a credit squeeze in the U.S. oil sector, Robert W. Gilmer, Ph.D., from the University of Houston’s Institute For Regional Forecasting wrote last week.
Yet, even with the growing number of bankruptcies and delistings in recent months, “Our bottom line is that while recent events are serious for the fracking industry, they are likely to prove less serious for Houston’s economic outlook,” Gilmer said.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.