Texas’ largest city is staring at some bleak economic numbers according to Texas Monthly. With oil and gas prices falling and Houston not being known as an innovation hub, some economists are wondering what will prop up the Houston economy in the near-term. It certainly is not a tourist destination. As Red has remarked, one of the worst things about Houston is no one ever comes to visit you and one of the best things about Houston is no one ever comes to visit you.
One interesting point the TM article makes is how the University of Houston led by Tillman Fertita (billionaire owner of bad restaurants and crappy resorts) and State Sen. John Whitmire killed off the University of Texas’ planned expansion on a 300 acre site just south of Loop 610. That project would have been a major engine of economic growth for the city, but was shit-canned because UH was afraid of any real competition. Maybe rightfully so. For a city of almost 5 million to have only two major universities (UH and Rice) and a smattering of smaller second or third tiers (TSU, HBU, St. Thomas, UH-Downtown) is almost criminal and clearly has held Houston back compared to other areas who apparently value higher education. Good work in protecting your turf at the expense of your community guys!
From the Annals of the Wildcatters – In 1901, the first Spindletop well came in near Beaumont. The site had been the object of speculation since the early 1890s, mostly by amateur geologist Patillo Higgins who was convinced there was a large pool of oil under a salt-dome formation south of Beaumont. He and his partners founded the Gladys City Oil, Gas and Manufacturing Company but never brought in a successful well. In 1899, Higgins leased a tract of land at Spindletop to mining engineer Anthony Lucas. The Lucas well erupted on January 10 scattering the oil hands as drilling pipe was blown out of the hole, followed by mud, gas and a 100 foot gusher of oil. It took 9 days to cap the well. This started the Spindletop boom. Within a year, there were almost 300 active wells at Spindletop and hundreds of oil exploration and land companies operating in the area. Companies such as Exxon, Texaco and Mobil got their start at Spindletop.
From the Annals of the Wildcatters – In 1928, Carl G. (the Big Swede) Cromwell completed the world’s then-deepest oil well. Cromwell had brought in the famous Santa Rita No. 1, Cromwell in 1923 on University of Texas land in Reagan County, but was at heart a wildcatter. Together with company engineer Clayton W. Williams, Cromwell was visionary in wanting to drill deeper than the current limit of around 3,000 feet. In 1926 Williams located a site on UT land and Cromwell’s crews began work. The work was slow and by November of 1928, he was ordered to shut down in the face of rising costs and technical issues. He ignored the order, went into hiding, and kept drilling. The University 1-B came in at an astounding 8525 feet. It remained the world’s deepest oil well for another three years.
From the Annals of Big Oil – In 1911, the Magnolia Petroleum Company was founded. The MPC was an unincorporated joint-stock association comprised of several other companies including primarily the John Sealy Company of Galveston. In 1931, Magnolia became an affiliate of Socony-Vacuum Oil Company. The Magnolia Petroleum Company merged with Socony Mobil Oil Company in 1959. Its operations became part of Mobil Oil Company, an operating division of Socony Mobil.
From the Annals of the Wildcatters – In 1928, Carl G. (the Big Swede) Cromwell drilled the world’s deepest oil well. Cromwell was the drilling superintendent of the Texon Company. Texon was working the rapidly expanding field on University of Texas land in Reagan County. He also acquired his own leases and became known as an honest, generous, free-spirited wildcatter. In association with company engineer Clayton W. Williams, Cromwell experimented in drilling deeper than the average 3,000 feet. In 1926 Williams located a site and Cromwell’s crews began work. In late November 1928, because of mounting expenses and problems, Cromwell was directed to shut down. Instead, he disregarded orders, went into hiding, and kept drilling. On December 4, the well came in at 8,525 feet. It was the deepest oil well in the world for another three years.
From the Annals of the Boomtowns – In 1907, citizens of Peck renamed their community Tomball in honor of former U.S. Congressman Thomas Henry Ball. Ball was strong supporter of the development of the Houston Ship Channel and a renown prohibition advocate. Tomball later rose to prominence in 1933 when drillers struck oil. The population of Tomball tripled as numerous oil and gas operators moved in and set up worker camps, and built new housing and recreation facilities. In 1935, Humble Oil and Refining Company granted free water and natural gas to Tomball residents in exchange for drilling rights within the city limits. Ball’s influence is still seen today as parts of the town remain dry.
Photo of Thomas Ball Statue from tripddvisor.co.uk.
Forbes reports on the importance of Texas oil and gas production to the nation as a whole and begs the question if the so-called Texas miracle would have occurred in any state so fortunate as to have the oil and gas reserves that underlie Texas soil.
“The Texas Miracle” is being built on oil and natural gas. Thanks to hydraulic fracturing (“fracking”) coupled with horizontal drilling, Texas crude oil production has tripled since 2010, and gas output is up 15%. Every day, Texas now produces 3.6 million barrels (b/d) of crude oil and about 22 billion cubic feet (Bcf/day) of natural gas. Texas now accounts for nearly 40% of U.S. crude output, compared to less than 20% in mid-2009, and over 30% of our natural gas. Texas is the source of ~55% of the incremental U.S. oil production since 2008 that has transformed the international market. Texas’s shale oil revolution has been launched by the Eagle Ford play in South Texas and the Permian Basin in West Texas, constituting more than two-thirds of U.S. shale output in April. Texas now yields more oil than Iran or Iraq and more natural gas than any nation except Russia and the U.S. as a whole. About half of all rigs actively exploring for or producing oil in the U.S. sit in Texas.
The importance of the Texan energy juggernaut can only increase. Texas has 11 billion barrels of proven oil reserves, 31% 0f the national total; and 90 Tcf of proven natural gas (a doubling since 2003), 26% of the national total.
Which also begs the question of why we aren’t hearing about the “North Dakota Miracle”? Red loves Texas, but doesn’t like folks (ahem Rick Perry) taking credit for a “miracle” that they had nothing to do with.