You’ve got to wonder if they call it Dezhou Chai in Shanghai.
That’s Mandarin for Texas Tea, by the way, and traders in China have set up their own pricing market for the stuff — crude oil.
This news should have those in the black gold industry seeing green.
The establishment of a new trading price shows how the growing Asia-Pacific markets are becoming a key part of the global energy business — at least on the consumer end.
With oil nearing $70 per barrel and the 50th Offshore Technology Conference kicking off at NRG this week, booming growth in Asia offers yet another reason to feel good about Houston’s energy future.
Domestic exports have set a 25-year record and are expected to skyrocket over the summer. The United States is on path to be the world’s largest producer, and China has replaced us as the top importer. And whether the guys buying oil relax after work with a Lone Star or a chai tea, you can bet that Houston, as the energy capital of the world, played a role in the process somewhere along the way.
How long until the roles are reversed? It isn’t hard to imagine a future in which the energy industry is defined less by oil and gas than by renewables and batteries. Even some top producers are predicting that peak global demand for petroleum is only a few decades away. BP is pointing to the 2030s. Shell is predicting the late 2040s. Oil expert Daniel Yergin says that one-third of all U.S. cars will be electric by 2040. Global campaigns to prevent climate change will only accelerate the transition.
Decades may seem like a long time — until you imagine trying to convince 1980s coal country that it needed to worry about natural gas.
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At the rate things are going, eventually the energy capital of the world will move across the Pacific. An extensive 2017 report by the Institute for Energy Economics and Financial Analysis described how the Asian nation “will certainly be very comfortable providing technology leadership and financial capacity so as to dominate fast-growing sectors such as solar energy, electric vehicles and batteries.”
By that point, you won’t be able to turn on a light switch, drive a car or run a modern economy without China playing a role in the process. Houston’s expertise in oil and gas becomes an outdated skill-set — our city goes Rust Belt.
For the time being, Houston is still the energy capital of the globe, and probably will be for some time. We sit at a nexus of oil plays, pipelines, refineries and ports. But it’s more than mere physical location. We’re also the global center for technology and managerial experience in the energy industry. It’s a position that keeps our economy humming, and city growing, in a changing world.
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So consider this a friendly warning that things can change quickly, and Houston needs to ensure that we remain a global economic nexus. It means leveraging the skills and talents we already have to keep up with new industries, like retooling deepwater rigs for offshore wind power.
Projects like the TMC3 with its focus on biomedical research, and the Midtown innovation district’s promotion of tech startups, show that city leaders are moving in the right direction. The failure of the University of Texas data science center shows that it’s two steps forward, one step back.
And we’re still waiting for local investments in battery research, wind, solar and other new energy resrouces that can match international competitors.