Houston Chronicle. Oct. 31, 2014.
Petroleum panic: The drop in oil prices should refocus Houston's goals on long-term stability
The air is coming out of the balloon. It feels more like blood draining from our face. The price of oil is plummeting, and we're getting flashbacks to 30 years ago. Are developers building skyscrapers that will sit empty? Will those Inner Loop apartment complexes go Gulfton? Is this panic just an overreaction?
Petroleum industry analysts say that things are different this time. Fracking wells have a shorter lifespan than traditional oil wells, meaning supply can naturally shrink to accommodate demand instead of flooding the market. Long-term contracts and proper hedging will prevent any sudden corporate collapse. Cost-cutting and new efficiencies mean that many wells can remain profitable even if oil continues to drop.
Plus, Houston's economy is more diverse than during the early 1980s. This time, it is different.
Famous last words.
The boom hasn't gone bust, but the recent drop in the price of oil is like an attack of angina that should serve as a warning to keep an economically healthy city. Houston leaders need to start now, when times are good, to fortify against any downturn.
First, encourage entrepreneurs. Back in 1985, the Chronicle wrote that the Texas Medical Center was fertile ground for technological innovation, yet research institutions did not understand the commercial value of their work and lacked venture capital. A report from the Brookings Institution said the same thing in 2005. Apparently, Houston did not make much progress over those 20 years.
Now we're playing catch-up. Earlier this month, the Texas Medical Center's new business startup accelerator opened with the goal of encouraging startups by providing lab and office space, in addition to support staff and access to investors.
The accelerator, called TMCx, has already attracted Johnson & Johnson Innovation, a development arm of the global pharmaceutical and health-care product company. Houston is finally learning how to capitalize on what we do well, and our city needs more projects like this.
Second, pursue and protect federal programs. Houston competed in the mid-1980s to be the home port for a reactivated Battleship Wisconsin, hoping to attract jobs and government funding to fill our economic gaps. These days, Houston is on more of a defensive footing. Cuts to NASA have gutted the Johnson Space Center. We need an engaged delegation in Washington, D.C., that will ensure Houston remains Space City. The federal government is also responsible for dredging dollars that will keep the Port of Houston in prime shape, especially for the new extra-wide Panamax ships.
Third, invest in education. Through booms and busts, universities attract the best and brightest. College campuses pump millions, if not billions, into the local economy and provide thousands of jobs. They serve as cores of innovation and economic engines that are practically recession-proof. We're listed as a top city for students but lag in the number of scholars per capita. According to the American Institute for Economic Research, the Houston area has only 70.5 college students per 1,000 residents. In contrast, Minneapolis has 74 students per 1,000 residents, Los Angeles has 88.7 and Boston, at the top of the list, has 94.5.
Who among Houston's current billionaires will be the next William Marsh Rice and found a new institution of higher education? Who will be the next Hugh Roy Cullen and help take the University of Houston to the next level?
A leaky balloon is better than a pop and a faint feeling is preferable to a heart attack, but Houston ignores these warning signs at our own peril.
We have plenty of issues today that City Hall needs to address, from budget pressure to potholes. But the spectre of another oil bust should frighten local leaders into keeping their eyes on our city's long-term stability.
Midland Reporter-Telegram. Oct. 20, 2014.
If a slowdown — not a bust — does come, there is a silver lining
If the latest oil price analysis is correct, our readers can expect a continuation of the oil price drop we experienced recently. We also can expect a slowdown in the economy.
And to this, we just have one thing to say. Do not panic.
We expect calmer heads will prevail, especially in oil headquarters across Midland. As we reported, those with strong balance sheets will survive. We expect there are plenty of those around here.
When we say don't panic, we're addressing not just the companies, but also government and the community. Maybe our glass is too half-full, but we believe someone has thrown our community a get-out-of-jail card. The possible slowdown just might provide an opportunity for Midland to play catch-up, and anyone who has experienced life in Midland over the last few years, knows that isn't a bad thing.
Government can do its part when it comes to housing or infrastructure. The slowdown has provided some relief, but only if we make the right decisions. The August Bureau of Labor Statistics report showed nearly 4,000 people coming into the city during the previous 12 months. If we see a drop in that number, what's the harm? We know that Midland doesn't have sufficient inventory for the number of people who live here right now. We know our roads and other infrastructure are inadequate for the current population.
For some, the instinct will be to react to the economic conditions and be cautious, probably too cautious. People will wonder why additional projects should be approved if the price of oil drops. In our view, we have been given a gift. This community will continue to grow. So even if there is a slowdown, we should keep our foot on the gas, build the housing that is needed and continue planning for the years ahead.
This community should not take its eye off the ball when it comes to secondary education. There are fixes that need to be made, and a possible slowdown doesn't change that. We don't know what any secondary bond plan will look like or when it might be proposed. If it puts Midland in the right position for decades to come, then it should provide for a vigorous debate.
Lastly, we believe a possible slowdown is not a sign of a bust. It would help if oil industry leaders could confirm what it is we are communicating in this space. The residents of Midland, rightfully, trust what business leaders say, first and foremost. It would pay dividends to hear from those leaders so our community doesn't take a detour from the path we are on today.
The Dallas Morning News. Oct. 27, 2014.
Don't treat Ebola-fighting heroes as criminals
The mandatory quarantine rule that New Jersey Gov. Chris Christie imposed Friday to combat the spread of Ebola underscores the need to keep politics out of this important public health issue. Policy decisions on Ebola should be based on science, not fear.