Houston: The Green Frontier

The oil capital of the U.S. looks to greener pastures

BUS_GreenHoustonaEverything is bigger in Texas — including the thriving oil industry that, for the U.S., is headquartered in Houston. While traditionally known as the oil and natural gas capital of the nation — with 12 of the nation’s top 20 oil pipelines holding corporate or divisional headquarters or ownership interests — Houston is transitioning into the green space, diversifying its energy sources and creating green opportunities for small and large businesses.

“Houston businesses—including oil and gas companies—realize that alternative energy is the future, and that, far from being a threat to their business, it can be a major growth opportunity,” says Sen. Rodney Ellis. “Many of [the businesses] are laying the groundwork for alternative energy.”

Houston is home to 10 of the top 25 publicly traded oil and gas exploration and production firms, one of which—Shell Oil Company—has a Houston-based wind energy division that is working with Texas Utilities power company to build a 3,000 megawatt plant in West Texas. Though Shell makes a vast majority of its revenue from oil and does not expect this to change any time soon, the company has invested more than $1 billion in renewable energy over the last few years.

Many of the city’s green initiatives are contracted out to more established, large businesses, Ellis says, but small business owners now have the opportunity to win these contracts, too.

Small businesses will be helped by recent legislation that establishes the first statewide green jobs program. The program will set up a framework for training workers for the clean energy economy, which will provide local businesses with the skilled workers they need in order to get a piece of the alternative energy pie.

The move is crucial since the energy industry accounts for 48% of the region’s economic base employment.

“We feel like [Houston is] pretty much laying a platform to lead the nation when it comes to this greening of communities,” says Tracye McDaniel, executive vice president & COO at the Greater Houston Partnership. GHP, a membership organization made up of local businesses, formed the Energy Collaborative four years ago to look at various forms of renewable energy, how local businesses could take part in the new energy movement, and workforce development for training employees.

“I think what it becomes is an awareness building, a campaign to inform small businesses of how greening their business is more efficient,” adds McDaniel.

Ramon Manning saw that shift more than three years ago. Manning, president and CEO of Partners Energy Group, works on the commercial and marketing side of the energy business. He says a lot of industrial companies are looking to incorporate green practices into their daily operations. “I think it’s becoming another market,” he says, but does express concern for the long-term sustainability of this energy diversification once the initiatives fade out and the capital that enabled smaller businesses to operate in this space dries up.

“It’s capital intensive,” says Manning. “Without having some serious investors or capital lined up, foraying into the industry may prove difficult.” Where are the investment opportunities? “I see the investment opportunities [being in] the energy infrastructure space, risk management, fuel procurement market, and power grid upgrade,” says Manning. ”

Wind energy is probably the most stable of the alternative energy sectors, says Ellis. According to Emerging Energy Research, the wind energy industry is projected to grow 15% annually between 2007 and 2020.

“Our country having a very holistic energy policy is important, and we want to be leaders as far as what cities and this country can do to create a balanced energy policy,” says Daniels.

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