Global Energy Capital
Houston is internationally recognized as the global energy capital, with virtually every segment of the energy industry represented in the region. It is also known as the global center for integrated power, a fast-growing new sector of the energy industry. In just over a decade, the number of Houston-based energy trading companies has tripled, with petrochemical capacity in the area nearly four times larger than the nearest competing U.S. site. All major oil and gas companies have extensive operations in the area, including ExxonMobil, Chevron, BP America, Citgo, Conoco, Phillips66, Shell Oil Company, BHP Billiton, El Paso Corp., TOTAL, BG Group, LyondellBasell, Halliburton, Occidental Petroleum, Petrobras, Marathon Oil, Anadarko Petroleum, Transocean, Apache, Hess Corporation, Newfield Exploration, Enterprise Products Partners and Plains All American Pipeline.
According to BP’s 2018 Statistical Review of World Energy, global primary energy consumption increased 2.2% in 2017, up from 1.2% in 2016 and the highest since 2013. North America consumed 20.5% in 2017 while Europe and Eurasia’s consumption was 21.8% and Asia Pacific consumed 42.5%. Based on the report, oil remains the world’s leading fuel. In 2017, 34.2% of global energy consumption was oil, followed by coal at 27.6% and then by natural gas at 23.4%.
The U.S. Energy Information Administration’s (EIA) Annual Energy Outlook released in January 2018 predicts that the U.S. will become a net energy exporter in 2020 and will remain so through the projection period 2050. Further, increasing energy efficiency across end-use sectors will keep U.S. energy consumption relatively flat even as the U.S. economy expands. Also, natural gas and NGPLs will have the highest production growth of all fossil fuels. NGPLs will account for almost one-third of cumulative U.S. liquids production during the projection period.
West Texas Intermediate crude oil prices increased from $50.80 per barrel in 2017 to $65.23 per barrel in 2018. The EIA projects $62.79 per barrel for 2019.
The Henry Hub natural gas prices are projected to rise from an average of $3.10 per MMBtu in 2017 to $3.27 per MMBtu in 2018. The EIA projects an average of $2.89 pe MMBtu for 2019.
The U.S. rotary rig count increased annually by 16.6% to 1,083 rigs in December 2018, from 929 in December 2017. U.S. upstream oil and gas capital expenditures increased 23% in 2018 and is only expected to increase 2% in 2019.
This Global Energy Capital overview is part of the annual 2019 Houston Economic Outlook.
Sections covered in the full report include:
Population Growth | Employment Sector | Business Climate | Global Energy Capital | Petrochemical & Plastics Industry | Port Houston | NASA/Johnson Space Center | Mobility Infrastructure | Airport System | Texas Medical Center | Biosciences & Biotechnology