Brandt's Notes

Here we continue our series which asks:  "what will happen to Houston, the energy capital of the world, if the response to climate change requires us to move away from oil and gas".  In previous posts, we took seriously the claim that Houston could end up like Cleveland, a once booming industrial city whose population has been on a downward spiral for several decades.  One question was why would major companies leave a metro area taking jobs with them, like with Cleveland ?  Here we explore this question in detail.  -- Let’s assume oil and gas declines as a proportion of energy consumption globally over time.  What will happen to the major companies that extracted, refined, and distributed it for so long?  As of 2022, Houston is home to about 25 “Fortune 500” companies.  About half of those are in the oil and gas business.  In total about 5,000 energy firms are in Houston and about 31% of all US jobs in oil and gas are there as well.  Th...

Speak to any Houstonian about the threat of climate change to the city and you'll get a similar response: Houston's economy isn't based on oil like it once was.  It's diversified.  We have the medical center, we have many Fortune 500 companies, NASA, the shipchannel, as well as manufacturing and retail.  The city survived the oil price slump of the 1980s and came out better for it. But was it enough? Maybe not,  according to the Dallas Fed .  Looking at employment change percentages, author Jesse Thompson points to the areas of most significant decline during the pandemic: oil/gas, construction, manufacturing, and information services fared the worst.  That oil and gas (and support industries) still make up 1/3rd of employment in the Houston metro area, and that it alone accounts for nearly that percent in wages is evidence to it's continued importance. Further, the charts he presents show how many of these lost jobs in the pandemic (1/5th of all those in o...

  " The city of Cleveland has had a colorful history. The Cuyahoga River, which runs through the city, famously caught fire in 1969 thanks to rampant pollution, and it wasn't the first time. In 1978 it became the first U.S. city to default on its debts since the Great Depression. Cleveland sports fans have had to endure more anguish than those in any other city. The city has been dubbed with a less than endearing nickname: the Mistake by the Lake.  This year Cleveland takes the top spot in our third annual ranking of America's Most Miserable Cities. " -Forbes Magazine, 2010 This post is part of a series on the future of Houston, Texas (the "energy capital of the world") as it faces climate change and a changing world economy. In the last post I started analyzing a claim that Houston may end up like Cleveland, a city that once was among America's largest but has now shed more than half of its population in the last 50 years. The two major trends worth con...

"Whatever else it may become, Houston will still be an oil and gas town for many years. Detroit still manufactures cars. Pittsburgh still makes steel. Plenty of U.S. cities have accepted that their best years are behind them and supplemented their legacy industries by finding a new economic equilibrium—one based to a great degree on, say, health care, higher education, a port, and a NASA facility. Cleveland, for example. I’m describing Cleveland. But who wants to live in Cleveland? " -Evan Mintz, Texas Monthly In my last post, I discussed two differing views on Houston's future.  One predicting that Houston's fortunes will reflect the country as a whole (a "prophetic" city).  Another where Houston will be particularly hard hit by climate change and our economic response (a "pathetic" city).  The author that posed the latter, Evan Mintz, suggested in the quote above that Houston may level out like rust belt cities before it; more specifically, Houst...

My wife and I lived in New York City during Covid.  Or at least in the New York Metropolitan area.  We, like many other big city dwellers, had our long commutes set to pause once public gatherings were prohibited.  And we, like many others, realized how unsustainable our prior work life had been.   Once Covid began to wain it became obvious that we were not prepared to go back to life as it was before.  As a result, I began to look into work in other places with shorter commute times, lower cost of living, and better overall quality of life.  The first offer I received was in Houston. I grew up in Houston.  Or at least in the Houston Metropolitan area.  I, like many other big city dwellers, grew up in the suburbs.  In my case it was the middleground between the city limits of Houston and a far western suburb of Katy.  Moving back to Houston, we didn't want to live so far out and my wife and I hoped to preserve our identity as urbani...

I've recently started a new job.  This put a brief pause on posting research, but it did not slow the research itself.   Since my last post I've become increasingly interested in understanding the future of Houston.  This should be no surprise as it is my home town and I've recently moved back after a decade in New York City.  Moreover, it is the "energy capital of the world!" given its position refining and shipping oil and gas for the past century.  Assessing its future is a serious endeavor in light of our changing climate, politics, and economy. The hope for this series is to start with big questions (will Houston decline like the rust belt? will oil companies stay when oil is no longer the primary energy source?) and end with more detailed questions.  That way I can cycle through major topics, then cycle back through minor topics as the interest arises. If possible I will attempt to circulate posts into avenues to promote discussion, but one step ...

I've completed the first round of this series.  I've read the first issue of the premier financial economics journal ("The Journal of Finance"), summarized its contents, assessed their value for society at large, and even took a few notes on technical concepts that came up in each. This journal issue included 10 articles in total.  The topics covered included: 3 on corporate finance (articles 5, 6, 7) 2 on personal finance (articles 2, 4) 2 on information (articles 8, 10) 1 on the environment (article 1) 1 on financial products (article 3) and 1 on financial markets (article 9) I rated each by the apparent social value of the authors topic, methods, and conclusions from 1 to 4 stars.   None were rated 4-stars,  1 was rated 3-stars,  3 rated 2-stars,  and 6 rated 1-star. Overall the experience reading and rating these articles was at times exhausting and infuriating, but almost always stimulating and challenging.  It was like dropping into a conver...