Wednesday, October 23, 2019

Texas

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Of the several so called sunbelt states that have become favored locations for companies to relocate into, Texas was in the news lately because of an unlikely move by a French company, Louis Vuitton, to a small town just outside Dallas for its  100,000 square foot "workshop". Keene, TX, population 6,300, will be Louis Vuitton's new site - in a 256 acre former "dude" ranch. French billionaire, third richest man in the world, Bernard Arnault is staking part of his fortune in a small Texas town where Louis Vuitton products will be made and labeled "Made In USA".

Large, medium, small companies have been slowly migrating for quite some time now by moving either their whole companies or portions or branches of them into Texas. Growth in housing development and expansion of infrastructures had been steadily increasing even from decades earlier.  Lately though the pace can only be described as feverish. But this trend had a much earlier beginning.

In 1971, Shell Oil Co., with headquarters in New York city, where  several major oil companies were based, like Exxon, for example, made the very first bold move of a major corporation. The entire move took two years to complete beginning in 1969 at a '70's cost of 35 million dollars, which included one little dramatic highlight of loading several jumbo (747) air transport flights one weekend to move all office files and records in one fell swoop. Since then, the flood gates opened to all kinds of businesses, including Toyota's Tundra pick up truck factory in San Antonio. Austin, TX is now arguably dubbed the Silicon Valley of the southwest.

"Texas is the best state in America to start a new business, according to a new study conducted by WalletHub. The credit website analyzed each state across 26 indicators of startup success to determine its rankings. Texas topped the list with a total score of 61.05, ahead of Utah, Georgia, North Dakota and Oklahoma".

Among several categories which the above and other studies cited, Texas was no. 1 in business environment. Add to that lower corporate taxes, zero state taxes, reasonable sales taxes and more importantly - very low energy costs. We can talk about oil in a bit because Texas too is the palpable antithesis to the  Green New Deal. But later on that.

Meanwhile, for would be employees willing to move with their companies, or adventurous job seekers (who also come in droves), the attraction of low cost of living, absence of punishing regulations and a climate that was  best explained to me by the airport shuttle bus driver when I first set foot  on Texas soil almost four decades ago. He said, "We only have three seasons here: July, August and Summer". That was tongue-in-cheek funny, of course, but not too wildly inaccurate, by Texas standards where, "Everything is big in Texas" is as popular as its nickname, "The Lone Star" state.  But as to be expected from those who live in the northeast and  West Coast USA, they may most certainly make fun of the Texas heat to which Texans reply that not only can they take the heat they also know how to spell humidity. This takes me to a short side note of a personal story that was sealed by the Texas climate.

It was August 1979, when I flew in for a job interview while staying temporarily in New York. It may not have been the right time to emigrate as newly minted Green Card holders when the U.S. jobless rate was between 7-9 % (average '70's numbers). And rate of inflation was at 13%. It was a critical interview for me because there were my wife and two young sons  and me living temporarily with my wife's sister's family in Brooklyn. At that point the stack of rejection letters were already scrap-book-thick and a meager couple of interviews that were over the phone with no follow-ups. Though not quite in panic mode yet, the Texas interview floated much hope when the prospective company sent me a plane ticket and a confirmed reservation at the downtown Hyatt Regency.

Did I already mention it was August?  The morning after my host took me to breakfast, she led me to a series of interviews all morning long. By noon, three of the interviewers and the host took me to lunch. The downtown walk to the restaurant proved pivotal. There we were walking the hot pavement with that day's temperature in the mid nineties and a matching humidity of above 90%. And there I was praising how great the weather was. I must also have mentioned that when my family arrived that April, we left our homeland when it was 95 deg F in Manila. When we landed at JFK international, the frigid blast overwhelmed what would have been a typical culture shock of the expected kind for most immigrants. That day's temperature  of  54 deg F must have been balmy for New Yorkers but it was a 41 degree drop for us. I kept talking about that during lunch at the revolving restaurant at the Hyatt and my host and interviewers took crucial note of it.

A week later, I got a call from the company HR recruiter. He asked if I'd agree to another interview over the phone. It was not an easy interview over the speaker phone (of 1970's technology) simultaneously by two people I couldn't see, who were sitting in a regular office that was obviously not acoustically tuned for telephone job interviews. Furthermore, they represented an entirely different organization from the one I originally interviewed with. To be unprepared was an understatement. 

I got the job, followed by a series of many other assignments but remained in Houston until I retired. It is worth mentioning here that had I not talked so positively, if not glowingly, of the 90 deg day during my first visit, circumstances may have been a bit different. You see, the job I originally interviewed for was at a New Jersey location. When I left that day, the interviewers must have made a note that there was no way I was going to survive the northeastern winter. The company thought wisely to have me work in Houston.  The rest is history.

So, decades later, Texas weather has not cooled down one bit but its economy is sizzling hot. The ports of Houston/Galveston complex that used to share a good chunk of imported oil to be processed by a host of refineries within and outside the city limits, now exports 1.5 million barrels a day to various parts of the petroleum-consuming world.

Below is a quote from CNN Business last August, 2018: 


"Texas is now on track to produce more oil than either Iran or Iraq. That would make Texas No. 3 in the world if it were a country."

"The shale boom already made the United States a net exporter of natural gas in 2017. And the EIA recently predicted that the United States will become a net energy exporter in 2022. That achievement could come as early as 2020 if oil prices are high".

The above prediction was already achieved this year, in early 2019.

Having said all that, such fortune is as easily reversed as in one period of a day if in November 2020, the national election goes one particular way. And if one particular presidential candidate who vowed to end all fracking activities in his/her first day in office wins the election, such misfortune for the state and several others from Oklahoma to Louisiana to North Dakota, can only be described as more than catastrophic. The economic cardiac arrest for those states will be sudden and fatal. For Texas the depression to follow will be one insurmountable sinkhole.  For the country it will be one fatal single blow. One self-inflicted wound to an economy.  One unnecessary death of common sense.

Actually, it is quite miraculous for an industry to survive when much of what it had to deal with is fraught with constantly moving goal posts imposed by its detractors. Imagine an industry that keeps striving like a runner who sees the finish line constantly being moved farther and farther. But it is to be expected in any industry. Except that all industries, every single one, cannot do without energy. Energy that over ninety per cent of it is produced by an industry much maligned and vilified by forces of many faces past that today is fronted by a recent reincarnation with the same theme - to end the "scourge of the oil business" - that is now known as The Green New Deal.

All can be fair and well in a hotly contested issue if not for one side to be so blatantly hypocritical in a manner that is clearly defined by the all too selfish  dictum on the part of politicians and anti-oil proponents which is, "Do as I say, not what I do". Hypocrisy is when political candidates, leaders and luminaries behave counter to what they are preaching about. Certainly not by racking up a million dollars worth of private jet take off and landing on short trips in a 3-month period (for one candidate alone) while campaigning and championing environmental causes, or going to environmental conferences in flight after flight of private jets, met and driven around town by heavily armored limousines that guzzle hydrocarbon fuels by the bucketful every ten miles in heavy traffic self-created by the horde of conference participants from all corners of the earth. Keep in mind this hypocritical behavior is cloaked with what could only be an imagined fear of an existential threat repeated over and over. If true that the world will end in a horrible last gasp for clean air, why the heck then do these folks criss-cross the world with the worst carbon offender of any transport mode - the private jet. This mode introduces carbon directly to the upper atmosphere that is the moral equivalent of an intravenous feed to nature. Let me correct that. It is actually the literal equivalent, indeed.

Hypocrisy is opposing new refineries to be built in the East Coast or California but turning a blind eye to the fact that oil products continue to arrive via pipeline and barges to satisfy their needs while adhering to saying NO! to any new facility in order to fulfil their noble intentions. This is all in plain view when in fact new refineries on site will have saved consumers money by producing refined petroleum products nearby. In one of my earlier assignments I had a huge map of the U.S. in my office (that was pre-cubicle days back then) depicting a spagheti of pipelines criss-crossing underground mostly originating from the Gulf Coast (Texas and Louisiana) where many of those pipelines deliver gasoline, diesel and even natural gas to the East Coast. Those pipelines still do operate today so the vociferous opposition to the Keystone Pipeline between Canada and the U.S. baffles the mind of a lot of people. 

The oil industry responded to leaded gasoline issues by taking it out of the market and a new menu of cleaner gasolines came with adjusted vapor pressures for summer and cooler driving seasons.  More than any other, the petroleum industry has done so much more to improve its product line at huge costs but it must never be lost in people's minds that more than anything it had the greatest impact at making people's lives better than it had harmed. Surely the whales are thankful. Pre-petroleum times meant whale blubber was all we got to lubricate the wheels of progress, both  literally and figuratively.

What will we do with healthcare if there was no plastic in the hospitals - from syringes to medical equipment, to germ-free and bio-hazard containers, even organ portable transporters in ice are made of plastic, so are plastic to store and move plasma, medicine bottles, etc.  Imagine a world without plastic today and you are instantaneously transported to medieval times. Take gas and electric heating and cooking away and the stone age is what awaits you in a blink of an eye.

In my other assignment I scheduled and coordinated the movement of asphalt from our midwest refinery up and down the Mississippi and its tributaries via a fleet of barges. I used to imagine back then the significance of the product that was literally the bottom of the barrel that had little glamor even among my peers who'd rather be involved with the more popular oil product lines. But I was convinced of its value for if not for asphalt there would have been thousands of miles of dirt road across interstate highways and rural roads. Instead, you will find today black ribbons of the quietest highways along Kentucky, Tennessee, Indiana and countless regions of the country and the whole wide world where asphalt roads are the gentlest pavement your car or truck will ever run on. The easiest to patch and repair as well. And rubber on your tires last and remain true for 30 to 50 thousand miles of use, carrying loads of anywhere from 2500 pound automotive vehicles to the longest 18-wheeler behemoths only because of carbon mixed in with the rubber. Why they're black is simply because carbon black, another bottom of the barrel oil byproduct, is what strengthens natural rubber like no other substance can provide. Again, try and imagine your life without petroleum and you'll imagine how impossible it is to live the life that you had been used to even if you consider only the past decade. You will have no smart phone, laptop, or a lot of everything that makes your everyday life comfortably and safely lived. You won't travel far. You will not see much of the world and not much of the world can see you either.

Texas. It is everything the Green New Deal (GND) will not want you to see or reside in. It is not the argument GND will want to face.  It is not the answer GND will want you to consider. It is not the state GND will want the rest of the world to idealize or use as an example.

I urge the reader to look at Texas a little differently now.  Texas is the barometer that will determine how this country chooses to govern for the next few decades.  Texas is what is needed to counter the brewing perfect storm of climate ideology gone insane, the gathering winds of socialism and the soaring drowning wave of political correctness. 

I leave you with this dreadful news barely 24 hours ago:

"Seattle’s public-school district has proposed a new math curriculum that would teach its students all about how math(ematics) has been “appropriated” — and how it “continues to be used to oppress and marginalize people and communities.”

That right there is the true face of an existential threat, the totality of the ideologues' total loss of sanity when even one of the best tools of teaching is demonized to advance one crazy notion of social justice that will have an economic consequence.

Go the Texas way instead. Where universities still teach petroleum engineering, and math is the clear language of choice. 

Inevitably, the reader may ask, "What about the heat? How does one deal with it?" 

In Texas where gasoline and energy costs are low, air conditioned cars and fully air conditioned homes are basic amenities  that are within the affordability range of the regular wage earner. An air conditioned workplace and offices are the norm. Where it gets to be too much is when Texans air condition their garages. Now, that is the extent of Texas braggadocio. Only eclipsed by the Texas version of southern hospitality. When y'all get the opportunity, grab it by the Texas Long Horn.
















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