To safeguard its economic future, Houston, the epicenter of America’s Oil Industry, needs to embrace the change to cleaner energy, according to one of the city’s top oil bankers. Houston, the country’s fourth-largest city, has been powered by the oil and gas sector for almost a century, and its economy has been boosted in recent years as the shale business has taken off.
Nonetheless, environmentalists and some city officials have long cautioned that it has to begin planning for a future without oil. Tudor is part of a rising chorus of industry insiders who have come to the same conclusion as the oil boom fades and the energy sector redirects its growth and capital to low-carbon solutions.
Tudor said, “The Oil Industry is “highly unlikely to be contributing to Houston’s growth in the next decade or two in the way that it has in the last decade or two. We don’t think it’s going away, but it’s going to be a much slower growth profile.” Tudor, who has worked in the market for more than 30 years, was a partner at Goldman Sachs until striking out on his own in Houston in 2004. Tudor, Pickering, Holt, & Co became a leading banker in America’s shale area, providing him a front-row seat to the country’s oil boom and giving his opinions clout in the Houston corporate community.
After several years of financial stress in the US shale business, which is currently under tremendous shareholder pressure to curb expansion and focus on funneling income back to investors, the city has had a taste of the perils of an energy transformation. According to the Greater Houston Partnership, the oil and gas sector accounts for less than 20% of Houston’s gross domestic product, down from 40% in 2014.