Report: Export boom will boost Houston job growth

Fuel Fix ^ | May 13, 2014 | Ryan Holeywell

[thackney]

Houston is on the verge of a two-pronged “export boom” that could help create more than 55,000 new energy sector jobs, according to a study scheduled for release Tuesday.

The overhaul in Mexico’s energy sector, along with the growth of liquefied natural gas and chemical plants, will mean new jobs in Houston as companies ship more products abroad.

“The oil and gas industry always like to talk about what’s the next frontier,” said Patrick Jankowski, vice president of research for the Greater Houston Partnership, which produced the report. “Mexico is the next frontier. Chemicals is the next frontier.”

Mexico’s energy future

Mexico is hammering out the details of changes it made to its constitution last year that, for the first time in decades, allow foreign oil gas companies to tap into its resources. Until now, only the state-owned energy company, Petroleos Mexicanos, was allowed to do that, but its production has been declining.

Pemex lacks the financing and technical expertise to tap commercial volumes from shale reserves and deep water, so Mexico has moved to share some of its oil and gas profits with foreigners in order to reach resources that might otherwise be inaccessible.

The report says Houston already exports $19.3 billion in industrial machinery — a category that includes oil field equipment — around the globe. It projects a 15 percent increase in those exports, spurred by an energy resurgence in Mexico, would support 28,574 jobs in the Houston area.

A similar-percentage boost in iron and steel products — material Mexico will need to develop pipeline infrastructure — could support 2,824 new jobs, according to the study.

“As we go into Mexico, there’s going to be great opportunities,” said Lori Vetters, senior vice president and regional commercial executive for Texas at HSBC Bank, which sponsored the study. “We have the technology and expertise to help them reverse the decline in their production forecasts. That in itself will require Texas companies to make more of the things they’re already making and ship them as that market opens.”

Gulf Coast chemical boom

The other part of the export boom will come from the billions of dollars in chemical plant construction slated for the region. A boom in unconventional production has give the United States an abundance of cheap natural gas, which the chemical sector uses for fuel and feedstock.

In the United States, plastics building block ethylene is made from ethane, a natural gas liquid. But in other parts of the world, ethylene is made from naphtha, an oil-based component that’s much more expensive.

As a result, there’s been a rush to build U.S. chemical facilities to take advantage of that price difference.

The chemical industry has announced more than $105 billion worth of projects in the U.S., according to the American Chemistry Council, and many are located along the Gulf Coast. The Houston area exports $16.8 billion in chemicals. The researchers found that a 15 percent increase in chemical exports would support 23,787 more jobs.

New jobs

Notably, those numbers only include jobs generated directly by the increase in exports and not from the construction of the new facilities.

The report also didn’t quantify job creation tied to liquefied natural gas export plants under development in Brazoria County and just across the Louisiana state line in Cameron Parish.

The study warns that the numbers are only estimates.

Potential restrictions on hydraulic fracturing, one of the technologies that has driven the natural gas production boom, or other factors causing gas prices to rise, could weaken the export boom, the report says.

According to data from the U.S. Department of Commerce, the Houston metro area exported $110.3 billion of goods in 2012, the latest year for which data is available. That figure — the highest among U.S. metro regions — more than doubled since 2006.

[Foundahardheadedwoman]

I hate to say this but Houston would be wise to prepare for LNG explosion in the near future. Some folks may not like the idea of another boom in the making and may demonize this fuel. I think there was one in the northeast in the 40’s is bad news. Yep, I may be paranoid and truly hope I am.

[thackney]

You need to learn more. The NIMBYs and environMENTALists have put out a lot of false information, spreading a myth of false dangers.

LNG won’t ever burn, let alone explode. It has to be vaporized first to methane gas then mixed with air down to a 5~15% concentration. By the time that has happened during a leak, the vapor, which is much lighter than air, has risen up and away from the tanks.

Secondly, there is not LNG Inports or Exports in Houston. That is down at Freeport.

[Vince Ferrer]

Plus the panama canal is expanding, which will allow larger ships from Asia to bypass the west coast and unload at east coast and gulf coast ports.

[Foundahardheadedwoman]

OK I am full of crap on this subject. It may have been an ammo ship that went up in the northeast. I know methane used to work in the coal mines. Also knew that the ratio had to be reached to explode it. But with the correct ignition source are you saying it can not ignite? First explosion releases the gas, delayed second explosion ignites the gas after the air fuel ratio is reached. Not possible?

[thackney]

Methane, refrigerated down to a liquid at -260°F will not ignite.

The vapors that come off it are pure methane gas and will ignite when diluted sufficiently with air, but has 47% the density of air so it rises up and away rather quickly.

Natural Gas needs to be contained to create a explosive pressure wave. Unconstrained, it burns and burns rapidly, but it is not an explosion.

LNG SAFETY MYTHS and LEGENDS
http://www.netl.doe.gov/publications/proceedings/02/ngt/Quillen.pdf

[353FMG]

LNG in the 40’s?

I doubt they had the technology then when most of the CH4 was flared or used as fuel gas.

You may have meant LPG.

[thackney]

Another point to consider:

LNG has 88% the energy per gallon compared to propane.

LNG has 64% the energy per gallon compared to gasoline.

LNG has 58% the energy per gallon compared to diesel.

If all the others are okay for ship transport into the harbor, why is the one with the least amount of energy, and won’t even burn, a concern?

[Jane Long]

The construction boom in Houston (both commercial and residential), seems to be never ending.

May God continue to bless TX and Houston.

[thackney]

Driven by the industrial construction boom...

[thackney]

If you are willing to spend 10 minutes, the video at the link below does a great job of explaining why LNG is a relatively safe method of transporting energy.

http://www.freeportlng.com/safety_information.asp

The video includes putting out a cigarette in the LNG and drinking a glass of water after pouring LNG on top.

[Jane Long]

Yes. And, it’s also taking place in S TX, up to Houston. The billboards, industry vehicles, etc along I -10 attest.

[thackney]

boom in the making and may demonize this fuel. I think there was one in the northeast in the 40’s is bad news

The was an LNG accident in the 1940s. They did not well understand the induced brittleness of carbon steel back then and stored LNG in relatively thin walled carbon steel tanks at the East Ohio Gas Company in Cleveland.

A tank began leaking, there was no containment system like the dike walls we use today. The vapor from the tank ignited and LNG poured out and into the nearby sewer system into a residential neighborhood.

The LNG warmed, vaporized, mixed with air and sewer gases then reached ignition sources. It was bad. The sewer contained and concentrated the pressure waves rupturing out at manholes and the like. Very bad fire and several series of explosions in the sewer igniting buildings.

There were lots of things done wrong with that installation.