Texas Economy Thread

[desertpunk]

Texas Economy Thread

Gushing with news from business, banking and commerce!

image hosted on flickr

Lucas Gusher, 1901 by Texas Energy Museum, on Flickr

[desertpunk]

Moneynews.com

Shale May Spur $30 Billion of Chemical Plants, Chevron Phillips Chemical Says
Tuesday, 06 Mar 2012

Chevron Phillips Chemical Co. said its industry may spend $30 billion to build U.S. factories that convert natural gas into plastics because shale gas has made American production the cheapest outside the Middle East.

Output from shale formations will yield enough natural-gas liquids such as ethane to support about five new plants that produce ethylene and related plastics, said Mark Lashier, an executive vice president at Chevron Phillips. Each facility will cost $5 billion to $6 billion and will be built over more than a decade, he said today in an interview in Houston.

The company, a joint venture of Chevron Corp. and ConocoPhillips, is spending $5 billion to build a new ethylene plant in Baytown, Texas, by 2017 as well as two polyethylene plants and related infrastructure, Lashier said. Dow Chemical Co., Sasol Ltd., Formosa Plastics Corp. and Royal Dutch Shell Plc also are studying plans to build new plants, known as crackers, to use the relatively inexpensive gas.

“It’s tens of billions of dollars that the industry will have to invest to take advantage of that,” Lashier said at CERAWeek, a Houston conference held by IHS Cambridge Energy Research Associates.

Cheap gas is doubly advantageous to chemical makers because it’s used as a raw material and to power factories. U.S. gas is at a record low relative to oil, which is used to make petrochemicals in Europe and Asia.


[...]
Read more: Shale May Spur $30 Billion of Chemical Plants, Chevron Phillips Chemical Says

[desertpunk]

Dow

Dow to Build New Ethylene Production Plant at Dow Texas Operations

MIDLAND, Mich. April 19, 2012 08:00 AM Eastern Daylight Time
The Dow Chemical Company (NYSE: DOW) today announced that the Company will construct a new world-scale ethylene production plant at Dow Texas Operations in Freeport, TX, as part of Dow’s previously announced comprehensive plan to further connect its U.S. operations with cost-advantaged feedstocks available from increasing supplies of U.S. shale gas.

The new $4 billion ethylene production facility at Dow Texas Operations will employ up to 2,000 workers at its construction peak. Over the next five to seven years, Dow estimates that this project, together with all other planned projects announced as part of the Company’s comprehensive U.S. investment plan, will employ up to 4,800 workers during peak construction and support over 35,000 jobs in the broader U.S. economy.

“For the first time in over a decade, U.S. natural gas prices are affordable and relatively stable, attracting new industry investments and growth and putting us on the threshold of an American manufacturing resurgence,” said Andrew N. Liveris, Dow Chairman and Chief Executive Officer.

[...]

[Dariusb]

Cool thread! Should bring lots of jobs/money to Texas.

[Rail Claimore]

I like this idea. I'm subscribed to the Texanomics twitter account, but I wish they'd update more.

[desertpunk]

Central Texas Growth Leads To New Area Code

Regional growth and added demand for new wireless phone numbers and business landlines have prompted the need for a new Central Texas area code.

The Public Utility Commission is planning to add the 737 area code to the 512 territory as the remaining available numbers are expected to last until late 2013.

Starting July 2013, the new 737 area code will be assigned to new telephone customers in Travis, Williamson, Hays, Burnet, Lampasas, Caldwell, Bastrop, Lee, Milam, Mills, Coryell, San Saba, Bell, Fayette, Guadalupe, Comal, Blanco, Llano and Burleson counties.

Current customers with a 512 area code will get to keep their numbers, and all customers will eventually be required to dial 10 digits for all local calls.

The plan calls for a six-month period that allows for either seven or 10-digit dialing from December 2012 through May 2013. Mandatory 10-digit dialing is scheduled to begin in June 2013, followed by activation of the 737 area code in July 2013.

[FLAWDA-FELLA]

I remember when I lived in S.A. back in the eighties, "512" was the only area code for all of South and Central Texas.

[Bond James Bond]

Eagle Ford Output to Reach 500,000 by 2012 End, Klesse Says

The Eagle Ford shale formation will put out 500,000 barrels of crude oil a day by the end of the year, Valero Energy Corp. (VLO) Chief Executive Officer Bill Klesse said after the company’s annual meeting in San Antonio.

Producers have told him output from the South Texas formation may rise to 1 million barrels a day in the next few years, Klesse said. Production in 2011 averaged 60,000 barrels a day, according to data from the Texas Railroad Commission, which regulates the energy industry in the state.

“It’s going to back out sweet crude imports into the United States, and that’s going to happen by 2014,” Klesse said.

[...]

[Bond James Bond]

^
But that may not even be the biggie!



Pioneer Bets On West Texas Shale Oil To Rival Bakken

U.S. oil production is enjoying a renaissance, thanks to new technology that has made oil recovery possible in tight shale rock.

The busy Bakken formation in North Dakota and Montana is the largest and best-known oil shale play.

The Eagle Ford in South Texas and the Barnett "combo play" (gas and oil) in North Texas are also fairly famous unconventional plays.

But the Wolfcamp Shale?

"Over the next two or three years, everybody is going to be making a beeline to the Wolfcamp," said Scott Sheffield, chief executive of Pioneer Natural Resources.

Spanning numerous counties across West Texas, the Wolfcamp formation is located below the long-plied Spraberry field, which helped make Midland, Texas, oil-central starting in the early 1950 s.

Its location in the Midland Basin is within the larger Permian Basin.

Sheffield and other oil experts say the Wolfcamp is probably the thickest of any onshore U.S. oil shale play, with up to 1,000 feet of potential payout across hundreds of thousands of acres.

Biggest And Thickest

"It will be the biggest, and it is already the thickest," Sheffield said. "So it's got the most pay zones of any oil shale play in the U.S. I call it the third or fourth coming of the boom in West Texas."

If Wolfcamp does turn out to be the next big oil shale play, Pioneer is on the ground floor. With 900,000 acres under lease in the Spraberry, it has the largest land position.

Pioneer believes that more than 400,000 of those acres are ripe for horizontal drilling.

[...]

[ardamir]

Pioneer is just making a killing.

[desertpunk]

Austin, Ft. Worth Among Top Markets For Real Estate Investment

April 03, 2012

According to Realtor.com and data from the National Association of Realtors, Austin is the second-best real estate investment market in the Country. Out of 146 markets analyzed nationwide, Austin placed second after Tucson, Arizona.

Austin ranks high for the potential for market appreciation and ability to generate financial returns through renting. With a very strong rental market, rapidly increasing rents, and low interest rates, more people are purchasing investment properties in Austin. According to the Austin Business Journal, "Austin’s potential for price growth is one of the best in the nation and the median list price of $229,500 is about 12 percent higher than a year ago."

The Top 10 Real Estate Investment Markets:

1. Tucson, Ariz.
2. Austin
3. Kansas City, Mo.
4. Baltimore
5. Fort Worth, Texas
6. Salt Lake City
7. San Jose, Calif.
8. Raleigh, N.C.
9. Milwaukee
10. St. Louis

With high downtown rents and low interest rates, an increasing number of buyers are looking to invest in downtown condos, funding the payments by renting the units out. While it is increasingly possible to make such investments "cash flow positive," many building restrict speculative purchases by limiting the ability to rent out units. Some buildings have special rental deeds which require larger deposits.

[desertpunk]

Mexican Buyers Fuel Area Property Market

A new survey has confirmed what many in the local property market have been saying for years: A lot of Mexican nationals are in the market for homes in the Houston area.

In the last year, 39 percent of Houston-area real estate agents surveyed said they dealt with international clients, with people from Mexico making up the largest portion of shoppers from one country, according to the results of the 2012 International Real Estate Business Survey conducted by the Houston Association of Realtors.

The next largest group reportedly came from India, followed by the United Kingdom, China and Canada. More than 1,300 members of the local realty association participated in the survey, which was based on activity during the 12 months ending in April.

Houston's real estate market has always attracted Mexican buyers. But their reasons for coming here have changed, said Mariana Saldaña, owner of Uptown Real Estate Group.

In the past, affluent Mexicans would buy high-rise condominiums to have a place to live when they came here to shop. Now, amid increased levels of crime in their country, they're coming to stay.

The Woodlands, a master-planned community north of Houston, seems to get the lion's share of Mexican buyers, agents say. "Last year, we sold 47 new homes in The Woodlands, and every one of them was to a Mexican client," Saldaña said.

She said The Woodlands is popular because of its size and proximity to shopping, hospitals and Bush Intercontinental Airport. Royal Oaks is another active neighborhood, she said, as is the Galleria area with all of its residential high-rises.

International business related to the energy industry, Texas Medical Center and Port of Houston also fuels property transactions involving foreign buyers, said Ward Arendt of Marilyn Arendt Properties.

Some coming here for short-term work stints, however, are renting. "Unless they're here longer than three years, it doesn't make any sense for them to buy a house economically," said Arendt, a past chairman for both the Houston Association of Realtors' International Advisory Group and International Council of the Texas Association of Realtors.

[...]

[desertpunk]

Area's Health Care Industry on An Upswing


Dell Children's Medical Center

Health care-related jobs have expanded in Austin in recent years, much like they have in the rest of the country.

The reason? The local population is growing, and it is aging. "Having more people and more older people generally puts more demand on health care services," said Greg Hartman, who is a president with the Seton Healthcare Family in Austin. "Older people tend to need more health care," he said.

In Austin, health care ranks second among the area's fastest-expanding job sectors since 2007, trailing only the leisure and hospitality sector. The Austin metro area had 80,000 health care jobs in October, up about 18 percent from 2007. Of that total, one-quarter are hospital jobs.

Seton, as one of the two large hospital organizations in the Austin area, has done its share of expanding. Since 2007, Seton has opened Dell Children's Medical Center in Austin, Seton Medical Center Williamson in Round Rock and Seton Medical Center Hays in Kyle. It also acquired Smithville Regional Hospital this year and is a partner in a new medical center in Harker Heights, near Fort Hood. It is also joining with RehabCare Group to build the new Central Texas Rehabilitation Hospital in North Austin.

Because of rapid changes occurring in the industry, Hartman said, Seton and other providers have had to change their business approach. That means offering outpatient care, wellness care and home health care.

[desertpunk]

Texas Oil Boom Filling Hotels

Robust drilling activity in the Eagle Ford Shale is rescuing the state's lodging sector.

San Antonio-based Source Strategies Inc. says in its newest Hotel Brand Report that hotels in the counties with the most oil-and-gas production were responsible for 75 percent of the $151.3 million in additional revenues hotels produced statewide between the first quarter 2011 and the first quarter this year.

That occurred even though those oil-and-gas-rich areas account for only 38 percent of the 395,100 hotel rooms in Texas. The rest of the hotel sector recorded insignificant revenue gains of 3.2 percent, according to the study released this week. “The economic impact of oil and gas is huge,” said Bruce Walker, president of Source Strategies.

As surveyors, drillers and other oilfield workers poured into the largely rural counties that occupy the Eagle Ford, hotels quickly began to fill, RV parks multiplied and nontraditional residential sites called man camps appeared.

As occupancy rates rose in the area of the play, hotels could raise room rates and not worry about losing business. Even new hotels are filling up quickly, absorbing workers who were forced to live farther from drilling sites.

“Everything is full. If you wanted a room for something next year at this time, you'd have a problem getting it,” said Raymie Zella, city manager in Cuero, where one new hotel has just been completed and four others are under development. “I've never seen anything like it in my 30-something years in this business.”

“It really hit strongly in the first quarter,” Walker said. “In these areas, there are new hotels opening all the time.” That there's such a large number of new hotels makes sense with demand for places to live at levels high enough for developers to pay off their hotels in three to five years, Walker said.

[...]
Read more: http://www.mysanantonio.com/business...#ixzz1w1NEnv5k

[desertpunk]

Austin's Tech Community Lines Up Behind Cornyn Visa Proposal

Austin's high-tech business community has lined up behind a bill, introduced this month by Sen. John Cornyn, R-Texas, that would make it easier for foreign graduates of some top American science and technology schools to remain in the country long term.

Cornyn's proposal, called Securing the Talent America Requires for the 21st Century, or the STAR Act, would open up 55,000 immigrant visas a year for students who earn master's or doctoral degrees in science, technology, engineering or math programs — known collectively as STEM programs — at qualifying U.S. research institutions.

The STEM graduates would qualify for the visas only if they have a job offer in a related field and if the offer would not displace an equally qualified American applicant, according to the bill. For those who do qualify for the STAR visas, however, the bill would open up a streamlined path to permanent residency.

"In the global competition for the world's best and brightest minds in math and science, the United States should take a backseat to no one," Cornyn said in a news release this month. "I am confident the STAR Act will bolster American competitiveness and provide a stronger foundation for long-term economic growth and job creation."

Cornyn's bill is still pending in the U.S. Senate. Other measures targeting high-skills immigrants have been introduced in the U.S. House and Senate.

[desertpunk]

Texsa Electrical Grid Operator Warns Of Shortages In Coming Decade



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[desertpunk]

Chrysler Reopening Dealerships Closed In Bankruptcy

The company’s shortage of dealers in the Dallas market has reportedly cost it thousands of sales in the last two years.

With sales soaring, Chrysler will reopen at least three of the four Dallas-area dealerships that closed during its bankruptcy in 2009.

Over the last couple of years, as Chrysler has regained its health, officials have been assessing the company’s presence in various markets, concluding that the area needs 11 dealerships...

[desertpunk]

Motiva Upgrade Makes It Largest US Refinery

PORT ARTHUR - With the turn of a ceremonial valve Thursday, dignitaries marked the startup of an expanded Motiva refinery - underscoring Royal Dutch Shell's commitment not to imitate rival oil giants that have spun off their refining operations.

"By combining our upstream and downstream capabilities, integrated companies can drive innovation and match resource with demand," Shell CEO Peter Voser said at the ceremony marking the completion of a five-year, $10 billion expansion that doubles the capacity of the refinery, a joint venture of Shell and Saudi Aramco. "Some of our competitors have simply walked away from the issue - spinning off their downstream operations into standalone companies. Shell won't do that," Voser said.

In the past year, ConocoPhillips and Marathon Oil Corp. have become independent exploration and production companies and spun their refining and other downstream businesses into separate corporations.

Voser said Shell is confident it can continue to thrive as an integrated company through ventures such as the upgraded Motiva facility. "Part of the problem is that some refineries are unsuitable for processing more difficult crude, on which supply increasingly depends," he said. "They are in the wrong places making the wrong products."

When at capacity, the refinery will process 600,000 barrels of crude a day, making it the nation's largest. Khalid Al-Falih, CEO of Saudi Aramco, said the project was the largest single expansion of U.S. refining capacity in four decades.

[Bond James Bond]

Eagle Ford banks challenged as deposits skyrocket

South Texas landowners getting fat checks from energy companies for drilling on their land have been a boon to banks based in the Eagle Ford Shale.

Deposits at most of those banks have surged. For example, Karnes County National Bank's deposits rocketed 110 percent to almost $168 million from the end of 2009 through the first quarter of this year.

Eleven other institutions registered jumps in deposits that ranged from 46.8 percent to 82.7 percent. By comparison, domestic deposits at U.S. banks increased 14.7 percent during that time.

The influx of deposits has left the Eagle Ford-area banks with something of a challenge: how to deploy that money.

"It's a problem, but it's a good problem," said H.B. "Trip" Ruckman III, president and chairman of the Karnes County National Bank in Karnes City. Its deposits rose by $88 million from the end of 2009 to March 31, while its loans rose by $19 million.

"We have had depositors come in with more than a million dollars at a whack," he added. "So it is a challenge to keep the money invested."

[...]

[desertpunk]

This is all just in time for the return of "Dallas"!