Monthly Archives: August 2017

Rethinking Houston

Over the past twenty years an awful lot of tech, finance, and especially oil companies, have moved to Houston. Concentrating all their resources in one megalopolis seems economic until your entire operation is shut down by a mega event like Harvey. Take ConocoPhillips. Continental Oil was a creation of J.P.Morgan about 1920. They bought out Marland Oil in Ponca City, and merged them into Denver. Phillips was in Bartlesville,OK. Conoco moved to Houston, then closed Phillips in B town, causing that little town to implode. They had already lost CITGO, the old Cities Service, AKA Indian Territory Illuminating Oil Co., when Venezuela bought them and they refine heavy crude in LA, in Harvey’s path.

Every company and town potentially can be in path of a storm, flood, tornado, but decentralizing operations seems an under-rated concept, what Taleb calls “anti-fragility”. Now consider towns with tech concentrations with Damoclean swords hanging over them. I speak of Seattle,WA, Vancouver CA, and to lesser extent Portland, OR where volcanoes will erupt again and for the first two, Tsunami potential is ever present. The geologic record is clear. These huge events happen upon a long-term, irregular but inevitable basis.

I wonder if companies like Southwestern Energy will not see royalty checks disrupted by the storm. I know my own royalty check originates in Houston although the wells are in Colorado.