mixed reviews

Houston's energy industry deemed both a strength and weakness on global cities report

Houston could have ranked higher on a global report of top cities in the world if it had a bit more business diversification. Photo via Getty Images

A new analysis positions the Energy Capital of the World as an economic dynamo, albeit a flawed one.

The recently released Oxford Economics Global Cities Index, which assesses the strengths and weaknesses of the world’s 1,000 largest cities, puts Houston at No. 25.

Houston ranks well for economics (No. 15) and human capital (No. 18), but ranks poorly for governance (No. 184), environment (No. 271), and quality of life (No. 298).

New York City appears at No. 1 on the index, followed by London; San Jose, California; Tokyo; and Paris. Dallas lands at No. 18 and Austin at No. 39.

In its Global Cities Index report, Oxford Economics says Houston’s status as “an international and vertically integrated hub for the oil and gas sector makes it an economic powerhouse. Most aspects of the industry — downstream, midstream, and upstream — are managed from here, including the major fuel refining and petrochemicals sectors.”

“And although the city has notable aerospace and logistics sectors and has diversified into other areas such as biomedical research and tech, its fortunes remain very much tied to oil and gas,” the report adds. “As such, its economic stability and growth lag other leading cities in the index.”

The report points out that Houston ranks highly in the human capital category thanks to the large number of corporate headquarters in the region. The Houston area is home to the headquarters of 26 Fortune 500 companies, including ExxonMobil, Hewlett Packard Enterprise, and Sysco.

Another contributor to Houston’s human capital ranking, the report says, is the presence of Rice University, the University of Houston and the Texas Medical Center.

“Despite this,” says the report, “it lacks the number of world-leading universities that other cities have, and only performs moderately in terms of the educational attainment of its residents.”

Slower-than-expected population growth and an aging population weaken Houston’s human capital score, the report says.

Meanwhile, Houston’s score for quality is life is hurt by a high level of income inequality, along with a low life expectancy compared with nearly half the 1,000 cities on the list, says the report.

Also in the quality-of-life bucket, the report underscores the region’s variety of arts, cultural, and recreational activities. But that’s offset by urban sprawl, traffic congestion, an underdeveloped public transportation system, decreased air quality, and high carbon emissions.

Furthermore, the report downgrades Houston’s environmental stature due to the risks of hurricanes and flooding.

“Undoubtedly, Houston is a leading business [center] that plays a key role in supporting the U.S. economy,” says the report, “but given its shortcomings in other categories, it will need to follow the path of some of its more well-rounded peers in order to move up in the rankings.”

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This article originally ran on InnovationMap.

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A View From HETI

Mike Chilton is the CEO and founder of Fluxpoint Energy. Photo courtesy Fluxpoint

A new nuclear energy startup launched last month during CERAWeek in the Bayou City.

FluxPoint Energy, the new Houston- and McLean, Virginia-based company, plans to develop the nation’s first new uranium conversion facility in more than 70 years, an effort CEO and founder Mike Chilton says is critical to unlocking the next phase of nuclear energy growth.

"Policymakers, utilities, and developers increasingly point to fuel availability as a limiting factor for America's nuclear reactors—both present and future," Chilton said in a news release. "Uranium conversion has become an unacceptable chokepoint in a global supply chain still dominated by foreign providers."

Chilton has held leadership roles at Pegasus-Global Holdings and GE Verona Hitachi Global Nuclear Fuels. Rodrigo Gonzalez Arbizu serves as COO and Christopher J. Rimel as chief of staff. The Board of Advisors includes energy leaders, including Jeff Lyash, John Sharp, Jane Stricker, Jennifer Skylakos, Leo Weitzenhoff and Jay Wileman.

FluxPoint’s planned facility will convert uranium oxide into uranium hexafluoride (UF6). Although FluxPoit’s new facility is still far off, the company announced it had secured a site and completed both market and feasibility studies. The specific area has not been revealed, only that it will be in Texas.

Discussions at CERAWeek revolved around securing reliable sources of uranium.

Nuclear energy production has been stagnant or even in slight decline since the 1990s. Concerns about nuclear waste and safety, as well as prohibitive costs, have kept new plants from being built, while the widespread availability of cheap natural gas has made investing in nuclear power less profitable. Many see the technology as dangerous and outdated.

However, as energy crises become more common, companies like FluxPoint are looking to restart the nuclear energy sector. The industry got a boost under the Biden Administration thanks to the Inflation Reduction Act, which set goals of adding 35 gigawatts of new capacity by 2035.

Chilton participated in a panel on the best ways to ensure American nuclear plants have access to uranium, most of which is not mined in the United States.

"America cannot lead in nuclear energy while relying on foreign-controlled fuel processing," Chilton added. "FluxPoint was created to restore a critical piece of our nation's energy infrastructure—ensuring that U.S. reactors have access to a secure, domestic fuel supply. This is about energy security, economic strength, and global leadership."

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