Houston Oil Price Drip trickle down...

6 Replies

www.houstonchronicle.co...

Drop in oil prices is hitting the entire local economy and there isn't an industry that has not been affected.

Thoughts? Comments?

@Jon S. Oil is the lifeblood of our economy. We lose and gain from it everyday, and not just us here in Houston. If you really think about it, the price of milk is tied to oil. Without going into great detail, how do you think the milk gets from the farm to the store? Until there is viable alternative, oil prices will be one of the biggest factors in our economy.

Originally posted by @Jeremy Pakalka :

@Jon S. Oil is the lifeblood of our economy. We lose and gain from it everyday, and not just us here in Houston. If you really think about it, the price of milk is tied to oil. Without going into great detail, how do you think the milk gets from the farm to the store? Until there is viable alternative, oil prices will be one of the biggest factors in our economy.

Yes.  Less so in some markets than others.  In the next ten years, it very likely might be electricity that gets Mike from the farm to the store.  We'll see.

Hopefully, Houston successfully transitions to alternatives quickly enough so the economy doesn't rank long-term...like Detroit did after auto manufacturers pulled out/shut down.

I think it will be a little more than 10 years. I hope it is sooner but it will take a long time to build the infostructure to make it viable. Think of how many gas stations there are and we will need that many places to charge the batteries. The real change will come when it becomes more profitable for companies to use it versus gas. Who knows, there could be something even better on the horizon....

Originally posted by @Jeremy Pakalka :

I think it will be a little more than 10 years. I hope it is sooner but it will take a long time to build the infostructure to make it viable. Think of how many gas stations there are and we will need that many places to charge the batteries. The real change will come when it becomes more profitable for companies to use it versus gas. Who knows, there could be something even better on the horizon....

 It'll happen faster. Moore's law...Tech doubles every 18 months.

Here in CA, we have charging stations across entire state. Spreading quickly.

But replacing oil going into plastics will take longer...

2 alternatives to oil are:
a) Electricity
b) Hydrogen fuel cells

But where does electricity come from? It has to be coal burning or some kind of renewable energy like wind/solar. The agreements at the international global warming summits would limit the use of coal. That would mean that we are not just talking about gas stations here, it would also includes a complete energy industry overhaul. Now, China is one of the countries in the forefront of this kind of change, much much ahead of USA. But if they can do it, we can too in a short amount of time. The bottleneck is the political system, controlled by the oil industry like the Koch brother's interests, which is hard to challenge by any upcoming energy alternatives. So, all in all, unless there is a change political will to bypass lobbyists in decision making, it is hard to see change.

Moving on to Hydrogen fuel cells for energy to drive cars and energy production is something Japan and Japanese automakers are pushing for. But, for USA to adopt it will see similar hurdles as with electric.

Up market.  Down market.  We are still making money.  Just understand what direction its heading and you can be better protected.

Create Lasting Wealth Through Real Estate

Join the millions of people achieving financial freedom through the power of real estate investing

Start here