Alberta energy companies shift south, though Houston's oil and gas industry shows signs of slowing
CALGARY -- More than five years into an economic downturn, Alberta oil and gas companies continue to make a shift to south of the border, relocating deep into the heart of Texas.
Energy industry analysts say in the last five years, “hundreds” of companies from western Canada have migrated to Texas, specifically in the Houston area, as regulatory uncertainty and a sluggish economy persists in Alberta.
“A lot of these companies view this as an expansion of their markets, but also, let’s face it, as a sort of a harbour in the storm,” says Doug McCullough with the Canada-Texas Chamber of Commerce.
Some believe the trend will continue.
‘I think the exodus is picking up right now,” says Tim Pickering with Auspice Capital.
“There isn’t a magic bullet that can be shot and solve all of the problems right away. This isn’t just a ‘Trans Mountain (pipeline) shovels are in the ground’ and we solve our problems in the next six months.”
Premier Jason Kenney has pledged to fight to retain Alberta businesses and has taken trips to Houston and elsewhere.
In September, a Texas-based realtor sent out thousands of brochures to try and lure Alberta investment.
“[Texas] is a pretty friendly business-friendly location in general for all industries but, when you look at energy in particular, this is really sort of a boom period,” McCullough said.
The Calgary Chamber of Commerce finds itself competing with its Houston counterpart, which is armed with attractive tax rates and a lower average cost of living.
“That’s why it’s so critical for Calgary to have a strong business climate that’s investment worthy, that enables companies to grow here,” said Sandip Lalli with the Calgary Chamber.
“There are other markets for businesses to grow and that’s why we’re very plugged into what happens in other jurisdictions.”
Houston’s oil and gas industry is dealing with its own slowdown, however. A recent report from the Greater Houston Partnership anticipates up to 4,000 energy jobs will be lost in Houston in 2020 as drilling drops and spending slows.
“The price of the commodity has been improving and I think lulls we’ve been seeing in that progression are going to be temporary,” said PickeringJordan