Brett Perlman on Blackouts and the Future of Texas Energy
In this episode of Industry Focus: Wildcard, Brett Perlman, CEO of the Center for Houston’s Future, joins host Nick Sciple to discuss the past, present, and future of energy production and the energy grid in Texas. Brett shares why Texas could have the potential to become a hub for clean energy technology like hydrogen and carbon capture.
To catch full episodes of all The Motley Fool’s free podcasts, check out our podcast center. To get started investing, check out our quick-start guide to investing in stocks. A full transcript follows the video.
Nick Sciple: Welcome to Industry Focus. I’m Nick Sciple, my guest this week is Brett Perlman. Brett is the CEO of the Center for Houston’s future and spent 20+ years in finance and policy roles in the energy industry, including four years as the Texas Public Utility Commissioner overseeing the restructuring of the State’s utility system. Brett, thank you for joining me.
Brett Perlman: Nick, thanks for having me.
Sciple: Great to have you on the show. Lots to talk about this week. I mentioned in the intro you from the Center for Houston’s Future. We’re going to spend some time talking about the future today, but I want to start out with the past, set the stage for everybody. You’ve been in the energy industry in Texas for a long time. How has this industry changed since you first got involved and what would you say is still the same?
Perlman: Well, I’m going to talk a little bit about oil and gas, and I’m going to talk a little bit about the power industry. Then I may talk a little bit about how those two things come together in the energy transition, things we’re dealing with at the center right now. But I thought, for your readers and listeners, that might be interesting to hear a little bit about the history of the oil and gas industry and how it’s changed. It’s really an interesting history and I can really talk about it in big terms, I just can’t give you a quick overview. This industry is literally over 100 years old. It started in 1901 Spindletop. Texas was really the first state to become a leader in creating an oil industry. That was a leader for many years, for almost 40 years until the middle of the decade when we saw the rise of OPEC, and really the global demand increased. Texas became a player in the global market as well, but became somewhat sub-eliminated to the role of OPEC in the ’70s and ’80s.
Then of course, all of us are old enough to remember the energy crisis when we saw prices go through the roof. Texas did quite well for a while, and then we saw prices fall in the mid ’80s first oil crisis. Oil became less of a part of the Texas story as we started to diversify our economy. Then an interesting thing happened. We started to see the rise of natural gas as a fuel in the early 20th century. That really responded to revolution and fracking and this idea of different ways of what people call it unconventional production. What really happened in fracking, it started with natural gas, but it really became the rebirth of the oil industry in Texas. What we saw in the early part of this decade was just an explosion again and growth in the oil industry and really growth in production. While we were producing around 3.5 million barrels a day, I’d say 100 million globally, due to the fracking boom, it really made Texas a leader again. We saw national production go to 10 million barrels, in Texas go to five million barrels. Fracking really resulted in the rebirth of the oil and gas industry. That was rejuvenated, prices that had overtime deteriorated. The Permian basin, for example. The area around Maine land has now grown significantly. Then all that was rocking along until we saw, once again, inevitably prices crash again in the middle part of this decade and really the industry got through its next cycle. Just as it was starting to come out, then COVID hit.
