As Aberdeen battles its latest oil price storm, 4,500 miles away a US town is caught up in the same headwinds, but this time with a much steadier oar.
Beaumont is located in Southeast, Texas about 90 miles from Houston. With a population of 120,000 it’s similar in size to the Granite City.
But it’s big black gold break came much sooner. On January, 10 1901, the Spindletop gusher officially introduced the town and its population into the oil and gas arena. Spindletop, which was the first oil field found on the US Gulf Coast, blew for nine days at an estimated rate of 100,000 barrels per day.
However, today the city, which has weathered more than a century of upcycles and downcycles, is making a concerted effort to diversify away from its big break – an effort to become the place that’s known as a gusher of innovation rather than a single commodity.
“With this industry there’s a lot of high highs and low lows, and that’s a very difficult thing for a region to suffer through because we lose people along the way,” Paul Latiolais said.
Latiolais is the director of the Innovation, Commercialization, and Entrepreneurship (CICE) Center at Lamar University.
He added: “Even when things are going well you still lose people, because they wonder well how long is it going to last this time?”
CICE is region’s answer to buffering the lower Brent prices blows. It’s a partnership between Lamar University’s College of Business and College of Engineering and the Southeast Texas business community. In 2004, a TIPS report highlighted a need for a diversified economy and said Lamar University should act as a catalyst for economic development in the region.
Last year, the university broke ground on the 21,000 sq ft center, which will officially open in 2017.
Lamar University graduates more people with a Masters in Chemical Engineering than anywhere else in the country. However, the majority leave the town for pastures news. A legacy Latiolais described as a “mass exodus of skills”, and something he plans to reverse.
He said: “With the way the upstream industry is there might be a lot of people who want to stay here, or, for example, Aberdeen. But if the jobs aren’t there they can’t stay.
“That’s what everyone told me when I got here. They said, ‘I want my kids to stay here and work here, but there are no jobs. Can you help fix that?’
“People were graduating from the university and leaving. It was a massive brain drain.
“The question became what do we do at Lamar to fix this?”
Latiolais and his team are already helping businesses diversify and capitalize on new markets.
Budding entrepreneurs and innovation-based companies can go the centre and get access to mentoring and university expertise. The CICE “will assist companies evaluating opportunities in the region, helping provide a ‘soft landing’ and new company development to help diversify the economy”.
Latiolais is helping firms transition into biotech, medical engineering, LNG and agriculture.
“The reason we started this journey was to diversify the economy. It’s similar to Aberdeen because it was going through boom and bust and when you’re dependent on oil that’s difficult.”
The end goal is to carve a path similar to Pittsburgh and the Silicon Valley’s, according Latiolais. To create a “cluster of innovation” in Southeast Texas’ confines.
“You have to realise this is long play,” he said.
“You can’t turn this around in one to three years. If you’re working with a batch of companies you’ll have some that will make and some that won’t.
“But you want them all to be part of that reform, and that’s how you create innovation clusters.”
Latiolais is panel member at Energy Voice’s breakfast event tomorrow at the Hilton Post Oak at 7am.