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$30 Oil Not Stopping Massive Project Near Houston

News Article Sponsored by Oil Center Research

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In Bay City,  south of Houston and 20 miles north of the Gulf Coast, Rudolph Henry, a technology engineer, has seen firsthand what has happened to good jobs in the manufacturing sector.

“I spent 28 years in a steel manufacturing plant in Rosenberg, Texas. We made small diameter steel tubing mainly for the petrochemical industry,” Henry said.

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But in 2002, that steel pipe factory north of here closed, like so many plants facing cut-throat competition from overseas. Henry never again worked in a factory.  But here’s the thing: he’s now teaching a new generation of workers how to work in a factory.

“It’s like your life has come to a full circle,” Henry said, sitting in the offices of Wharton County Junior College’s branch in Bay City. Henry leads the college’s industrial technology program.

“We are in an area where industry is expanding. And I think industry is coming back as it used to be,” Henry said.

Inside what had been a Kmart, the college has built classrooms and with the help of corporate donors, has filled them with shiny new industrial equipment. Students learn how to weld, build electric motors and how to work with steel pipe; the kind of pipe Henry used to help make years ago and which now could be re-making the economy of Bay City.

A  few miles from the junior college on the outskirts of town is what could be trans-formative. Rising from a field is a construction project costing over a billion and a half dollars.

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As seen from a catwalk high above the ground floor, big concrete mixer trucks look almost as small as toys, driving around inside the building which now covers an area as big as 20 football fields.

“This is one building, one roof, 25 acres big, and eight floors tall,” German Cura who runs the North American operations for a global company called Tenaris.

Tenaris is one of the world’s biggest makers of steel pipe for the oil & gas drilling industry. But previously, the pipe it supplied to oil fields in Texas was made in Tenaris’s factories in Argentina and Romania.

Cura drives around the perimeter of the site and explains why Tenaris picked Bay City and decided to continue with the project even though low oil prices mean drilling has plummeted.

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“When people ask me why is it you are doing this, the short answer is one, we came to conclude the U.S. market could be serviced in a far more effective way. Two, there is a super opportunity to replace give or take 50 percent of imports (of drilling pipe). And I tell you, oil at $30 is creating the appropriate conditions for us to do it,” Cura said.

As Cura tells it, this new pipe mill will be incredibly more efficient than older plants. Automation means it’ll employ fewer workers though it will still need 600 employees when it opens next year. He says it’ll produce far less pollution from its natural gas furnaces. And he says it’ll be a more nimble operation, allowing the company to meet custom orders “just in time”.

Cura says the end result will be an ability to compete with low-cost producers like China and take back a chunk of the drilling pipe market, half of which he says has been going to foreign producers.

And for the community of Bay City, Cura predicts it’ll be a new day.

“Our experience, we’ve done this around the world many, Bay City, five, ten years from now will be a drastically different place, “ said Cura.

If all goes as planned, it might become a place where working in a factory to make things like steel pipe will be the way of the future instead a thing of the past.


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