Houston’s growing pull in global energy

USA

Josh Sherman, 2026 president of the Houston Producers Forum, talks to The Energy Year about Houston’s growing pull as LNG, energy security and data-centre power demand reshape global priorities and the impact of consolidation of Permian Basin production.

The Houston Producers Forum is an oil and gas knowledge-sharing and networking platform.

• LNG, energy security and rising power demand from data centres are strengthening Houston’s role in the global energy ecosystem and reinforcing the strategic importance of US gas production.
• US oil and gas producers are responding to volatility with discipline. Consolidation in the Permian Basin is creating economies of scale for larger companies and opportunities for independents to acquire non-core, but valuable, assets in divestment programmes.
• The drilling and fracking technologies being developed and perfected in the US oil and gas sector will play a key role in meeting rising energy demand across transportation, power generation and manufacturing.

How has the Houston Producers Forum evolved in recent years, and what is its role in the energy ecosystem today?
Houston Producers Forum reached a pivot point during the Covid-19 pandemic, when many industry organisations lost members as people stopped networking. We had a best-in-class membership and a great format, so we consolidated with another organisation and grew from about 200 members to about 500 members.
Our core deliverables are still our luncheons and events, but the scope has widened. Historically, the focus was primarily on oil and gas producers, but today we also encompass CEOs and CFOs from the biggest investment organisations.
People attend regularly because we have great speakers. We have featured CEOs such as Vicki Hollub of Occidental Petroleum, Clay Gaspar of Devon Energy, Ron Gusek from Liberty Energy, and several other heavyweights. The objective is not just to attract top oil and gas producers, but to reach every segment of the energy value chain, from upstream production to LNG, energy trading, power generation and commodities research.

What would you say is the main reason why Houston is attracting more attention from the international energy community?
LNG and energy security considerations have changed people’s perspective. The abundance of gas in the US, not only in Texas but also in the Marcellus and other formations, is capturing the market’s attention. LNG is becoming an increasingly important ingredient in global strategies for power sector resilience, which is motivating the US to rethink its strategies governing production in the Permian Basin and elsewhere.
The world’s economic growth in the foreseeable future is not going to be driven only by China and India, the typical points of energy demand growth, but also by developing countries that do not have reliable energy supplies for heating, cooling and cooking. Those economies are set to generate a large amount of demand if governments allow investment and capitalism to play their role.
Technology is a third element in the story. Data centres will require immense amounts of electricity even if efficiencies continue to increase. The US is fortunate because it supplies the drilling and fracking technologies and expertise that will help meet the energy needs of the transportation, power and manufacturing industries.

How do you assess the response of US oil and gas producers to the current geopolitical disruptions and price volatility?
US producers are responding carefully and conservatively. There was a time when the response to OPEC was to open the spigots and produce everything possible. That creates capital demand, which can be met, but it also causes markets to become overheated. Companies may make acquisitions at the wrong price and drill wells they perhaps should have avoided in trying to meet demand too aggressively.
Today, the question is how to ensure that energy remains affordable in the US. Compared with the 1970s, when gasoline shortages and rising prices had a more direct effect on consumers, this is a more controlled crisis. The industry is doing a great job of rising up to it.
Higher oil prices help producers in the near term, but companies have also made billions of dollars at USD 20 per barrel. As long as companies remain conservative, there are opportunities to make money and reinvest. However, the decision is not just about making money; producers consider risk and reward together. They take risks investing in technology and employees when prices can change. Ultimately, they have to do what is best for the shareholders, a group that includes both US and international investors.

What could further consolidation entail for Permian Basin production?
Consolidation is great for the industry because the global investment community values scale. Opportunities for synergies arise when companies combine, and many great companies with great assets need more inventory. For the majors and large independents, acquisitions create an opportunity to grow, as long as they are done at the right price.
Consolidation also creates opportunities for independents and private equity firms. In past years, the US oil and gas sector had become too disparate, with too many companies in the micro-cap space and too many private-equity-backed teams. M&As have helped consolidators amass inventory, but because they are being conservative and do not want to dilute shareholder value, they are not going to raise too much debt or equity. That creates favourable conditions for non-core assets to be spun out. They can be picked up by smaller companies, and they are not necessarily second- or third-tier assets, because technology is helping to bring acreage once considered lower-tier into the top tier.
The Permian Basin will remain the leader, but Eagle Ford, Haynesville, the Barnett and other basins will still matter. In unconventional drilling, only 5-10% of the hydrocarbons in place are actually extracted, so a lot more reserves remain available for future technologies to extract. Surface resources will also become as important as what is underground, especially in locations where gas offtake, water infrastructure, modular power and data centres come together.

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