In the News
Published by the Houston Chronicle
When oil prices crashed last year and work in the oil patch dried up, Jonathan Click found salvation in solar.
For the previous 15 years, the Houston petroleum landman had been tracking down Texas land owners and mineral rights holders to help negotiate lease deals for oil and gas companies. But since the coronavirus pandemic wiped out crude demand and production, Click has spent the bulk of his time helping solar companies ink leases to develop solar farms across the state.
“If it wasn’t for solar, I wouldn’t be a landman right now,” Click said. “It’s gotten to that point.”
During the downturn, some oil and gas workers such as Click are finding work in renewables, the nation’s fastest-growing energy sector. It’s another sign of the energy transition toward a lower carbon future, which will have profound implications for Houston’s dominant oil and gas industry from jobs to the broader economy
Texas is already the nation’s top-producer of oil and wind energy, but solar is picking up steam statewide. The Lone Star State has the nation’s second highest number of solar installations annually, behind only California. Some 750,000 Texas homes are powered by solar energy, and by the end of this year, it’s estimated that more than 1 million homes could be powered by the sun.
Large solar farms are going up across Texas. Solar company Lightsource BP, half of which is owned by the British oil major, recently completed its largest project on 1,500 acres in Lamar County in northeast Texas. Lightsource BP’s 260-megawatt Impact Solar project will power more than 41,000 homes in Texas while eliminating the equivalent of carbon emissions from more than 68,000 gasoline-powered cars. The solar farm is a key part of BP’s pivot from fossil fuels and its goal to become a net-zero carbon emissions company.
“Clean energy is growing and growing fast in Texas,” said Raj Prabhu, CEO of Mercom Capital Group, an Austin-based clean-energy research firm. “As prices have dropped, interest in solar has really gone up.”
“These solar companies have created extra work,” Click said. “If it weren’t for them, it’d be even worse.”
Born and raised in Houston, Click always thought he’d be in the oil and gas industry. His father owned an oil-field services firm selling pipe flanges and valves. After getting an economics degree from the University of Houston, Click began his career as a landman in 2006, just as the shale boom kicked off.
The shale revolution — made possible by technological breakthroughs in hydraulic fracturing and horizontal drilling — led to a land rush in shale plays nationwide. As the president and founder of Houston-based Click Energy, Click would visit county clerks’ offices to research land titles and mineral rights and then track down owners to help negotiate oil and gas leases.
The Great Recession in 2008, however, delivered a swift blow to the oil industry. Click went two months without work.
“You’re sitting there, praying a broker calls you with a job,” Click said. “When it rains, it pours. When it’s dry, it’s a desert.”
Those calls finally came as drilling in the Eagle Ford in South Texas and then the Permian Basin in West Texas took off. Clerks’ offices were again packed with landmen trying to get photocopies of real estate records.
But after oil busts in 2014, 2018 and especially 2020, oil companies slashed budgets, limiting exploration and production to their most prolific shale plays. That has meant less work for landmen, said Eli Huffman, former president of the Houston Association of Professional Landmen, which has some 1,300 members.
“If oil prices are too low, no one is buying land,” Huffman said. “It really has challenged landmen who provide services to third parties.”
As oil companies contracted, the value of land in oil-fields around the country plunged. The average price of U.S. shale acreage has fallen by more than 70 percent to $5,000 per acre in 2020 from $17,000 in 2018, according to Norwegian energy research firm Rystad.
“The land grab is over,” Click said. “Private equity has dried up because they’re not getting the returns they wanted, and that’s created a damper on spending.”
Landmen face other challenges beyond the pandemic’s economic fallout. Computerized land records and new mapping technology have taken a toll on the profession and the downturn has reduced wages.
Instead of waiting for the tide to turn, Click hustled his way into solar. Like oil companies, solar companies need to assemble large tracts on which to install panels, and they have turned to landmen to research owners and negotiate leases with them.
“Minerals research is minerals research,” Click said. “It doesn’t matter if they’re putting a zoo on top of the land. Who’s wanting us right now are solar companies.”
Solar energy has a 2 percent market share in Texas, so there’s room for growth, Prabhu said. Texas is an attractive market for solar companies because of its abundant and affordable land, flat topography, sunny climate, robust transmission system and a deregulated electricity grid that makes it easier to do business in the state. Within five years, Prabhu said, Texas could become the nation’s No. 1 producer of solar energy.
“Oil and gas is boom and bust, while solar has seen nothing but gradual growth over the last 10 years,” Prabhu said. “This is where the jobs are going to be and where the economy is heading. If you’re not going to make the shift, you’re going to be left behind.”
Kevin Smith, Lighthouse BP’s CEO in the Americas, said his company is developing more than $1 billion worth of solar projects and wants to invest another billion this year. The San Francisco-based solar company plans two more projects over the coming years in Texas, the company’s largest U.S. market.
Lighthouse BP’s Impact Solar farm in North Texas employed 320 construction workers at its peak, the vast majority of them local hires. The project will require only about five employees to maintain, however. The company has hired former oil and gas workers to construct and maintain solar farms, Smith said.
“No question, we are getting workers moving over from oil and gas,” Smith said. “A lot of the oil and gas skills are applicable to solar.”
Click said he’s experienced no stigma doing contract work for solar companies during the downturn. He expects oil and gas work to return as crude prices have surpassed $50 a barrel, he said, but in the meantime he’s grateful for the solar work.
“No one cares if you’re working in solar,” Click said. “It’s tough out there. You’re considered lucky.”
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