Houston — FINE wine flows freely at Tony's, the dining room of the rich and powerful in this dynamic Sun Belt city. But it always flows a little faster when the price of crude oil is high -- and these days, owner Tony Vallone said, the bottles are emptying at a brisk pace.
On a recent Friday evening, socialites in fur coats stepped past the cascading sheets of water at the glass entrance, into an airy room adorned with vibrant Robert Rauschenberg paintings. Waiters wheeled out enormous souffles and whole red snappers encrusted in salt. The richest man in town, oil pipeline magnate Dan Duncan, was dining there for the third time in four days.
At the center table, Ileana Trevino, the head of a hospital foundation, was celebrating her 51st birthday with about a dozen close friends and her husband, Michael, a Marathon Oil executive. She was asked what she wanted to drink.
"Whatever's expensive," Trevino replied, and laughed. The sommelier recommended bottles of a $50 red from Spain's Montsant region, a modest option at a restaurant that offers magnums of 1945 Chateau Petrus Bordeaux for $30,000.
"It's almost palpable, isn't it?" said attorney Michael Solar, one of Trevino's friends, as he waved his glass to indicate the wealth in the packed room. "When the rest of the country is doing well, it seems like Houston is often struggling. But when the rest of the country is struggling, it seems like Houston is often doing well."
High oil, natural gas and electricity prices may bring pain to families and business owners elsewhere, but in America's energy capital, they bring prosperity.
Two out of every five Houstonians owe their jobs to energy -- many big oil and gas companies have their world or American headquarters in Houston -- and the industry's spectacular profits in recent years have helped the nation's fourth-largest city outdistance the country as a whole in economic growth.
Los Angeles and most big cities are seeing slowdowns in their real estate markets this year, but Houston's is still climbing: For 34 months straight, area home sales have increased compared with the same month a year earlier. Yet Houston's housing remains surprisingly affordable: The median home sales price in November was $147,000, compared with $487,000 for the Los Angeles region.
The city is on pace to add 75,000 jobs this year, an increase of about 3.5%, or more than twice the national average. Though that growth rate falls short of Las Vegas and a few other large American cities, experts say it is remarkable that Houston's economy continued to expand even after one of its largest white-collar employers, Enron Corp., collapsed from a financial scandal and declared bankruptcy in 2001.
"A petroleum engineer coming out of Texas A&M now gets about $87,000 a year and a $30,000 signing bonus, and that's for someone with no experience," said Robert W. Gilmer, a senior economist for the Federal Reserve Bank of Dallas. "Houston has heated up to the point where it spreads all the way through the employment sector, to plant operators and truck drivers."
Halliburton Co., the construction and oil field services firm that landed numerous federal contracts to rebuild Iraq, has a checkered reputation in parts of the world. But it has added 11,000 jobs this year, and in Houston, where it is headquartered, it was recently selected as one of the best companies to work at by a leading business journal.
"There is definitely a feeling of excitement working in the energy industry in Houston at this time," said Renee LeBas, who moved here this year to work at Halliburton, where she helps companies find solutions to oil field problems.
LeBas, a petroleum engineering graduate from the University of Texas at Austin, recently bought a small house in a desirable suburban neighborhood, just inside the ring of freeways that circles the city. It's the 28-year-old's second real estate purchase since college.
FOR all the people doing well in Houston, however, there are still many not benefiting from the improved economy, particularly those without college educations. Houston's unemployment rate continues to be slightly higher than the national average, and the presence of tens of thousands of Hurricane Katrina evacuees threatens to become a major social problem when government housing assistance to the storm survivors runs out.
"Not everyone in Houston is going like gangbusters," said Stephen L. Klineberg, a Rice University sociologist who has been surveying the attitudes of Houstonians for a quarter-century. "A relatively small number of people are making a lot of money, but there are still plenty of people struggling to get by."
What's more, many of those prospering are greeting the good times with a grizzled skepticism.