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Speech on Global Business Forum—Building Foundations on Shifting Sands, Remarks by Thomas J. Donohue President and CEO, U.S. Chamber of Commerce

Thursday, September 22, 2011 - 8:00pm

As Prepared for Delivery

Banff, Canada
September 23, 2011

Introduction

Thank you very much and good morning everyone. It’s a pleasure to be here. The Global Business Forum attracts some of the most thoughtful and innovative leaders from across North America. I’m honored to be with you.

Today I’d like to zero in on one topic in particular—energy. Although many countries are experiencing difficult economic times, the global economy will recover. The demand for energy will continue to skyrocket for both developed and developing nations.

In fact, global demand for energy is expected to increase 53% by 2035. America’s total energy demand will grow by up to 30% over the next quarter century. And while the use of renewable and alternatives will grow, the primary source of the world’s energy will continue to be fossil fuels. By 2035, they will still account for 80% of global energy use.

Those who can secure an affordable and abundant supply will have stronger economies, more jobs, a higher standard of living, and a great competitive advantage. And as we have learned throughout history, the stronger and more prosperous the economy, the cleaner and healthier the environment.

The importance of a stable energy supply is why China is cutting deals in every part of the world to secure huge amounts of energy to fuel its growth. It’s why Brazil is not wasting a single moment in leveraging recent discoveries. It’s happening in Argentina too. It’s why Canada—and Alberta, specifically—is experiencing an energy boom.

And I might add, it’s why the United States needs to get busy developing its own significant resources.

Yesterday morning I had the opportunity to tour an oil sands field. I witnessed firsthand how this resource is transforming Canada’s economy—safely and efficiently. It’s creating jobs, boosting exports, and establishing Canada as an energy superpower.

Think about this statistic—in June, more new jobs were created in Alberta than in the entire United States. That’s because of energy. My country could learn a thing or two from your example.

We know this for certain: Energy is a lynchpin in the strategic and commercial relationship between the United States and Canada. Energy development is critical to the economic vitality and security of North America.

So today I’d like to discuss how we can secure North America’s energy future and strengthen the U.S.-Canada energy relationship—and why America’s failure to develop its own resources threatens our economic growth and global influence. Should that happen, Canada would be hurt as well.

I know many other interesting topics are being discussed and debated at this conference, and I would be happy to address any of them during the discussion period. I’ll even discuss what’s going on in Washington—if you can stand it!

Importance of Canadian Energy to the U.S. Economy

There’s no question that America’s and Canada’s economic futures are tied together. We are truly interdependent.

Our commercial relationship is among the closest and most extensive in the world. It supports millions of jobs in both of our countries. We engage in a staggering volume of bilateral trade—the equivalent of $1.6 billion a day in goods. In addition, about 300,000 people cross our border every day.

That’s why the U.S. Chamber of Commerce never takes Canada for granted. That’s why we are strong partners with the Canadian Chamber of Commerce, run by my good friend Perrin Beatty. That’s why we work so closely with AmCham Canada, the Canadian Association of Petroleum Producers, the Canadian Manufacturers and Exporters group, and the Canadian Council of Chief Executives, among many others.

And that’s why we devote significant resources to improving cross-border operations, harmonizing divergent regulations, and expanding trade.

But nowhere is our relationship more tightly bound than on energy. Canada and the United States operate an integrated electricity grid that provides all of each other’s electricity imports. America imports more energy from Canada than from any other nation—22% of our oil imports and 95% of our natural gas imports.

Put simply, America needs Canada’s energy—and Canada needs a growing U.S. market that is, and will always be, dependent on the availability of affordable energy and power.

Therefore, our countries have a shared stake in encouraging the further development of Canada’s oil sands.

About half of the Canadian crude oil coming to the United States is derived from oil sands, which account for 97% of Canada’s reserves. As investment in this area grows, so do the benefits for both countries.

Oil sands development is expected to contribute $1.7 trillion to the Canadian economy over the next 25 years—about $68 billion per year. Translated into jobs, that’s 590,000 in the next 25 years. For every two oil sands jobs created in Canada, one job will be created in the United States.

Every U.S. state will benefit from this development. At least 1,000 American businesses supply goods and services to Canadian oil sands and pipeline companies.

Oil sands development is a win-win for our two countries. America needs that oil to fuel a growing economy. Canada has it.

The U.S. Chamber is working hard every day to make our members of Congress understand its importance. We point out the tremendous progress made by Canada’s oil sands developers in reducing their environmental footprint. According to Canada’s Department of the Environment, per barrel greenhouse gas emissions in the oil sands have been reduced by about one third since 1990.

The Alberta oil sands are critical to America’s economy and energy security, and we are going to fight for their development.

Keystone XL Pipeline

The value of the oil sands is immense—there is no question about that. But there is a question of getting that oil to market. And the market has spoken—the clear choice is the Keystone XL pipeline. U.S. refiners and producers have signed 20-year contracts on Keystone XL, which can transport 700,000 barrels per day.

I should also point out that up to 25% of the pipeline’s capacity will be U.S.-produced crude oil from Montana, the Dakotas, and Oklahoma.

The U.S. Department of State has been leading an independent environmental review of Keystone XL—one of the most exhaustive ever, taking over three years to complete. The Final Environmental Impact Statement was released last month. It found that the pipeline would have no significant impact on the environment.

Yet that hasn’t prevented environmentalists from launching a full-scale attack on Keystone XL for months now. And it hasn’t stopped our Environmental Protection Agency from thwarting the process at every step.

The fact is that the Keystone XL pipeline will meet the highest safety standards. TransCanada has voluntarily agreed with the federal pipeline regulator to an additional 57 special conditions.

Pipelines remain the safest way to transport oil—safer than road, rail, or barge. Each day in the United States, more than 200,000 miles of pipelines move oil and other energy products safely to where they are needed— that’s enough pipe to circle the earth eight times.

No stimulus money is involved—it is all privately financed. If this project is approved at year’s end, TransCanada is ready to put 20,000 Americans to work early in 2012. The project will also create 250,000 jobs, inject $20 billion into the U.S. economy, and pay more than $5 billion in taxes to local counties over the lifetime of the project.

More than anything else, Keystone XL offers Americans an opportunity to improve their energy security. The United States has a choice: It can secure access to a stable and reliable supply of oil from Canada—where human rights and the environment are protected—or it can continue to be overreliant on imports from nations that do not share our interests or values.

Canada has choices as well. In the face of years of American delays, a burdensome U.S. regulatory regime, and environmental opposition, Canada can find another route and another customer. It can ship the oil west to the coast of British Columbia and on to Asian markets.

Partnership to Fuel America

The U.S. Chamber of Commerce—and its Institute for 21st Century Energy—don’t want to see that happen. In fact, we have recently launched the “Partnership to Fuel America,” a major new initiative designed to build a stronger foundation for the U.S.-Canadian energy relationship.

Dozens of companies and associations have already joined this partnership. We’ve put boots on the ground in the pipeline states—and in many neighboring states—to encourage businesses large and small to support the development of Canada’s oil sands and to complete Keystone XL.

The Chamber and its Energy Institute are applying the full range of our resources in these efforts, including social media and newspaper ads. We successfully lobbied the U.S. House to pass the North American-Made Energy Security Act, which will help facilitate the federal permit approval process for Keystone XL and provide a clear deadline for a decision.

Our in-house law firm, the National Chamber Litigation Center, helped convince a federal district court to dismiss a lawsuit brought by environmentalists intended to prevent the U.S. Department of Defense from purchasing fuels derived from Canadian oil sands.

We are mobilizing our partners and grassroots supporters to participate in the State Department’s public hearing process to ensure that the voice of the business community is represented.

So we are 100% committed to a strong and vital energy partnership between the United States and Canada … and to an energy-secure North America.

U.S. Energy Policy

At the same time, we’re trying to get our country moving to develop more of our own vast resources. I understand that many Canadians—and other counties throughout the world—look at U.S. energy policy and scratch their heads. What are they thinking?

America is sitting on huge supplies of energy on its land and off its coasts. It can access it through methods like hydraulic fracturing more cheaply, safely, and efficiently than ever before. Yet we’ve locked most of it away and tossed the key. Some 97% of federal offshore lands and 94% of federal onshore lands remain unleased.

What are we denying ourselves? All told, onshore federal lands contain 24 billion barrels of oil—and that’s just the beginning. The United States is believed to have more than 2 trillion barrels equivalent of oil shale and oil sands resources—more than the total proven global reserves of conventional oil.

The Outer Continental Shelf of the United States is estimated to contain enough natural gas to meet all domestic industrial and commercial needs for almost 30 years.

We are the Saudi Arabia of coal—it’s cheap and abundant, and technology is helping to make it cleaner every day.

A new generation of nuclear power plants could provide enormous amounts of energy with no greenhouse gas emissions—and more safely than ever before. Nuclear is a very important part of our energy mix … and it should be a larger part, too.

Instead of producing this energy for sale at home and abroad, creating jobs, generating government revenues, cutting into deficits, and strengthening our national security, we are diddling and dawdling and twiddling our thumbs.

This is not a prescription for economic success. This is a prescription for economic stupidity.

Shortsighted government policies, a legal system run amok, extreme environmentalists, and antigrowth advocates have stacked the deck against U.S. energy production, economic growth, and national security.

With our flawed permitting system and ample opportunities to sue, it’s practically impossible to build anything in America anymore. A vast web of complex and Byzantine regulations, the threat of lawsuits, and endless delays repel financing. It’s simply not worth the trouble.

Too often, permits have become a political tool to stop unwanted projects—and not just energy development projects, but infrastructure projects like transmission lines. Even wind turbines are being blocked because they kill birds.

And when many in Congress and the administration look at our energy companies, what do they see? Not an answer to many of our problems—jobs, security, manufacturing, and innovation. What they see is an industry they can demonize, a cash cow industry on which they can impose punitive taxes.

Everyone in Washington is pledging his or her allegiance to the creation of jobs. Well, what about energy jobs? Let’s take stock.

Nearly 190,000 new jobs could be created by 2013 if offshore production in the Gulf of Mexico returned to pre-moratorium levels.

In Alaska, opening up energy production off the coast would create 54,700 jobs throughout the country.

By expanding oil and gas exploration on federal lands, we could create 530,000 jobs, reduce imports by 44% by 2025, and increase government revenues by
$206 billion.

Expanding the development of the nation’s massive shale gas deposits would create hundreds of thousands of jobs and help bring steel and chemical manufacturers back to America.

We need to come to our senses. We need to get our act together. We need to understand the consequences of what we’re doing. Americans need to ask themselves: Do we want to continue to be an economic superpower? Do we want to retain our reputation as a can-do country? Do we want jobs and economic growth?

If some politicians and activists get their way, then what? How do we power and grow our economy? How do we maintain our standard of living and our way of life?

The U.S. Chamber is a strong supporter of energy efficiency and alternative fuels—our record proves it. But by any reasonable estimate, we are decades away from ending our reliance on traditional fuels, if ever.

Ultimately, a lack of a secure and abundant supply of energy will grind our economy to a halt, impoverish our citizens, and destroy our competitiveness.

This is no way to run a great country.

The U.S. Chamber is engaged in a major effort to turn this situation around. We are fighting at the federal and state levels to bring common sense to our regulatory systems … to streamline the permitting process … to reform our legal system … and to build the case among lawmakers and the public that abundant and affordable energy is the solution to many of our economic challenges—not the problem.

Without economic growth, we can’t create real, lasting jobs and a prosperous quality of life. Without economic growth, we can’t balance the budget, pay down the debt, or care for the growing number of the elderly and the sick. Without economic growth, we can’t adequately defend our nation and contribute to peace and security in our neighborhood and across the globe.

Ladies and gentlemen, creating that economic growth depends on having a diverse, affordable, and plentiful supply of energy. It’s that simple. It’s that clear. And it’s time that all Americans and our leaders wake up to this fundamental reality.

The Obama administration has said some of the right things—and has even taken some small but appreciated steps in the right direction. But what the job creators and workers of America are looking for is simple.

The administration must allow exploration of our Outer Continental Shelf and ensure that the permitting process is fair, predictable, timely, and transparent.

It must revise its five-year leasing program to include more areas in the Gulf of Mexico, Alaska, and the Atlantic Coast that were included in prior versions of the plan.

It needs to reverse recent policies that have significantly reduced the areas available for oil and natural gas exploration on federal lands.

In addition, it should allow the private sector access to vast oil shale resources to develop and test new production methods with significantly less environmental impact.

And by all means, it should give final approval to Keystone XL.

The administration must end EPA’s disastrous war against traditional sources of energy that is destroying jobs, undermining our energy security, and threatening to send prices skyrocketing.

Greater access to our resources is one issue; building the infrastructure to transport them to where they are needed is another. That’s why we urge the president to immediately issue an executive order to streamline the permitting process for energy infrastructure and other projects.

The order should limit environmental reviews to six months and require agencies to coordinate with one another to speed up the process.

These commonsense steps should be taken immediately. Together, they would put America on the path to more jobs, more growth, and greater energy security.

Conclusion

The theme of this year’s conference is “Building Foundations in Shifting Sands.”

A solid foundation for a competitive and economically vibrant North America is an abundant and affordable supply of energy. The U.S.-Canada relationship must remain a bedrock of that foundation.

In many respects, Canada is not building a foundation on shifting sands but on oil sands … and wisely so. In contrast, America’s failed energy policies have left us sinking in quicksand.

To ensure jobs, growth, and competiveness for our continent, the United States must immediately begin increasing its domestic production and strengthening its energy partnership with Canada.

The alternative is an America in decline, a North American market on the ropes, and a dark future for all of our citizens.

My promise to you today is that the Chamber of Commerce of the United States of America will never stop fighting for sensible energy policies that will help secure a bright future for us, our children, and our grandchildren.

Thank you very much.

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