U.S. Chamber of Commerce Address

Check against delivery

Introduction

Thank you very much, Jodi (Bond).

Ladies and gentlemen, I am pleased to be here. And I appreciate the chance to speak with members and friends of the United States Chamber of Commerce.

The US is a special place for us as Canadians. We are indeed family.

[Personal story]

It is a pleasure to address an organization that is so upfront about its support for free trade and its support for free markets.

As much as these values are fundamental to our economy and to the prosperity we enjoy in both our countries, such views are not universally welcomed on either side of the border.

There have always been those who hold to a persistent, ideologically-driven refusal to recognize the benefits of free markets.

It is a pleasure for me to be here as these voices become louder to remind us that we cannot take for granted the fundamental principles upon which our economy and our free enterprise are based.

These principles must be defended — daily and persuasively — by those who understand how markets operate.

How an economy grows.

And how wealth and jobs are created and economies continue to flourish.

I know the US Chamber of Commerce understands all these things. And I want to thank you for advocating steadfastly on this behalf and for being here today.

You recognize threats to free trade and to the integrated economy our countries share and you understand they really are threats to our growth, our security and our quality of life.

And I want to speak today about the importance of that integrated economy, in particular as it relates to the North American energy sector.

As Premier of Alberta, I consider this a fundamental responsibility.

Partly, this is because my home province is a resource-rich exporter that prides itself on free enterprise and is part of the most trade-dependent country in the G7.

However, I am also here today out of personal conviction.

I have spent most of my life working in politics and finance.

I have seen the data and I have met people from Wall Street to Main Street who drive the North American economy.

My experience has made me an unabashed free trader. I think it is something worth fighting for.

Energy integration

Of course, no one better understands the genius of free markets than the people of the United States of America.

Your nation has long accepted that, as put by the economist Milton Friedman:

"There is no alternative way… of improving the lot of ordinary people that can hold a candle to the productive activities that are unleashed by a free enterprise system."

We can see the truth of that statement in our vast, efficient and effective integrated North American markets, sheltered and framed initially by the Canada-US Free Trade Agreement and subsequently by NAFTA.

This economy fuels prosperity on both sides of the Canada-US border.

That is certainly the case in my province of Alberta.

Close to 90 per cent of Alberta's exports are destined for the US

Trade between Alberta and the United States is enormous - $75 to $100 billion per year, in excess of $200 million per day.

And from Alberta's end, that trade includes a variety of sectors.

Certainly it encompasses oil, but also machinery, petrochemicals, fertilizer, financial services and forest and agri-food products.

In fact, of Alberta's top 20 export destinations, 17 are US states.

Fully two-thirds of Alberta's inbound foreign direct investment originates in your country.

And 60 per cent of tourists visiting Alberta are American.

The sheer volume of these exchanges is notable and made possible by free trade.

It is free trade we have to thank for the integrated North American energy marketplace.

It is a market that is dynamic, fast-paced and responsive to the most subtle of signals from policymakers and the global supply and demand balance.

And it adapts with breathtaking speed to seize opportunities afforded by technological advances, as well as changes in supply and demand.

Our collective success in this respect is not an accident. It has been achieved through hard work and discipline.

The relationship between Canada and the US is comprised as it has been put of "one part proximity and nine parts good will and common sense."

Those are not my words, ladies and gentlemen. They belong to President Harry Truman. And though he spoke them 68 years ago, they ring just as true today as they did back then.

Or as President Kennedy put it, and as Jodi said, "economics has made us partners."

This is surely the case.

I can imagine no clearer illustration than the North American energy marketplace.

Energy matters profoundly to the national interests of both Canada and the United States.

Our two countries have successfully constructed the largest and most integrated free enterprise market on Earth founded entirely on free trade.

It is a unique phenomenon that remains unmatched anywhere else in the world.

No one else has built anything like this.

This integrated energy economy has multiple centres of excellence...

...among them are Houston and Alberta's largest city, Calgary, where many of the big decisions about resource development are made and where industry leadership is concentrated...

...while the centres of finance are New York and Toronto.

The companies that make up this sector share the same knowledge base, the same technological advances, managerial excellence and labour skills.

And they mobilize very quickly to use technological breakthroughs to achieve energy production increases.

As I learned as a banker, these markets move so quickly, with breathtaking speed, that they outpace the capacity of even the most sophisticated analysts to predict what's going to happen next.

And we have surely seen that over the course of the last 5 years.

All this makes North America's integrated energy market a profound economic force for the advancement of society on both sides of the border — and if we seize the opportunity, for the advancement of society globally.

And the energy renaissance that is underway right now in Canada and the United States is only augmenting the positives we share.

Canada and the United States have increased their production of natural gas and oil far faster than anyone had predicted.

The US is passing, and as I speak may have already passed, Russia as the number 1 global producer of oil and gas.

And American shale oil production has soared, even as domestic US oil consumption stays static due to more efficient fuel economy standards.

Substitution of natural gas for other fuels, especially coal, is also taking place in North America faster than anyone could have possibly predicted.

And a steady stream of export licences for American liquefied natural gas facilities is under review.

Your country is on track to become a net LNG exporter by next year. And will in time become a significant force in terms of world exports.

Meanwhile, in Canada we are producing more hydrocarbons than ever before.

We produce more than 3.5 million barrels of oil per day — the bulk of it from the oil sands in my home province.

That total could reach 5 to 6 million barrels per day by 2030.

If we stand back from those stats, the point is this, this energy renaissance has opened up a triple North American competitive advantage over the rest of the industrial world — a security advantage, an industrial feedstock advantage and an environmental advantage.

These opportunities that have been afforded us were unimaginable 6 years ago in Copenhagen.

And I would like to address each of these in turn, because realizing how much we gain from North American energy integration is the key to bolstering it.

Security advantage

Let me begin with national security, which has been the central preoccupation of US foreign policy for at least the last century.

This has been more important on the southern side of the border given the place the US occupies in the world.

Historically, the need to import a substantial portion of this country's oil from suppliers outside of North America has undermined US national security.

Each and every day, we are reminded of the risks such dependency imposes amid the emergence of non-state actors in the Middle East and fresh tensions with Russia.

But this situation is changing for the better.

Escalating oil production in both Canada and the US, along with improved abilities to extract unconventional hydrocarbons, like shale oil here and oil from oil sands in Alberta...

...are transforming the pipe dream of energy independence to probability.

That dream is only a few years away from realization.

With the added benefit of Mexico as a trading partner, it is surely within our grasp.

So the United States is in a position of strength as it becomes less vulnerable to supply shocks.

American decision-makers will soon be able to dispense with the political calculus that comes from a dependency on a worldwide network of energy suppliers — many of them regimes that have proven themselves to be fundamentally opposed to American values and American interests.

Canada has a major role to play in this development.

Alberta ships 2.5 million barrels of oil a day into the US marketplace.

We are the largest supplier of crude oil to the United States of America.

We contribute more than 25 per cent of all American imports.

Total Canadian production accounts for fully one-third.

This is almost double what the US's next largest supplier, Saudi Arabia, provides.

These are today's market facts.

As an added bonus, roughly 90 cents of every dollar spent on Canadian oil returns to the US economy thanks to the integrated marketplace we share.

Over 1,900 American companies comprise of the supply chain in the Canadian oil sands.

Canada's pipeline and distribution network is also instrumental in delivering natural gas to markets in the lower 48 states.

We are proud to support the efforts of your great nation — as your neighbours, partners and friends — to increase security in what is an otherwise dangerous world.

Just as we were proud yesterday, the ambassador and myself, as Canadians, to witness the awarding of the Congressional Medal of Honour to the military veterans of the Devil's Brigade...

...the very first special forces unit created jointly by Canada and the United States comprised of 900 soldiers from each country.

Yesterday, most of them in their nineties, were honoured for what they have done for both of our countries.

We have been partners, friends and allies for a long time.

Industrial advantage

The industrial advantage of this integrated energy market is equally significant.

Having an abundance of hydrocarbons is a tremendous boon for intensive users of energy and petroleum feed stocks.

They include the cement, fertilizer and petrochemical industries, as well as all forms of heavy manufacturing.

As we know, we have begun to see a reshoring of jobs as a result of this advantage.

We are now opening up a massive energy security, energy cost advantage over other industrial places in the world.

But governments must cultivate an environment in which industry can readily maintain its competitive edge.

Above all else, this means building the necessary infrastructure to allow free markets to flourish, which includes US access to Canadian heavy oil.

We need to continue to enhance and invest in the network of pipelines and transmission lines that knit our energy economy together.

Last month, for example, I attended the grand opening of Enbridge's Flanagan South and Seaway pipelines in Freeport, Texas.

Those pipelines stretch nearly 700 miles from Illinois to Oklahoma south to Freeport. They are a vital link in the web connecting Canadian producers with American consumers.

600,000 barrels a day of Canadian crude oil now flows through the Flanagan South and Seaway pipelines to American refineries along the Gulf Coast...

...the largest collection of refineries anywhere in the world.

This creates American jobs. Permanent jobs. Refinery jobs.

Flanagan South is an example of the mutual benefits that come from the integrated energy economy of which I speak.

At the other end of the spectrum, however, we have the Keystone pipeline.

I have long been a vocal advocate for the Keystone pipeline and for its approval by the US government.

In my view, this project is in the best interest, the national interest of our two countries.

The oil it would carry in part would be produced in my province under environmental standards that are at least as high as those that apply to any barrel of oil produced in the United States — and much, much higher than those that apply in other countries that are allowed to export their oil to the US without interference.

As we know, the US has historically addressed its energy security issues via a policy of diversity of supply — facilitating and opening markets for energy trade and the construction of infrastructure to facilitate the import of oil from other marketplaces.

Canada has been one of those suppliers. Proudly so.

This is really what has made the Keystone delay and uncertainty so confusing to Canadians.

I want to be clear that the energy relationship shared by our two nations, by Alberta and the US, is much bigger than any single pipeline.

And so I say to you today that we need a renewed focus on the bigger picture and the longer term.

We need to keep our minds set on building and capitalizing upon the triple advantage I mentioned in my comments.

These are North American advantages, not merely Canadian, nor solely American.

We must capitalize on them.

Environmental advantage

North America's environmental advantage also comes from the further integration of energy markets and infrastructure, which prepares the ground for closer cooperation on environmental permitting, standards and progress.

There are many with innovations to share in this industry.

And Alberta is certainly amongst them.

We recognize that energy production comes with global consequences.

In Alberta, we believe that if you are in the energy business, you are in the environment business also.

And we have long been leaders in taking action.

Ours was the first jurisdiction in North America to regulate industrial greenhouse gas emissions with a comprehensive policy that featured a price on carbon.

This regulatory approach has prevented approximately 51 megatonnes of greenhouse gases from entering the atmosphere.

That is like taking more than 10 million cars off the road.

Under this policy, Alberta was the first on this continent to put a price on industrial carbon.

To this day, we are one of the only jurisdictions in the world that produces oil that attaches a price on carbon emissions.

Emitters are required to meet certain defined targets from a given baseline, and if they cannot, under our policy they have a number of options...

...they can purchase a performance credit, they can purchase an offset credit, or they can pay into a climate change fund.

The fund has collected just over half a billion dollars.

All of those monies have been administered independent of government and are being invested in hundreds of millions of dollars in clean energy projects, technology and adaptation projects.

Given our inherent politeness as Canadians, this is not restricted only to applicants from Canada, but available to anyone who can demonstrate capacity to advance science and reduce emissions.

We have also encouraged energy efficiency at the individual level.

We have initiated a program that enabled fleet operators to install fuel-efficient technology in their vehicles.

We have adopted a renewable fuel standard requiring the blending of ethanol and biodiesel.

Even with these efforts, we know tailpipes remain a significant source of emissions throughout the world.

So my province invested $2 billion to support new and expanded public transit, knowing that in Canada, a transit rider creates 65 per cent fewer emissions than someone in a motor vehicle.

Underpinning all of our reductions efforts is a robust, scientific environmental monitoring system, which is arm's-length from government and where the data is publicly accessible to all.

Because we have nothing to hide in terms of environmental performance.

And my government is working to renew and to update a climate change strategy that will demonstrate how Alberta will continue to do its part.

Energy producers are also coming to the table with ideas.

We have something in Alberta called COSIA.

COSIA is a consortium of all the major energy producers in our province, a number of which are American companies, who set aside their intellectual property arguments and freely exchange intellectual property...

...so they can pool environmental technologies and more quickly advance and distribute environmental progress through the industrial infrastructure.

No one else in the world does this in this manner.

By purchasing Alberta oil, customers help enhance these commitments.

These are just a few examples of promising endeavours paving the way for a greener future.

But I will be the first to admit that if we are to have a meaningful effect in protecting the environment...

...and if we are to capitalize on the full potential of North America's integrated economy and energy markets, we will have to think bigger.

We will have to lead the world as North Americans.

That is why we have put in place a comprehensive policy dealing with investments in carbon capture and storage.

This is game-changing technology that reduces, rather than averts, carbon emissions from fossil fuels.

Alberta is currently investing $1.3 billion to implement two commercial-scale CCS initiatives.

We are a province of only four million people; this is an enormous investment.

It amounts to more than $300 for every man, woman and child in Alberta.

No one in the world has made CCS investments on such a scale.

When up and running, our projects will lower greenhouse gas emissions by 2.76 million tonnes per year.

One of them, the Quest project, will be the first to take emissions from an oil sands upgrader and store them more than one mile underground in the earth.

Alberta is investing more than $700 million in that project. People are interested in this.

And earlier today, I attended a briefing about the US Department of Energy and Shell's upcoming collaboration for research on CCS monitoring through the Quest project.

Knowledge-sharing is an important part of what we must do as North Americans.

If North America is serious about sustainability, many more partnerships like this are essential.

At the end of the day, greenhouse gases do not respect borders. Climate change is a global issue, and no one can afford to approach the problem in isolation.

I have long been an advocate of harmonized North American standards when it comes to the environment and certainly when it comes to industrial emissions.

Alberta intends to be a participant in any such approach.

It would provide certainty for businesses and ensure our North American competitiveness with the rest of the world.

And ensure we lead the world, rather than follow it.

North Americans would have the advantage of knowing what's expected of them as they attempt to conform to evolving rules, knowing our competitiveness would be protected on both sides of the Canada-US border.

It would be better for the environment, as it would expedite compliance, expedite environmental performance in both the US and Canada.

I know this because I witnessed how our respective countries can do business together and can achieve environmental outcomes together.

When I was Canada's minister of the environment, I worked together with the Obama administration as Canada's negotiator.

We arrived at the motor vehicle emissions standards which have been implemented on both sides of the border.

And you know ladies and gentlemen, they remain to this day the single most effective thing that has been done to reduce carbon emissions on both sides of the Canada-US border.

We did that together as North Americans.

Unfortunately, this trend toward greater cooperation across provincial, state and national boundaries is waning on the environmental front as opposed to expanding.

And fragmentation is replacing the unity of purpose we need to advance environmental objectives.

In some US jurisdictions, we are seeing policy proposals that are designed to exclude Canadian oil from US markets, while giving a free pass to comparable oils from other countries, like Venezuela, or domestic products with the same characteristics as Canadian products.

And opposition has crystallized around infrastructure projects, like pipelines, that are essential to safely move energy to markets from where it is produced to where it is used.

We appear to be heading for the worst of all worlds: a proliferation at the sub-national level of diverse standards that apply to some kinds of oil and not others, some forms of energy and not others, some methods of transportation and not others, some pipelines, but not others.

My friends, this is distinctly not the genius of free trade.

Having served as Canada's Environment Minister, I can testify to the utility of broader measures and the necessity of getting things done together at the highest levels.

While I was in cabinet, I also led the creation of Canada's thermal coal policy - the phase out of burning thermal coal - because if you are concerned about carbon emissions, you must surely be concerned about coal...

...since that is where 40 per cent of the carbon in the atmosphere actually came from that was man-made.

And those policies of course are being followed today in the United States.

And inspired by Teddy Roosevelt, our country's national parks system was expanded by almost one-third while I was Canada's minister of the environment.

In that role, I learned of the urgency of establishing common ground on the environment, as we have on the economy.

I represented Canada at Copenhagen, I worked together with our American colleagues, and I have the scars to prove my attendance at the Copenhagen conference.

Discord there only harmed Canada and the United States.

And frankly, it sold our achievements short.

And it needs to said that, though this was impossible to imagine at Copenhagen, the country that has had the greatest environmental achievements in the time since Copenhagen was in fact the United States.

Conclusion

As I come to a close then, I see it I suppose in this way, there are three goals Canada and the US should pursue in order to make the most of the triple opportunity that stems from free trade and integrated energy markets.

First, we must strengthen rather than weaken the policy framework of the North American energy marketplace.

We must return to the principles of free trade that are enshrined in NAFTA, and address energy-related subjects on a continental basis...

...instead of allowing ill-informed prejudices to detract from the efficiency of markets at the very moment that changes in technology are placing energy independence within our reach, if we are smart about it.

Secondly, we must establish North America as a leader in environmental performance.

Mark my words, if we are shrewd about this, our environmental attributes will be our best advantage in the global economy.

Ecosystems stretch across borders like trade flows.

And healthy ecosystems are indispensable to our quality of life.

Market-driven solutions are the quickest and most practical solutions to managing climate change, and if you doubt that go to Beijing where you can't see across the street on a business day.

We must move swiftly in this area to pre-empt non-tariff trade restrictions from masquerading as environmental policy and damaging what they are supposedly intended to protect, namely the prosperity of our North American economy.

The third goal is for Canada and the US to enable the continued development of a safe, efficient and modern energy infrastructure system.

Policy coordination is not enough.

We must construct projects that will yield tangible results.

We must match rhetoric with action.

None of this will be easy.

But I find always inspiration in the words of one of your more colourful presidents, Teddy Roosevelt.

"We cannot avoid meeting great issues. All that we can determine for ourselves is whether we shall meet them ill or well."

With the right choices, Canada and the United States can fully reap the rewards of our economic partnership.

There is no smarter choice we can make than to strengthen it by nurturing free trade and deeper economic integration.

It is the spirit of free enterprise.

Free markets produce impressive results when they are allowed to work.

And ladies and gentlemen, it is time we gave them space to do exactly that.

Thank you.