Mexico is Reforming its Energy Industry

Next to the United States and Canada, Mexico is the largest oil-producing country in the Western Hemisphere.  Mexican President Enrique Peña Nieto recently enacted energy reforms granting companies access to large, untapped reserves in Mexico - estimated to be greater than 110 billion barrels. This is the first time since 1938 that Mexico's energy sector is inviting increased local competition and opening opportunities in foreign direct investment, ending the 75-year monopoly held by Pemex, the national oil company. Energy industry experts believe Mexico will be bringing in more than $1 trillion in new investments because of this action.

Adding international experience and expertise will boost energy production within the country. While other countries are expressing interest, U.S. firms are seeing opportunity because of close proximity and growing relationships between the two countries.

According to the U.S. Congressional Research Service,

"The United States, Mexico, and Canada have made efforts since 2005 to increase cooperation on economic and security issues through various endeavors, most notably by participating in the North American Leaders Summits. The most recent Summit was hosted by President Enrique Peña Nieto in Mexico on February 19, 2014. The three leaders discussed issues on the economic well-being, safety, and security of North America and issued a joint statement renewing their commitment to regulatory cooperation in key areas or interest."

Manufacturing Edge Returns to US & Mexico

The economics of global manufacturing are shifting. For decades, people have been saying that manufacturing costs are cheap in regions like Eastern Europe, Latin America, and most of Asia. On the other hand, the United States, Western Europe, and Japan have been viewed as having high costs. That worldview is out-of-date according to a new report released by The Boston Consulting Group. Costs have been shifting and the competitive edge now belongs to the U.S. and Mexico.   While the common narrative was still that American manufacturing was dead and done, heavy machinery manufacturer Caterpillar has been shifting production of construction equipment from Japan back to the U.S., creating hundreds of jobs.

Designed with executives of export manufacturing firms in mind, the BCG report describes how steady changes in a variety of factors, such as wages, productivity, energy costs and currency values, are redrawing the map of global manufacturing cost competitiveness. While seemingly subtle, these changes are dramatic.  Some of the shifts in relative costs are actually quite surprising. A decade ago, not many people would have predicted that Brazil would now be one of the highest-­cost countries for manufacturing— and that Mexico could be cheaper than China. Costs in Eastern Europe and Russia have risen to near equivalence with the U.S.

Key factors behind all these changes vary widely by economy. The BCG researchers say, "skyrocketing labor and energy costs have eroded the competitiveness of China and Russia. A decade ago, for example, manufacturing wages adjusted for productivity averaged an estimated $4.35 an hour in China and $6.76 in Russia, compared with $17.54 in the U.S. Again, adjusted for productivity differences, labor costs have roughly tripled in both countries, to an estimated $12.47 an hour in China and $21.90 in Russia. Average productivity-adjusted manufacturing labor costs in the U.S. have risen by only 27 percent since 2004, to $22.32. The cost of industrial electricity increased by an estimated 66 percent in China and 78 percent in Russia, while the cost of natural gas soared by an estimated 138 percent in China and 202 percent in Russia from 2004 to 2014."

As Forbes reports on the BCG study, the U.S. has emerged as the lowest-cost manufacturing location of the developed world, roughly on par with South Korea. The manufacturing-cost gap between the U.S. and other developed countries widened significantly between 2004 and 2014. Average U.S. costs are now estimated to be 9 percentage points lower than the UK, 11 points lower than Japan, 21 points lower than Germany, and 24 points lower than France.

According to the study, the U.S. is even approached cost-parity with some nations of Eastern Europe.  Our cost gap with China “has shrunk dramatically” and, BCG researchers said, “if the trend of the last ten years continues, will disappear before the end of the decade.” Labor is one key to the growing U.S. competitive advantage. The U.S. has one of the developed world’s most flexible labor markets, ranking as the most favorable economy in terms of labor regulation among the top 25 manufacturing exporters. The U.S. also has by far the highest worker productivity among the world’s 25 biggest manufactured-goods exporters. Adjusted for productivity, U.S. labor costs are an estimated 20% to 54% lower than those of Western Europe and Japan for many products.

Prices for natural gas have risen around the world, but have fallen in the U.S. by around 50% since 2005, when large-scale recovery from underground shale deposits began in earnest." Natural gas currently costs three times more in China, France, and Germany and four times more in energy strapped Japan. The energy component will be a hard one for competitors to tackle in the years ahead, BCG researchers said.

Forbes contributor Kenneth Rapoza continues by saying, "For Mexico, Latin America’s second largest economy has regained its status as a leading low-cost manufacturer, replacing China on many product lines."

In 2000, Mexican manufacturing labor was roughly twice as expensive as China’s. Since 2004, Chinese wages have risen four fold. Mexican wages also rose, but by much less in pesos and even less in dollar terms while the Chinese yuan has gotten stronger over the same period.  The report said that even though China has had higher productivity growth, the average Mexican productivity-adjusted labor costs are now estimated to be 13% lower China’s. Add attractive electricity and natural-gas costs, and Mexico’s total costs are estimated to be 5% below those of China, 9% below those of the U.S., and 25% below those of Brazil, Latin America’s largest economy.

“Many companies are beginning to see the world in a new light,” said Harold L. Sirkin, a BCG senior partner and co-author of the report. “They are finding that many old perceptions of low-cost and high-cost countries are out of date, and they are starting to realign their global sourcing and production networks accordingly.”

The Case for the Export-Import Bank

Press Release for Immediate Publication:

Too often, politics hamper the ability of business to expand and put Americans to work. What used to be an important bipartisan reauthorization of the Export-Import bank has now fallen firmly in the cross-hairs of some members of the GOP. Charges of crony capitalism and big governmental overreach flow freely from opposition tongues. "Let the private sector fill that space in the market. Those big companies don't need the Ex-Im Bank, they can get capital on their own," scream critics. While I can appreciate the basis for their argument, their facts on this issue are off base and in some cases, just flat out wrong.While numerous Presidents have lauded the successes of the Ex-Im Bank, I want to quote two former U.S. Presidents for context:President Ronald Reagan, January 30, 1984: "In order for the United States to maintain its strong position in foreign markets, it is important that the Congress pass the Export-Import Bank bill and avoid attaching unnecessary encumbrances."

President George W. Bush, June 14, 2002: "I have today signed into law S. 1372, the Export-Import Bank Reauthorization Act of 2002. This legislation will ensure the continued effective operation of the Export-Import Bank, which helps advance U.S. trade policy, facilitate the sale of U.S. goods and services abroad, and create jobs here at home."

The Ex-Im Bank's primary mission is American jobs. By financing the export of American goods and services, the Ex-Im Bank has supported 1.2 million private-sector American jobs. 205,000 in 2013 alone. This April, the United States exported $193.3 billion of goods and services according to the Bureau of Economic Analysis (BEA) of the U.S. Commerce Department. Exports of goods and services over the last year totaled $2.3 trillion, which is 45.1 percent above the level of exports in 2009, and have been growing at an annualized rate of 9.0 percent when compared to the 2009 level.

In fiscal year 2013, Ex-Im Bank approved more than $27 billion in total authorizations. For the year, the Ex-Im Bank approved 3,413 transactions for small-business. Of the total number of transactions approved just last year, 89 percent were for small business, the backbone of American Main Street economies. While critics tend to overlook this important fact, the disparity in the total number of transactions for big and small business make the argument for reauthorization even stronger.

For those that do not understand the composition of the Ex-Im Bank, it is an independent, self-sustaining agency that fills in the gaps in private export financing at no cost to American taxpayers. It is the official export credit agency of the U.S. The Bank provides a variety of financing mechanisms including working-capital guarantees, export-credit insurance, and financing to help foreign buyers purchase U.S. goods and services. In the past five years, the Bank has earned $2 billion more than the cost of its operations and after covering loan loss reserves. That is money that is put in the Treasury to help reduce the federal deficit.

The Ex-Im Bank does not compete against the private sector but acts as a complimentary player. While they work to fill in the gaps through loans, guarantees, and insurance programs, the private sector lenders are Ex-Im Bank partners. During the FY 2013, 98% of the Ex-Im Bank's transactions involved commercial banks.

How does Colorado benefit from the Ex-Im Bank? Since 2007, 93 Colorado exporters have use the Ex-Im. 68 of those exporters are small businesses. International trade (both exports and imports) supports 680,000 Colorado jobs. These jobs are related to both large and small companies from farms to factories to headquarters of Colorado's globally engaged firms. Colorado alone exports tens of billions of dollars in goods and services annually. Exports have been shipped to 210 countries with top countries like Canada, United Kingdom, Germany, China, and Mexico. Today, more than one in five jobs depend on international trade!

Rhetoric is tossed around. A few members of Congress have made "killing" the Ex-Im Bank one of their priorities, but I feel we must hold politicians to the same standard as they ask us to do as citizens- to look at the facts and make an informed decision. Money returned to the Treasury, supporting and growing U.S. jobs, helping manufacturing and other key industries remain viable in America and putting Americans to work. From companies big and small, from the rural farmlands to high rise corporate America, the Ex-Im Bank has been a vital and necessary tool for continued growth and prosperity. Why cut off one of the most efficient, low risk, successful programs that contributes to the "jobs, jobs, jobs" focus that is so important to both political parties?

Please let your member of Congress know that you support continued American prosperity, increased opportunities to promote and sell goods and services and a program that lets the world stage know that the U.S. is open for business. Your member of Congress can be found using this site:http://www.house.gov/representatives/find/ By contacting Congress and letting them know you support the Export-Import Bank reauthorization, you can send a strong message that we support Colorado businesses.

This is one program that business of all sizes and citizens from differing political affiliations should stand together with locked arms and tout the ongoing success and viability of a program that has carved into the debt while at the same time supporting working families all across this great nation. Let's not say we are open for business and then shut down one of the tools that helps grow our economy. I urge all members of Congress to look at the proposed changes and to make the right choice for American business and reauthorize the Export-Import Bank.

Clinicas: Continuing the Conversation in Mexico

In the summer of 2013, Denver played host to the Biennial of the Americas, which is a celebration on art, culture, dialogue and ideas for countries in the western hemisphere. At the 2013 event many countries were represented in day-long clinicas and symposiums to address topics that affects all countries. The Biennial of the Americas describes clinicas as “a diverse and innovative gathering of leaders from across the Americas will participate in a series of facilitated, peer-to-peer workshops called clinicas. Clinicas are unique to the Biennial of the Americas experience as they offer a select group of invited specialists in their field the opportunity to interact with other innovative though leaders on a variety of topics.” The invite-only attendees discussed in an open dialogue issues such as environment and public health, water, energy, innovation, conscious business practices, education, technology, and the new normal.

The viewpoints from the morning clinicas were then reported out to a public audience in the evening while the content was used to drive the panel discussions.

The education conversation has recently continued in Mexico City during the trademission this week with Governor John Hickenlooper and various leaders from Colorado. The clinica topic of education was discussed with greater in-depth analysis of physics, soft skills, scale and socioeconomic issues and workforce development. The next clinica coversation is on energy and will take place during the week-long trademission.

Photo Credit: The Biennial @thebiennial

Colorado Leaders Create Collaborative Dialogue with Mexico

Today, Gayle Dendinger, CEO of ICOSA Media will join Colorado Governor John Hickenlooper and seventy other various leaders from Colorado businesses on the Biennial of the Americas trade mission to Mexico City. This four day trade mission is sponsored by the Colorado Office of Economic Development and International Trade and is meant to build ideas, connections and a collaborative dialogue for the upcoming Biennial of the Americas to be held in Colorado in 2015. Participants include Anadarko Petroleum Corporation, Museum of Contemporary Art, Gill Foundation, Urban Market Partners, Colorado State University, CH2M Hill, Bravo! Vail, Vail Resorts Inc., Denver Museum of Nature and Science, CIMCO Private Wealth, Colorado School of Mines, Unreasonable Institute, ICOSA Media, Denver Hispanic Chamber, Project C.U.R.E., Chamber of the Americas, Lockheed Martin, Colorado College, Denver International Airport, Smithsonian, Suncor, Colorado State University…just to name a few.

“The Biennial of the Americas provides an international platform for leaders in business, government, civil society, and the arts to examine the significant issues impacting life in the Americas.” For more information on the Biennial please visit, www.biennialoftheamericas.org.

To view coverage of the 2014 Biennial of the Americas please visit, http://bit.ly/B_A Participants will arrive this afternoon into Mexico City and will start the evening with a welcome reception hosted by Vail Resorts that will include leaders from Colorado and Mexico City.

Photo credit: www.luc.edu

Increasing Trade Using Commercial Diplomacy

In his book “The World Is Flat,” Thomas Friedman writes about globalization, a process in which diverse economies from distant regions of the world are coming together in a single global economy. It is commonly accepted that we live in a globalized world, where the most recent advances in technology enable instant information exchange and communication, efficient bulk transportation of goods and services and worldwide adoption of the universal financial instruments. Globalization brings growing awareness of the common problems that have to be solved on a global scale. And whether it is drastic changes in weather patterns, environmental pollution or shortage of water, globalization makes leaders come together in international task forces and action committees to form multi-lateral agreements and resolutions.

However, we should not forget that underneath the layers of global issues requiring attention from the global community at large, there are many issues that have to be solved on a more regional basis. Because not all regions of the world are equally equipped with financial resources or know-how, even in a globalized world it all comes down to relationships and a friendly handshake, which sharpens the sense of responsibility in each partner for their counterpart.

It is that sense of responsibility that drives people to look further than just a commonly accepted solution for a problem, to find uniquely fitting creative ideas and ways to implement them to help their friends in need. By increasing the number of opportunities for such committed relationships, organizations can facilitate transition of less-developed communities from the status of humanitarian aid recipients to fully engaged contributors in their own wellbeing. This applies, by extension, to their local economies as a way of continually improving the world we live in.

While many large organizations have key connections and clout in business circles around the world, many small- to medium-sized businesses do not. That is why the World Trade Center in Utah is committed to bringing people from different regions of the world together, one handshake at a time.

Some trade missions are seen as cleverly orchestrated publicity events for the governments of these states and countries, but Utah and its team has created worthwhile and prosperous trips for the countries and businesses involved. One such example is the World Trade Centers recent trade mission with Peru.

Even though Peru is an emerging economy, its steady annual growth has shown it is serious about expanding and growing its economy. Since 2002, the country has grown on average 6.4 percent in relevant industries to Utah, including technology services, energy and natural resources and life sciences. With so many opportunities, leaders from each of Peru’s regional and municipal governments flew to Lima last fall to participate.

Officials from Peru and Utah signed a memorandum of understanding to “establish concerted actions in sustainable economic development for years to come,” said Harvey Scott, Director of International Trade and Diplomacy for Utah’s Governor’s Office of Economic Development. The memorandum has helped facilitate higher education exchanges. One of the key issues is helping Peru with sustainable models for technology and infrastructure through the help of research and innovation. Universities in Utah and Peru are collaborating on this initiative.

The World Trade Center in Utah has also completed several trade missions within the last year in Israel, the United Kingdom, the Philippines, China, Brazil, Colombia and, in early April, to Mexico, to which Utah exported roughly $550 million in goods and services to in 2013. This mission successfully helped to expand business relations with three Utah-headquartered businesses.

Looking further, the World Trade Center in Utah is working on trade missions to Ghana, Senegal, Romania, Belarus and the Middle East. As long as there is use for outside markets to increase trade and development, the World Trade Center will continue to create trade missions that not only garner business opportunities but educational ties as well. One highlight of the trade missions is the opportunities to help institute programs that garner sustainable activities that will help each host country with issues like clean air and water.

Walk Strong Foundation

By: Bridget Boyd Issue: Transformation Section: Community

A Joint Effort Transforms Lives in Veracruz, Mexico

You’ve probably heard of short-term medical mission trips where teams of doctors visit a developing nation, provide medical care, return home and then typically select a new location the following year. While these missions are a well-established and popular means of providing health care to poor countries, Dr. Michael Christie, orthopedic surgeon and co-founder of the Nashville-based Southern Joint Replacement Institute (SJRI), wanted to take this approach a step further.

Annually, more than $250 million and countless volunteer hours are dedicated to these types of trips, but Dr. Christie decided that by committing to one medical facility, the health care infrastructure of a place could be transformed and the dependency on humanitarian aid lessened, if not altogether omitted. “It’s more than just going down and doing mission trips; we’re trying to create a workable model that could be replicated in other countries and in other clinics,” explained Dr. Christie.

With the help of PROJECT C.U.R.E., the Colorado-based nonprofit organization that collects and redistributes donated medical supplies to ill-equipped hospitals and clinics in more than 120 developing countries, the Veracruz Regional Hospital de Alta Especialidad in Veracruz, Mexico, was selected. Here, medical services are rudimentary by U.S. standards, and many citizens are unable to receive orthopedic surgery because they lack funding. Even if they could afford it, the hospital is not equipped with the proper medical supplies and equipment to address the majority of orthopedic cases they receive. “Knee replacements are rare in Mexico, particularly outside of Mexico City. Last year our practice did 2,000 joint replacements. We were told that less than 10 were done in Veracruz,” said Dr. Christie.

Because of the need in Veracruz, twice a year for the next 10 years PROJECT C.U.R.E. and Dr. Christie along with his team of SJRI surgeons will return to Veracruz Hospital and deliver health and hope every time. For PROJECT C.U.R.E.’s part, they will put a 40-foot semitruck container of medical supplies and equipment in place—nearly $3 million worth of donations—for the SJRI team to use. On each two-week mission, orthopedic surgeries will be performed and new techniques will be taught to the Mexican physicians, residents, nurses, scrub techs and staff so they can continue this work and take over the work in the intermediate term.

Dr. Christie’s team provided some of the most complicated knee replacement surgeries imaginable during their first trip in November 2011. After just 10 days on the ground, the team conducted more surgeries than the hospital performed in an entire year, and patients could walk, some without pain, for the first time in their lives.

“At the end of the 20 joint replacement missions, the health care landscape in this part of the world will forever be changed,” said Dr. Douglas Jackson, president and CEO of PROJECT C.U.R.E. “Leftovers from our hospitals here in the United States—the things we don’t use—will become a foundation for the future for hundreds of people who would likely have no other hope.” he continued.

Going forward, the medical teams in Nashville and Veracruz will continue to collaborate to transform the lives of patients and build a strong health infrastructure in a place of need.

To learn more about Dr. Christie’s work or the Walk Strong Foundation, visit http://www.walkstrongfoundation.org/.

Canada And North America's Economic Recovery

Paving the Way through Energy Security & Clean Energy

These days a lot of people talk about how we live in challenging times. They’re not kidding, especially when by “challenging” they mean a freeze in international credit markets and a synchronized world economic slowdown. It’s no secret, we are in the middle of a global financial crisis, and when it comes to helping get the world economy back on track, Canada is all aboard.

Like the United States, Canada has already taken a number of actions to protect its own economy, which the International Monetary Fund predicted will continue to lead the G7 in financial growth in 2009. Canada is also committed to help stabilize global financial markets, restore credit flow and renew economic prosperity around the world. It will address these challenges by continuing to work closely with its G7, G8 and G20 partners, especially its neighbor, ally and number one trading partner the United States.

As part of this economic recovery strategy, Canada has made energy security and climate change top priorities. Prime Minister Stephen Harper and President Barack Obama recently discussed these key issues and vowed to tackle them together during their meeting in Ottawa on February 19, 2009.

President Obama and Prime Minister Harper Establish Clean Energy Dialogue

Noting the long and productive history of bilateral cooperation on continental environmental protection and energy trade and technology, the President and the Prime Minister agreed that environmental protection and the development of clean energy are inextricably linked and announced plans to work together to build a new energy economy as a key element of broader economic recovery and reinvestment efforts.

The two leaders also discussed ways Canada and the United States could encourage the development of clean energy technologies to reduce greenhouse gases and combat climate change. These talks resulted in the establishment of a senior-level Canada-U.S. Clean Energy Dialogue that will cooperate on several critical energy science and technology issues. Priority initiatives identified include: expand clean energy research and development; develop and deploy clean energy technology; and build a more efficient electricity grid based on clean and renewable generation. In the weeks following the meeting, Canadian and U.S. officials will meet and officially launch this new Canada-U.S. initiative. (See “Canada-U.S. Initiative for Tackling Climate Change & Energy Security” for more details).

Canada - Number One Supplier of Energy to the United States

For a deeper understanding of how Canada fits into the energy and environment equation for North America, it’s important to know the role that Canada plays today. First, Canada is the largest energy supplier to the United States including oil, natural gas, uranium and electricity. In fact, the United States imports more oil from Canada than it does from Saudi Arabia and Kuwait combined. And in 2007, Canada’s oil exports to the United States totaled more than $55 billion U.S., representing 2.4 million barrels per day.

Aside from its conventional oil and gas reserves, Canada’s oil sands in northern Alberta total an estimated 175 billion barrels of oil, which represents one of the largest sources of recoverable oil reserves in the world - second only to Saudi Arabia. Yet as technology and recovery techniques advance, the total oil reserves in Alberta’s oil sands are estimated to reach 1.7 trillion barrels, approximately four times the size of Saudi Arabia’s total reserves.

Roughly half of Canada’s crude oil exports to the United States are derived from Alberta’s oil sands, which provide a secure, dependable and long-term supply of oil for the North American market.

Canada’s Oil Sands and Sustainable Development Practices

Development of one of the world’s largest oil deposits brings both opportunities and issues. With such a huge energy resource come environmental challenges. To deal with these issues in a responsible and proactive manner, Canada is working with both provincial governments and the private sector to address how to secure the energy future in a way that is environmentally sound and sustainable. This involves balancing economic development with environmental and social responsibilities.

Production from Canadian oil sands is undertaken on a commercial basis in the context of transparent environmental regulatory and royalty regimes on greenhouse gas emissions, carbon dioxide capture and storage, water use and land reclamation, as well as water and natural gas use. U.S. companies are among the leading firms engaged in oil sands production, and project proposals to develop oil sands deposits are subject to extensive environmental and regulatory review. These permits are only granted once environmental issues and First Nations’ concerns have been addressed.

Canada’s Commitment to Environmental Stewardship

Canada understands that economic prosperity cannot be sustained without a healthy environment, just as environmental progress cannot be achieved without a healthy economy. It has committed to reducing Canada’s total greenhouse gas emissions by 20 percent by 2020 and by at least 50% by 2050. Meeting those goals will ensure that Canada’s ongoing actions remain comparable to those our partners in the United States, Europe and other industrialized countries undertake.

In support of this ambitious national goal, Canada will continue to provide support for biofuels, wind and other energy alternatives and will also bring in legislation to ban all bulk water transfers or exports from Canadian freshwater basins. Canada will work with all parties in Parliament to introduce sensible policies that can help consumers and improve our environmental well-being, such as increasing incentives for energy-saving home retrofits.

In addition, Canada will work with the provincial governments and our partners to develop and implement a North America-wide cap and trade system for greenhouse gases and an effective international protocol for the post-2012 period. Canada will set an objective that 90 percent of its electricity needs to be provided by non-emitting sources - such as hydro, nuclear, clean coal or wind power - by 2020.

In early 2009, Canada’s Minister of the Environment Jim Prentice gave an address to the Canadian Council of Chief Executives reaffirming Canada’s commitment to environmental stewardship. During the speech, Minister Prentice stated that the Government of Canada has resolved to make national environmental policies positive instruments of economic renewal and of national development during this period of economic uncertainty. He also said that Canada is committed to helping achieve an effective multilateral climate change agreement for the years ahead. Canada will also continue working with the United States to pursue coordinated approaches to energy and environmental challenges that both face, which was further discussed during Prime Minister Harper’s and President Obama’s meeting.

Achieving these objectives will not be easy. But progress is being made on three concurrent tracks, including the previously mentioned Climate Change Policy that Canada introduced in 2007. As stated, this strategy sets a target to reduce total greenhouse gas emissions in Canada in 2020 by 20 percent from a 2006 starting point, also known as the minus 20 by 2020 approach.

While ambitious, Canada believes these target reductions in greenhouse gases are achievable - a promise to the global community that we think Canada will be able to keep. It’s a commitment that requires a greater effort of Canadians than the one proposed by the E.U. 27.

Going forward, Canada is developing a regulatory regime with mandatory targets that will apply to major industrial emitters

President Barack Obama spoke with clarity and determination about his commitment to environmental issues. The United States is re-engaging on multilateral climate change negotiations, creating the opportunity for a North American regulatory regime and a level playing field.

The Canadian Government looks forward to working with the Obama administration on energy security and environmental sustainability.

We will seek to ensure our federal policies are coordinated. We want federal climate change regulation to work in tandem with tax, tariff and technology policies, as well as all other policies that promote timely domestic investment.

Canada is also working to coordinate and harmonize federal and provincial governments and policies.

Concurrent with such measured movement in Canada, we hope to make progress internationally. In 2009, we will work with other countries to negotiate an effective multilateral climate change accord for the years ahead. Key meetings will take place in Bonn in early April and June, as well as in Italy at the June G-8 meeting. Finally, all roads will lead to the Copenhagen Conference in December 2009.

It is Canada’s hope that future climate change agreements will be effective. Climate change is a global problem and requires a global solution, which means all major emitters, developed and developing nations, need to be part of any new accord

Industrialized nations, to be sure, must be prepared to lead the charge provided all major emitters agree to follow, because if industrialized countries exercise leadership without emerging economies countries coming on board, real progress will not be made.

Climate change is a global problem and requires a global solution, which means all major emitters, developed and developing nations, need to be part of any new accord.

Moving forward, we need to ensure comparable efforts from all industrialized nations. We also need to secure meaningful participation from all emerging economies led by the “Big Five” of China, India, Brazil, South Africa and our NAFTA partner Mexico. We need to focus as well on the development and deployment of transformative clean technology and a concerted effort to produce and transmit a greater percentage of cleaner base-load power.

These are principles that Canada believes could and should form the basis of one shared commitment between Canada and the United States similar to the collective commitment of the European Union. A bilateral agreement could have shared targets and shared timetables, a common carbon market and price standard, and mandates that are based on science and common sense. But we think that the two countries need to go further and talk in terms of concrete action plans. Actions that will reduce not just greenhouse gas emission levels but North America’s dependence on foreign oil, such as the soon-to-be-launched Clean Energy Dialogue, established by President Obama and Prime Minister Harper.

Forty years ago, imported oil accounted for about 10 percent of the American market with Americans producing approximately 90 percent of their own consumption. Today that 10/90 ratio has become 60/40. By 2020, it will likely be at 80/20, because at current rates of production and exponential increases in consumption—SUVs and plasma TVs for example—proven U.S. oil reserves, like those of Mexico, are on course to be depleted just one decade from now. This means that by 2020, the United States will be as dependent on imported oil as E.U. nations.

So while Canada already plays a major role in the North American energy equation, we have the capacity to play an even larger role in the North American energy solution. We believe that working together we can reconcile energy and the environment and still have a secure and environmentally sustainable energy future for both our nations.

It is increasingly important that Canada plays a larger role in the North American energy security solution, when one considers the implications of oil scarcity and the political situations in Russia, Venezuela or the troubled Middle East. Considering these factors, Canada’s status as the world’s most reliable supplier of energy becomes not just an economic opportunity but also an obligation to our international partners and perhaps the single best way that we can contribute much-needed stability in an uncertain world.

Opportunity and obligation are why Canada needs to work with the United States in developing cooperative bilateral action plans. These joint strategies could include bringing northern gas to southern customers; clean technology roadmaps that would optimize the considerable expertise of both countries in areas such as carbon capture and storage; plans to expand clean power generation and transmission capacity here in North America or to interconnect the eastern and western regional power grids in North America; and actions that will help North America and the world make the transition from a high carbon present to a low carbon future while avoiding a disruptive and dislocative period involving no carbon en route.

Finally, as Canada gains traction domestically on approaches to dealing with energy security and environmental stewardship, we are able to make a credible commitment to the international community that Canada will play a key role in the effort to stabilize greenhouse gas emissions. Canada will achieve this by also working with our neighbor and closest ally, the United States, in order to devise and execute a coordinated plan of action that will advance our environmental and our energy objectives and, at the same time, renew the North American economy.

Ambitious? Perhaps it is.

Achievable? We think so.

But of this I am certain: as North Americans, this is an agenda that is worth our very best efforts in the days ahead.

Dale Eisler (BA in Political Science at the University of Saskatchewan, Regina Campus; MA in Political Science at Vermont College, Union Institute & University).

Prior to joining the Canadian Federal Government, Mr. Eisler had an extensive career in journalism, including daily newspapers, weekly newsmagazines, syndicated opinion columns, radio and television. He was also a sessional lecturer in journalism at the University of Regina.

In addition, Mr. Eisler was involved, at an ownership level, in private business for 13 years.

In 1998, he was appointed Assistant Deputy Minister for Consultations and Communications with the Department of Finance in the Government of Canada. In 2004, he was appointed Assistant Secretary to Cabinet (Communications and Consultations) at the Privy Council Office, which was the most senior communications position in the Canadian Government.

In 2006, Mr. Eisler was the recipient of the Saskatchewan Commemorative Medal in recognition of his contributions to the province and society. He is the author of two books, most recently False Expectations: Politics and the Pursuit of the Saskatchewan Myth, published by the University of Regina in 2006. Recently, he was awarded the University of Regina’s distinguished alumni award for professional achievement.

Dale Eisler and his wife Louise took up residence in Denver in November 2007. They have one daughter and one granddaughter.