Today President Obama urged Congress to establish an “energy security trust” which would take a portion of federal revenues from oil and gas production on federal lands and earmark them for research in advanced vehicle technology which would include cars fueled by electricity, bio cells, natural gas and biofuels.  The goal would be to earmark $2 billion over the next 10 years for research in these areas. Initially the President spoke about his plan during the State of the Union speech in February.

The President visited the Argonne National Laboratory in Chicago for his speech today. This federal lab has been working on advanced vehicle technology since the 1990s with a focus on advanced car batteries. During his visit he again spoke about an “energy security trust.” While much of what he said was positive and good we can’t afford to focus on just a few fuels. We need to continue basic research on all types of fuels. Advance vehicle technology research is critical if we are to continue to increase the efficiency of our cars and trucks. The research of today will reduce vehicle fuel consumption and the impact of vehicles on our environment in the future.

As part of his plan the President said he is looking for a pilot program to remove the “bottle necks” from the permitting process in North Dakota’s Bakken Shale Formation. This is great news,  the White House finally understands that the permitting process is taking far too much time and is the “bottle neck” in the production process.  This should not be a surprise. The energy sector has been talking about these permitting bottle necks for years! We hope the Administration and the President understand that it has been the federal government that has created barriers to production and slowed our exploration efforts.

Second, I found it interesting that the President would pick the Bakkens for a pilot project given that most of the production in the Bakken Shale Formation is taking place on private lands where the federal permitting process is not an issue. The fact is that for the last 6 years most all of the new production has taken place on private lands. Most of the shale gas development is on private lands. If we had to rely solely on federal lands for oil and gas development we would still be building import facilities for LNG! (continue reading…)

When the President says that the private sector is doing fine, as he did today during a press conference from the White House, manufacturers across the country must respectfully disagree.  We remind the President that it is 20 percent more expensive to do business in the United States when compared to our largest trading partners.

We remind the President that we have the highest corporate tax rate in the world.  We remind the President that the United States is party to only one trade agreement when currently there are over 200 such agreements being negotiated in the global marketplace. We remind the President that he rejected the Keystone XL pipeline that would provide a consistent and affordable energy source and create 138,000 jobs.  And we remind the President that our country has unnecessary regulation after regulation that drives up the cost of business in a sector that is poised for growth.

Because manufacturers – the real people in the real world – understand that things in our country aren’t necessarily as “fine” as the President might believe, nearly 400 of them spent the last two days in Washington, D.C., meeting with policymakers for the NAM’s annual Manufacturing Summit.

These men and women traveled to Capitol Hill from every corner of the country to share their stories with our elected leaders. They discussed the need for comprehensive business tax reform that will lower tax rates and provide certainty for all businesses, for an “all of the above” energy strategy that stops placing our resources off-limits, and for real support of manufacturers’ efforts to create jobs and address the challenges they face finding workers with the skills required in modern manufacturing.

It’s time for Washington to listen to manufacturers because they have the know-how and ability to lead our economic recovery.

Jay Timmons is president and CEO, National Association of Manufacturers.  

Today Vice President Joe Biden was in Grand Rapids, MI talking about manufacturing and following up on the proposals laid out last week by President Obama in the State of the Union.

We are happy to see the President and Vice President are continuing to talk about manufacturing and realize how important it is to the economy and job creation. However, manufacturers need the right policies to grow and create jobs.

Manufacturers are looking for the “All-of-the-Above” energy policy that includes the Keystone XL pipeline. If they Administration wants to create manufacturing jobs, the perfect project was right before them. Keystone XL will create 20,000 construction and manufacturing jobs and more than 118,000 spin-off jobs.

As the discussion continues about manufacturing and how to create jobs we hope that both Congress and the Administration will move forward with policies to let manufacturers lead the economic recovery and create quality, high-paying jobs.

Today we heard from President Obama about his plan to reorganize several federal agencies – many of which are critical to manufacturers and their ability to create and retain jobs.

Changes would include combining the Small Business Administration, the Office of the U.S. Trade Representative, the Export-Import Bank, the Overseas Private Investment Corporation, and the U.S. Trade and Development Agency into a single department in an effort to improve government efficiency and to help promote business. The key question in reviewing this proposal is will it help manufacturers compete, export, invest and create jobs?

Any changes that are considered must focus on improving intellectual property protection, opening markets for exports, improving market access, and more. Additionally, while manufacturers have done well in leaning their processes to improve their competitiveness and would vigorously support the federal government doing the same in this difficult debt and deficit environment, the agencies affected must continue to have the necessary resources to meet their missions.

If the streamlining and efficiency undertaken in this proposed combination of agencies will mean that manufacturers will have less intellectual property protection, for example, it would be a devastating mistake. If, on the other hand, this leaning process will mean doing more with less, it would be a great step forward.

As policymakers respond to the President’s proposals today, we are hopeful that the discussion centers on the key question for manufacturers – will they be better able to compete, export, invest and create jobs as a result? With a 20 percent cost disadvantage already, manufacturers will deeply care about the impact these proposals will have on their ability to compete.

Aric Newhouse is senior vice president for policy and government relations, National Association of Manufacturers.

New details were released by TransCanada today on the potential job creation that awaits once the Keystone XL pipeline is approved. The data shows that the pipeline will create 20,000 jobs – 7,000 specific to manufacturing.

December’s employment report showed a lower unemployment rate of 8.5 percent. While this is good news, it does not restore the certainty that Americans need. The Keystone XL pipeline is the key to a national energy plan that strives for affordable, reliable and secure energy.

TransCanada boasts the residual effect of the pipeline.

“Hundreds of jobs will be created through requirements for fuel, coating materials, welding supplies, concrete materials, geo-textile materials, pipeline weights, native seed materials for reclamation, cathodic protection materials, crushed rock, sediment barrier materials, valve and pigging assemblies, field trailer manufacturing, construction mats, power facility materials, aggregate manufacturing, road construction materials, water and waste facility manufacturing, fencing materials, communication infrastructure, bridge construction materials and many others.”

The ball is now in President Obama’s court. Congress gave President Obama 60 days to deny that the Keystone XL pipeline is in our nation’s best interest. Manufacturers, who are excited about this opportunity to invest and expand, remain waiting on the sidelines.

President Obama joined manufacturers this afternoon at Alcoa Davenport Works in Bettendorf, Iowa. NAM Board Chair and Vermeer Corporation President CEO Mary Andringa greeted the President before his tour of the facility and attended his speech.

Los Angeles Times, “Obama highlights manufacturing revival, jobs in Iowa”
BusinessWeek, “Obama Turns to Alcoa as Backdrop for Manufacturing Message”

The President discussed several of the initiatives he announced earlier this month, including his endorsement of the Manufacturing Institute’s Skills Certification System and the formation of the Advanced Manufacturing Partnership of which Alcoa is a partner. 

We are encouraged to hear President Obama continue to discuss the importance of manufacturing to the economy and to job growth. Yet manufacturers continue to face burdensome regulations, higher taxes and energy costs and increased global competition.

If manufacturers are going to continue to lead our economic recovery and create quality, high-paying jobs we need policies that give business owners certainty and the tools to grow. The NAM has a blueprint of policies that will help us remain competitive. Our Manufacturing Strategy for Jobs and a Competitive America has three very simple goals:

• To make the U.S. the best country in the world to headquarter a company and for direct foreign investment.
• To make the U.S. the best country to innovate and perform the bulk of a company’s research and development.
• To make the U.S. a great place to manufacture and serve as an export platform for the world.

It is my hope that we can continue to work with President Obama, his Administration and Congress on advancing policies that keep the United States the number one manufacturing economy in the world.

Jay Timmons is president and CEO of the National Association of Manufacturers.

This afternoon President Obama will be touring and speaking at Alcoa Davenport Works in Bettendorf, Iowa. The President is expected to continue to speak about the importance of manufacturing to our nation’s economy.

Politico reports on today’s event:

The all-important political state of Iowa will host President Obama on Tuesday as he goes to Bettendorf to tour a factory and talk about manufacturing and the economy. “Manufacturing serves as the backbone of communities across our country and the continued revitalization of the manufacturing sector is critical to America’s success as we compete in a 21st century global economy,” the White House noted in guidance to reporters.

This morning at 11:30 President Obama will speak an event at Northern Virginia Community College in Alexandria to announce an industry led initiative to improve partnerships with community colleges to help develop a better skilled workforce for today’s manufacturing jobs. The President will highlight the Manufacturing Institute’s NAM-Endorsed Skills Certification System as a solution to meeting the goal of credentialing 500,000 community college students in the next five years.

The event will be streamed live online at nam.org.

Read the statement from NAM President and CEO Jay Timmons and from Manufacturing Institute President Emily DeRocco.

Chevron’s Dilemma: Creating an Untenable Situation for a Multinational – Winter 2009

Chevron held its annual stockholders meeting in San Ramon, Calif., today, and environmental activists again demanded that the company settle a lawsuit brought against it in Ecuador. But new documents show these demands, like most before them, to be serving not justice but instead the pecuniary interests of a small group of contingency-fee lawyers and their allies.

The U.S. trial lawyers suing Chevron over alleged environmental damage in Ecuador have worked from a sophisticated political and PR plan that has sought to use Congress, state governments and major media and even directly influence President Obama to force the oil company into a settlement.

Documents obtained by Chevron in court proceedings* reveal the true nature of the campaign against the company: It’s not about using the law to find the truth, but rather applying the maximum amount of political pressure to extort billions of dollars from the U.S. corporate target. From those billions, the American contingency-fee attorneys and their operatives would take a huge share for their own enrichment.

Effectively using the discovery process to delve deep into the scheme, Chevron has uncovered sufficient proof of wrongdoing to bring a federal racketeering suit against the key actors behind the shakedown lawsuit.

Evidence of fraud at the heart of the anti-Chevron campaign has led a U.S. federal judge to block any effort by the “Lago Agrio” plaintiffs and their U.S. lawyers to collect on an $18 billion judgment handed down by an Ecuadorian court against the San Ramon, California company.

Chevron is the target because the company acquired Texaco in 2001; Texaco had operated in Ecuador’s Amazon in a consortium with the state-owned oil company, Petroecuador, from the 1960s until 1992. Texaco remediated any environmental damage before it left Ecuador, while Petroecuador continued operations (and pollution).

The campaign against Chevron is multifaceted and organized. We have referred to it as the “combine,” an alliance of trial lawyers, politicians, activists and supportive media. But the lawyers themselves depict the campaign as an encirclement, orchestrating numerous actors to pressure the company toward a settlement.

Above right is a chart created in January 2009 by Andrew Woods, an attorney who works with the Amazon Defense Coalition, the PR front group for New York trial lawyer Steven Donziger, his team of contingency-fee attorneys and the Ecuadorian plaintiffs suing Chevron. The document’s title is “Chevron’s Dilemma: Creating an Untenable Situation for a Multinational – Winter 2009.” (Click for a larger picture.)

Chevron submitted the chart on April 26 to the U.S. District Court for the Southern District of New York, one of a batch of 29 new submissions to support the company’s motion to hold Donziger in contempt for failing to disclose tens of thousands of documents he was under court order to make available to Chevron.

Each of the circles represents one of pressure points the lawyers are bringing to bear as they attempt to create “an untenable situation” for Chevron.

There’s the circle for “Crude,” the documentary-style film that director Joe Berlinger originally claimed was an independent and balanced exploration of the effects of oil development on Amazonian Indians. But New York trial lawyer Steven Donziger originally sold him on the project and subsequently Berlinger has conceded he let the lawyers make key editorial decisions to avoid undermining their storyline that Chevron is evil. In the circle you can see how the legal team planned to use the film:

“Crude” Film

• To be shown in local communities of the [Chevron] Board of Directors; Can generate media attention in home communities of BOD members.
• To be shown on Capitol Hill in coordination with Rep. McGovern
• Potential screening in White House.

Rep. McGovern is Jim McGovern (D-MA), one of the lawyers’ key allies on Capitol Hill. He spoke at a showing of the film in downtown Washington in October 2009, recalling a trip he had made to Ecuador — here’s a photo of the Congressman with Donziger in the jungle — and describing his efforts to bring President Obama into the anti-Chevron fight. “Ramp up the pressure!” McGovern urged the crowd at the Landmark E-Street Theatre. (See earlier Shopfloor posts on the movie.)

President Obama gets his own circle [below right], denoted, “Ongoing pressure of new administration publicly unfriendly to big oil companies.” Not just unfriendly to big oil companies, the President was a Harvard Law School classmate and former basketball playing buddy of Steven Donziger. How about that for an avenue of influence?

The trial lawyers knew they had an ally. As a Senator, Obama joined Sen. Patrick Leahy in writing a letter in 2006 to then-U.S. Trade Representative Rob Portman, highlighting the cause of the Amazonian Indians against Chevron. The Senators rejected any efforts to tie U.S. trade preferences for Ecuador to the country’s treatment of Chevron in the litigation, telling Portman: “While we are not prejudging the outcome of the case, we do believe the 30,000 indigenous residents of Ecuador deserve their day in court.”

That being the corrupted and politicized courts of Ecuador, which in February produced a $18 billion judgment against the company.

While the White House has stayed out of the issue publicly, the Obama Administration continued to support trade preferences for Ecuador, despite the continued assault on democratic institutions and U.S. interests by the leftist government of Rafael Correa. (continue reading…)

Your correspondent, a speechwriter in various stages of his career, was puzzled by the President’s closing remarks in his speech at the Chamber of Commerce this morning:

Yes, we’ll have some disagreements. Yes, we’ll see things differently at times. But we’re all Americans, and that spirit of patriotism and that sense of mutual regard and common obligation, that has carried through far harder times than the ones we’ve just been through. Now I’m reminded toward the end of the 1930s, amidst the Depression, the looming prospect of war, FDR, President Roosevelt, realized he would need to form a new partnership with business, if we were going to become what he would later call the Arsenal of Democracy. As you can imagine, the relationship between the President and business leaders during the course of the Depression had been rocky at times, had grown somewhat fractured by the New Deal, so Roosevelt reached out to businesses, and business leaders answered the call to serve their country. After years of working at cross-purposes, the result was one of the most productive collaborations between public and private sectors in American history. Some, like the head of GM hadn’t previously known the President and if anything had seen him as an adversary. But he gathered his family, and he explained that he was going to head up what would become the War Production Board. And he said to his family, “This country has been good to me, and I want to pay it back.” I want to pay it back.

And in the years that followed, automobile factories converted to making planes and tanks, and corset factories made grenade belts, a toy company made compasses, a pinball machine maker turned out shells. 1941 would see the greatest expansion of manufacturing in the history of America, and not only did this help us win the war, it led to millions of new jobs and helped produce the great American middle class. So we have faced hard times before. We have faced moments of tumult and moments of change, and we know what to do. We know how to succeed. We are Americans and as we have done throughout history, I have every confidence that once again we will rise to this occasion, that we can come together, we can adapt, we can thrive in this changing economy. And need to look no further than the innovative companies in this room. We can harness your potential and the potential of your people across this country, there’s no stopping us.

This is confusing. Is President Obama supposed to be FDR in this analogy? If so, is he hinting he’s abandoning the modern-day equivalents of the National Recovery Administration and Wagner Act unionization for a more cooperative approach toward business akin to WWII industrial policy?

If the President is merely evoking a great national challenge, what challenge is that? President Carter at least explicitly called the energy crisis the moral equivalent of war. Is the President now telling us recovery from the recession is the moral equivalent of war? 

If the message was, “We’re all in this together,” than the President reached too far for the analogy. The moral equivalent of war is war. The economic challenges we face are many and serious, but they are not the existential threat of WWII.

UPDATE (1:30 p.m.): The War Production Board is NOT a good analogy to use when discussing government-business cooperation. From the Oklahoma Historical Society:

During World War II, the War Production Board (WPB) was granted supreme authority to direct procurement of materials and industrial production programs. Established by Executive Order 9024 on January 16, 1942, the WPB replaced the Supply Priorities and Allocation Board as well as the Office of Production Management. The national WPB constituted the chair (Donald M. Nelson, 1942 44; Julius A. Krug, 1944 45) appointed by the president, the secretaries of war, navy, and agriculture, the federal loan administrator, lieutenant general in charge of war department production, administrator of the office of price administration, chair of the board of economic warfare, and special assistant to the president who supervised the defense aid program. The board created advisory, policy-making, and progress-reporting divisions.