Executive Committee Member Delivers Keynote at Americas Competitiveness Forum

Ralph Peterson, an executive committee member of the Council on Competitiveness and chairman and CEO of CH2M Hill, delivered the keynote address at the Americas Competitiveness Forum in Atlanta, Ga., August 19. Peterson’s speech focused on the role of infrastructure as a critical enabler of competitiveness.

Thank you, Antonio, and good afternoon ladies and gentlemen. I am very pleased to have the opportunity to participate in this important Forum, which has been extremely informative and inspirational. I congratulate Secretary Gutierrez and all of the Latin America leaders for their vision and leadership in convening this event, which is so commendably devoted to promoting prosperity and economic opportunity in the Americas.

The focus of my remarks today will be on the role of infrastructure as a critical enabler of competitiveness…indeed infrastructure is the foundation on which competitiveness is built.

I speak on these issues from my vantage point as chief executive of CH2M HILL, a global engineering and construction company whose 24,000 employees provide engineering, procurement, construction, program management, and operation projects and services to a wide range of public and private sector clients around the world.

We work in the areas of transportation, water, energy and power, the environment, and a broad array of industrial facilities such as chemicals, consumer projects, metals, pharmaceuticals, and both high-tech and traditional manufacturing. Our revenue in 2008 will be about $6 billion U.S. dollars. In the Americas, we have offices in major cities throughout the United States and Canada; our significant Latin America operations include Mexico City, Panama, Trinidad, Sao Paolo and Buenos Aires. We have about two dozen major offices outside the Americas throughout Europe the Middle East, Asia and Australia/NZ.

Our global projects include many which are fairly familiar:

• The Panama Canal expansion and the new zero-carbon, zero waste city near Abu Dhabi…Masdar…I will speak more about the Panama Canal and Masdar in a moment;
• We are also program managers for the construction of the facilities for the 2012 London Olympic/Paralympics games, a remarkable example of urban renewal with a strong sustainability focus;
• We also engineered Singapore’s water and wastewater systems, to create an entirely new and sustainable water resource for that nation-city by applying very sophisticated technology to treat wastewater to drinking-quality standards for reuse;
• We are engineering oil recovery systems in Canada’s oil-sands and doing energy pipelines and facilities in the Arctic North Slope and Sakhalin Island, as well as a host of oil, gas, and refinery projects in the United States, Middle East and Latin America;
• And a bunch of other really cool projects like the Golden Ears bridge over the Fraser River in British Columbia, the Sri Lanka tsunami reconstruction program, and a host of manufacturing, energy and public facilities throughout Latin America.

I would like to preface my remarks by sharing some observations about competitiveness…which is, of course, the focus and purpose of our Forum.

In the course of my 18 years as CEO working around the world, I have come to believe that there are two very different kinds of competitiveness:

• There is constructive competitiveness;
• But there is also destructive competitiveness.

Constructive competitiveness is characterized by competition that harnesses the tremendous power of human ingenuity and creativity to create new and innovative solutions, and new ways of providing goods and services. It is competition that is focused on adding or creating value, not just rearranging or redistributing the status-quo. It is competition that raises that level of play, which over the long run creates a lot of winners throughout global society.

In destructive competitiveness, competition is viewed as a zero-sum game in which a “win” by one segment of global society (a company or a country or a region) must somehow be a “loss” for another segment. Competition that is focused not on making the global economic “pie” bigger, but rather it involves quarreling over who gets the smaller pieces. It is a destructive competitiveness model that breeds the dangerous protectionism and economic isolationism about which Secretary Gutierrez warned us in his opening remarks.

Make no mistake: Both kinds of competitiveness exist in our world today, and both have their proponents and advocates.

We can all be proud that this America’s competitiveness Forum is all about constructive competitiveness. We have heard that from virtually every speaker: from Secretary Gutierrez when he spoke about learning from one another and not falling into the trap of thinking about economic growth as a zero-sum game. From Congressman Meeks in his remarks about economic growth that “raises all boats”; in the remarks of Presidents Uribe, Saca and Colom, and in Ray Anderson’s compelling remarks about using new thinking and human ingenuity to craft a more sustainable future.

Surely Ray Anderson’s speech drives home the point that the twin pressures of global population and economic growth have brought us to the realization that we are pressing the limits of our planet’s capacity to supply the energy, natural resources and environmental carrying capacity to support the continued economic growth we need over the coming decades; economic growth which can improve the lives and prospects for all the world’s people. And that means the world desperately needs a recommitment to the kind of constructive competitiveness we are pursuing at this Forum. Competitiveness that brings out the power of human ingenuity and creativity…because that creativity is our truly infinitely renewable resource.

Infrastructure is one of the most important prerequisites for economic growth; and infrastructure is something that directly affects people’s lives and prospects. It is in the area of infrastructure where human ingenuity and creativity can create a non-zero sum game, as we—to use Secretary Gutierrez words—can learn from one another.

I would like to share a couple of examples of world-class infrastructure projects in which my company has been privileged to participate. These are transformational projects that reflect the best of constructive competitiveness.

The Panama Canal expansion is a $5.3 billion project that will have a major impact on trade logistics throughout the hemisphere and around the world as it allows Post Panamax vessels to traverse the canal. The project involves several major elements:

• Deepening and widening the Atlantic Channel entrance;
• A new Atlantic approach channel;
• A new set of locks on the Atlantic side, to accommodate the much larger Post Panama shipping vessels, with new water-saving basins that will allow reuse of the water required for lock operations;
• Raising the level of Lake Gatun which supplies water for the lock operations, as well as a variety of other domestic and industrial uses;
• Widening and deepening the navigation channel of Lake Gatun and the upland waterway;
• A new approach channel for the Pacific locks;
• A new set of locks on the Pacific side, sized to handle Post-Panamax vessels and also equipped with water saving basins for fresh water reuse;
• And deepening and widening the Pacific entrance channel.

The Panama Canal Authority (ACP) has done a superb job of incorporating environmental and sustainability features in this major infrastructure project. The Authority conducted 23 significant environmental and baseline studies. The final deign was chosen from among many alternatives studied, based predominantly on environmental and sustainability considerations.

Extensive environmental mitigation was built into the design. A total of 27 significant measures were undertaken including reforestation, dredge spoil utilization raw material supplies and most critically…water resource management. Water availability for lock operations was a very critical factor. To insure the availability of sufficient water for operations of the new and existing locks while protecting the water supply for agricultural, municipal and industrial uses, required the addition of new water saving basins and piping to allow reuse of the water required for lock operations. The result is a much more sustainable and water-efficient system (although it required considerable additional investment).

The existing hydropower facilities associated with the dam and lake system make the Panama Canal Authority energy self-sufficient and a net exporter of hydropower to the grid.

As Secretary Gutierrez noted in his remarks yesterday, the Panama Canal expansion will have far-reaching effects on ports and shipping systems throughout the hemisphere, for years to come.

Another fascinating project I would like to share with you is a revolutionary new city being built near Abu Dhabi in the Emirates. The city Masdar (which means “The Source” in Arabic) will be built over the next seven years at a cost of some $22 billion USD. It will have 50,000 residents and 40,000 commuters. It is designed to be model of sustainability, with zero carbon and zero waste, and to be a technological center for sustainable energy and building systems.

A city of Masdar’s size would have a carbon footprint of about 1.1million metric tons of CO2. Through a combination of energy efficient building design, renewable energy generation, waste recycling, zero surface transportation, and a modest amount of carbon offsets/sequestration, Masdar’s carbon footprint is designed to be zero.

Waste recycling, composting and combustion systems are included, which are designed to achieve the goal of zero waste.

An extensive water recycling and reuse system involving desalination, grey water irrigation reuse, and recycling treated sewage for saline aquifer recharge will achieve 80 percent use of recycled water, and a 75 percent reduction in desalination requirements.

The transportation systems will involve no surface transportation and no fossil fuel use for autos or trucks. The system will utilize a combination of Personal Rapid Transit an Material Rapid Transit located underground.

Masdar is certainly a bold concept. I am reminded of Ray Anderson’s statement yesterday in which one of his competitors called him a dreamer. The developers of Masdar certainly have a bold dream. Masdar is an example of what can happen when vision is combined with the resources to carry it out. This is an exciting project that will be a pioneering effort in sustainable infrastructure. This is the kind of constructive competitiveness that can shape the future of renewable energy and urban development.

The initial phase, a joint research center with MIT, is an example of the global collaboration that is going on at Masdar. Masdar is actively seeking partners and suppliers, and we have provided information on specific opportunities for collaboration and engagement in the accompanying slide. Paper copies are provided in the back of the room.

We live in a world that has a lot of anxiety and concerns:

• Worries about energy security, supply availability, price spikes and environmental concerns about climate change;
• Food, raw material and natural resource availability and cost;
• Anxiety about jobs, and how they now move around the globalized world in ways that are scary to the ordinary people who are affected.

The world is now a dense web of interconnected finance and trade relationships, with interconnected markets and supply chains that no longer allow sovereign nations or companies to control their path forward independently of the others in that web.
These concerns can easily lead people in the direction of destructive competitiveness—the kind of zero-sum-game thinking that breeds economic isolationism and protectionism. There has been a lot of protectionist rhetoric in the U.S. election dialogue this year; talk about retreating from trade liberalization initiatives and even undoing existing trade agreements. I hope this is just election-year talk and that the wisdom and benefits of trade liberalization will eventually prevail. I am reminded of Winston Churchill’s comment about Americans in the run-up to World War II. Churchill said, “Americans can always be counted upon to do the right thing…but only after they have exhausted all the alternatives.” I hope we quickly exhaust the alternatives.

I will close by stating most emphatically that I am optimistic that human ingenuity and creativity will prevail, as long as we are willing to learn from one another, and remember that we are all in this together. Colin Powell once observed that perpetual optimism a force multiplier, and I believe that most deeply. This Forum is an important step in putting that optimism to work, to build a better world—together.

Thank you for your kind attention.