The U.S. risks losing its competitive edge in a global economy if it does not soon address the country's energy needs, climate change and foreign policy in a comprehensive way, the chief executive of Marathon Oil said Friday.
Clarence P. Cazalot Jr., president and CEO of Marathon Oil Corp., said that as worldwide demand for fossil fuels rises, the country's biggest challenge is dealing with these and other related issues underlying U.S. "energy security," or lack thereof.
Cazalot spoke on a panel about how the U.S. economy must adapt to remain competitive in the global economy.
Richard McCormack, vice chairman of Merrill Lynch & Co. LLC, said the U.S. needs to get its deficit under control, and start using and exporting more homemade products.
The budget deficit dropped to $162.8 billion in 2007, an $85 billion improvement over last year, and the Commerce Department recently reported that the trade deficit declined to $57.6 billion in August, down 2.4 percent from July.
James Hagedorn, chairman and CEO of lawn and garden product maker Scotts Miracle-Gro Co., agreed that debt was a major problem and said the "government needs to leave business alone to do its thing."
"There's no leadership in this town," Hagedorn said during the panel discussion sponsored by the Council of Competitiveness.
Annual, double-digit increases in health care costs also are inhibiting U.S. competitiveness.
"It's killing us," Hagedorn said, adding that the Marysville, Ohio-based company does not allow its employees to smoke and that most workers quit the habit to keep their jobs despite management's initial concerns of filling entry-level lawn technician and other positions.
The panelists also agreed that energy security should be a top priority. Merrill Lynch's McCormack said the U.S. should follow France's lead and increase its use of nuclear power as a way to address environmental concerns and reduce dependence on foreign oil.
NRG Energy Inc. recently submitted the first complete application for a new nuclear reactor in the U.S. in nearly 30 years, and the Energy Department earlier this month said it will guarantee loans for up to 80 percent of the total construction cost of new reactors.
On the issue of how to pay for environmental policies designed to reduce carbon emissions, Cazalot prefers a direct tax on the primary gas blamed for climate change, as opposed to cap-and-trade programs that allow a company with reduced emissions to sell a credit to another business that needs to exceed the emissions limit to operate. But he said Congress appears headed toward a cap-and-trade policy.
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