AJOC: Tell me about your presentation to the Resource Development Council today:

Harbert: We undertook this initiative to get out and talk to businesses across 30 states by the end of this year — business leaders and community leaders and industry leaders — to raise the level of awareness of our energy challenges and energy realities and hopefully prompt them to be more participatory in the national debate.

Karen Harbert is the president and CEO of the 21st Century Energy Institute of the U.S. Chamber of Commerce, which estimates there are at least 12 energy projects in Alaska being held up by "green tape" that could represent $51 billion in investment and 36,200 jobs. Photo/Andrew Jensen/AJOC

We think it's incredibly important for the business community, which has the biggest stake in the outcome, to be part of the discussion so we are very transparent about the costs, the outcomes, the results, the consequences.

We have tried to advance the conversation by putting out a fairly lengthy and analytically based platform that we think is the right platform based on these 13 principles. We made 90 recommendations in all those areas to Congress, to the president, that say here's how we think we can improve our energy security, improve our economy and to improve the environment. We need to be doing all of those in concert.

Right now the current political discussion is an "either-or" conversation. You're either for the environment or you're for energy. That's not realistic. It has to be an "and" conversation ... Let's start getting some of those things done that are practical, common sense, that people agree on. Let's not have a dash to rash decision-making because of an oil spill or a coal mine explosion. The natural human and political reaction to a disaster is to put forward some big proposal to fix it. In the case of the BP oil spill, let's look at regulatory safety and oversight and improve it. Industry will be held accountable. But let's not add in 17 other things and wrap it in the guise of a spill bill.

AJOC: Or shut the industry down?

Harbert: The moratorium is that we have to demonstrate there is no risk out there. The first thing the (U.S.) Department of Interior was tasked to do was to go out and recertify each one of those rigs, which they did. And hanging in their window is a recertification that "We are considered safe by the government." There was a rally today in Lafayette, Louisiana. Industries across the spectrum sending the message to Washington that the oil spill is an environmental catastrophe; this moratorium is an economic catastrophe bigger in scale than the oil spill.

It's affecting everybody. The restaurant workers that service these rigs, the caterers, the waste disposal, the laundry, the welders — and these are smaller businesses. They can't afford to hang on for six months. They're people who are saying they are going to shut down, I can't afford to keep payroll.

AJOC: I believe one in three jobs in Louisiana are tied to the industry.

Harbert: Moody's Analytics said if the moratorium holds through November, 100,000 jobs will be affected in Louisiana. That is not an economic recovery plan ... Are we prepared to increase our imports? We're trying to decrease our imports. We have to be realistic about this and make some hard choices. You're entitled to your own opinion, but not your own set of facts.

Here's the facts: if we decide we want to import more oil, keep the moratorium on. You can make that part of your policy as far as your agenda. But know what the consequences are. Know what the costs are and the economic costs to the region and the ripple effect that will spread through the country. Let's make the choices as well informed as we possibly can rather than based on rhetoric and gut instinct. These types of issues are too important ... Let's de-emotionalize this. Is that a word?

AJOC: Like "refudiate"?

Harbert: (Laughs) Yeah, let's make it more dispassionate so we can make sound decisions that will hopefully materially improve the policy environment ... We're heading up to rewriting the tax code and that makes the business community and especially the energy community, very, very, very nervous. They can't close the gap themselves alone, but they can see that their number is up.

I know it feels good to go after these oil majors. You can campaign stump speech on that. But let's avoid these "feel good" things and let's do some rational policy-making. That's what we're trying to get across in Washington and in a very partisan environment with a whole lot of constituencies calling for climate change legislation, spill legislation.

Meanwhile we have a very ambitious EPA (Environmental Protection Agency) that doesn't have to respond to Congress or elections coming and going.

We're making it harder to do business, more expensive to do business and now we're contemplating making energy more expensive. It's a very disturbing trend.

AJOC: Cap and trade looked dead for all intents and purposes in the Senate. How surprised are you that they are going to try and put this forward two months before the election? And what have you seen of the Kerry-Lieberman legislation? (Subsequent to this interview, Senate Majority Leader Harry Reid announced that climate legislation would not be introduced until fall at the earliest)

Harbert: Sen. Reid has some tough choices. He's got 12 Democrats who just sent him a letter saying if you don't put a price on carbon, don't count on our vote. He got another letter from 19 Democrats saying if you put a price on carbon, don't count on our vote. He's got his majority whip Dick Durbin saying we're not going to put it forward before the (August) recess, and Reid saying yes we are. You're in this environment where nobody knows who's on first.

Setting aside the theatrics, you have to first craft a spill bill that can attract 60 votes. That's where you start ... Then the question is: can I put a cap and trade system on there, maybe even utility-only, and still get 60 votes? There was a shred of possibility to that until yesterday when the utilities came out and said, "No, it's too expensive. We're going to raise our prices." That's bad.

AJOC: Well, that's not even really news. (President Barack) Obama said to the San Francisco Chronicle during the election that electricity rates would "necessarily skyrocket" under his plan and if you wanted to build a coal plant you would go bankrupt.

Harbert: Yes, he said that. But now, with the recession, if you raise prices on the consumer you can imagine the ads running in the November election saying, "You voted for that bill." It's a far cry from certain that (cap and trade) will be in there.

AJOC: Do you put much stock in those lame-duck session conspiracy theories (that Congress will pass unpopular legislation after the elections)?

Harbert: Unfortunately, yes. Who knows what is going to happen in November, but clearly there is going to be some reorganization of power in Washington. To what extent, who knows? In any case, if the Democrat majority is under threat or even if it changes, lame duck session becomes hugely important to them and hugely problematic to the business community. There will be a huge desire to make some decisions on taxes, corporate taxes, emissions, on all kinds of things that can be done in six weeks. We're doing it at a time when we should be finalizing discussion on whether we're extending the Bush tax cuts.

That's the one thing that sort of keeps me up at night. And it will happen at a time when the American public will sort of have their attention elsewhere and businesses are hoping they're spending some money. They won't be worried about lobbying, but worried about getting people into their stores. That is really problematic and something we are on high alert for. We've canceled everyone's holiday plans for December. We really do need to be vigilant. Anything that passes with a short amount of debate time doesn't allow legislators or any organization including ours to do proper analysis.

That is not the way to legislate for an economic recovery.

Next week: Part two of our interview with Karen Harbert.