diesel fuel in some of the larger vehicles. that's encouraging stuff. we've seen it across the country, windmill farms deployed, producing a lot of electricity. senator snowe and i have been working on an idea to try to incentivize windmill farms off the east coast and use a lot of that for the hybrid vehicles that are going to be built in the decade to come. one of our ideas, to say on the investment tax credit, rather than just providing a production tax credit which we don't to incentivize the building of windmills on shore. what we suggest is a different type of investment tax credit which would be good for a limited period of time, a limited offer. and it would basically say the first 3,000 mega watts of generating capacity developed off of our coast would be that

they -- however many windmill farms are developed. first one, second, third, up to 3,000 mega watts, that's it. the tax credit goes away. but the idea is to get it started, show that we could do this successfully. if i could ask dr. jurgensen or congressman sharp to respond to that idea. if we just rely on production tax credit, we're not going to bill windmill farms in the u.s. anytime soon. as i said, this is a limited time offer, what do you think? dr. jurgensen, congressman sharp? >> my only question, senator, is how you're going to pay for this, that's all. i think we have to recognize the fact that the budgetary climate like the world market has undergone a major change, and we need to take that into account

when we're discussing tax policy and when we're formulating tax policy and when we're enacting tax policy. and so i think we need to ask ourselves, is the market doing the job? is it sufficient to bring forward these resources that you're talking? and i think the fact that it is bringing forward enormous resources in oil and natural gas and in renewables. there are many applications of renewables, mainly wind energy which you and the senator from maine have been focusing on which are cost effective independently of any sort of tax breaks and higher oil prices will make them cost effective for a very, very long period of time. >> congressman sharp. >> senator, i'm a great admirer of all your considerable work on all of these issues. i'm not really prepared to say on what you're asking because we know that it's a lot higher cost to do offshore than it is to do

onshore. and i think there's a serious cost effectiveness question that i'm sure you're looking at as to just how far we ought to go. of course, you've taken into account that you assume this is an infinite industry. but i'm not sure how much we really have to learn about offshore since so much of it is going on in europe that suspect the question we need to ask from time to time things that we see happening in china, happening in denmark, happening in great britain, these are not often good for us. we have to be competitive to it. we can let them buy up the technologies and then we buy up the technologies later. i'm not quick to endorse everything that is is done in america, as much as i love this country. >> i would add with respect to nuclear power, one of the reasons we're building new nuclear power plants, as you know, is because we've had

financial assistance and encouragement through our -- through the federal government. let me go back to something you said, dr. jorgenson, if i could. i think you said we've seen a sea change in the price of oil. i think we produce about 2% of the world's oil, or oil reserves. and we use about 20% on a daily basis of the oil that's consumed in the world. as you look forward, look ahead to china coming online, we bought, you know, 11 million, 12 million cars this year, what you expected to sell, maybe 14 million. maybe next year, 16 million. china, i think last year, they caught up with us. we've got a whole lot more people, what are the implications for that consumption? what are the implications for price of oil across the world? >> the point is that china and india and many countries have

finally discovered the key to economic growth are going to be the source of growth of demand for a very, very long time to come. that is what is behind the sea change that has occurred in world petroleum markets and we need to respond to that. and we will respond to it. we'll respond to it by having more energy-firefficient vehicl we'll respond to it by using hybrid vehicles where appropriate. and as i said to senator snowe, energy conservation. that's what the price is going to do. it's also going to push us very strongly in domestic fuel and natural gas available now in large quantities due to the very highly skilled work that has been done by mr. hamm and his colleagues in the oil and gas industry. >> the u.s. auto industry and others who sell cars trucks and

advance here look at the rampup in the fuel efficiency standards in the next 10, 15 years, and i think they have a concern that since we don't have a very high tax on, at least federal tax, or state taxes, really, on motor fuels, they're concerned within the auto industry there's not going to be incentive for people. the price of oil will go down and there's not going to be much inseptember tiff, and we need to replace the tax credits that we have to incentivize some of those purchases. would your message be to the auto companies, chin up? >> well, let me just say on tax policy. let's just focus on that. my proposal that i described here for an environmental tax system would raise the taxes at the federal level. on motor fuels. on about 39 cents per gallon at the pump. so we're talking about an incentive to conserve. we're talking about an incentive

to use more efficient vehicles. we're talking about achieving those goals, not just writing them into the law. >> over what period of time would that be visit? >> the period of time -- well, this is an incentive that is going to be permanent. and we know that -- >> but, in terms of a rampup? would it implement all at once, or over a period of months or years? >> i would certainly put in -- you know, we're not talking about big numbers here. 39 cents per gallon, i think that's something that could be introduced in the code tomorrow. >> okay. thanks very much. thanks so much. >> you probably don't want to introduce it. >> not before november. >> not before november. >> on just a question that came to my mind, dr. jorgenson, you keep talking about the price that determined technologies and development. i understand that's a big, huge driver. and i agree that oil demand is pushed up commodity prices

significantly, whether it's china, india, other developing countries. but the question comes down to price volatility. essentially, i assume you're saying there's not nudge the government can do about tax volumivity. if prices are volatile, they're volatile. with coal, it's going to be soft. the world is just so complicated. there's so many different dynamics, worldwide. many of them unexpected. so i presume you say let price decide. let price be what it is and let entrepreneurs and developers do what they can, develop whatever they can, given the prices they have. >> i'd like to go back to a point, senator. you said that we need to have a diverse source of energy supply. and we do, in this country. that doesn't mean it has to be the same diverse supply every

year or every decade. things change, including technology and supply. and tax policy. and so we need diversity. that is something is that contributes to low volatility. but this country has, as mr. hamm would be the first to tell you, a very competitive industry on the supply side of fossil fuels. we are a very competitive industry in the supply of renewable energy sources, both solar and wind. and, therefore, you should think, as you just suggested, in terms of relying on these very, very well structured markets. but they're not going to do the job by themselves. that's where we come to the hidden costs of energy combustion that i've harped on over and over in this hearing. and so we shouldn't say that free markets are the answer. but nobody here has said that. i haven't heard a single voice of support around the panel or around the senators here that are present.

so, i think we need to -- the lead markets let them work. we've got to recognize the fact that let the government has a role. i've tried to spell that out. >> and also, as dr. jorgenson's terms, externalalities, the costs associated with fossil fuels. >> certainly, i think the market place will work. and it has worked and things that bring down the price. we've seen that. >> but the environmental costs in fossil fuels. >> well, the environmental costs of fossil fuels, as i see it in our business, at least, are minimal. we're drilling up there with equal pads. we're not disturbing much of the land. very good storage of the land. we have small cost of production of these fossil fuels, as far as

environmental. >> okay. >> sir, thank you. >> i want to thank you all four of you for being here today. i have been listening very carefully. and i want to compliment you, mr. hamm, for having the guts to do what you've done. i agree with you on the cost of production. it's been a tremendous benefit for the oil industry, at least the independent oil industry in this country, without which i don't think we would be as far along as we are. the real question we have is, should we have any of these tax expenditures or deductions in lieu of the fact that we might reduce corporate tax rates. low enough so that that would take care of it. but in your industry, it's a special industry, there's no question about it. and there's a lot of risk involved. a lot of money involved.

and you can go broke easier in your business than any other business i know. and i just want to compliment you for what you've been able to accomplish and the guts you've had to get the things done. we'd like to you weigh in and help us to understand what we really do need to do with regard to tax reform. professor, i've enjoyed your remarks very much today. >> thank you. >> and, of course, phil, it's great to see you again and don. we appreciate all that you've had to say, both of you. and this has been a very interesting hearing for me. so we'll have -- >> thanks, sir. i'd like to say, though, on the first client list it might have been jerry brown otherwise there's no free lunch, i'm thinking of tremendous gas development in eastern montana but also very significant impacts on the community. schools, water treatment. clean water. housing. huge adverse impacts. now there's very positive

impacts, with the revenue and so forth. but local communities, law enforcement just can't keep up with the boom and bust that's developing in, say, eastern montana. so i do think we all have a role to play together that are going to help each other with respect to those provisions. let me ask this, is there anything else anybody wants to say, or has anybody said anything so outrageous that needs a response? >> i'd like to correct -- >> on either side of the table. >> could i correct an error? >> sure. >> the henry hub is in louisiana. i realize everybody else here now it. i had to read it. >> everybody knew that. this is obviously very complex, extremely important subject. it's not the last time we're going to be dealing with it. i urge us to keep working together. thanks very much tour taking the time.

this is adjournment. c-span networks will be live for a number of events today, taking to you the american enterprise institute for remarks by the senate armed services committee ranking member john mccain with his views on the situation in syria. live at 1:00 eastern right here on c-span3. and florida representative allen west speaking at the conservative black forum about economic empowerment in the black community. also live on the fannian network c-span 2.

>> we are in an incredibly important era for the future growth of the software industry and the future of american companies, base companies to be successful for which things like it matters, but they're only one element of what the u.s. does will need to take account of what's happening nationally. and we have to break down barriers where we see them exist but also find a balance. >> tonight, business software alliance president and ceo robert hollyman on the industry's next steps, fighting piracy and communication. next, officials from denver and pittsburgh discuss their strategies for creating economic growth focusing on education, collaborating with the business community and investing in the high-tech and health industries. this panel was part of the u.s. chamber of commercial summit in

washington last week. it's just under an hour. good afternoon, everyone. if you'll be so kind as to take your seats, we'll move on with our program. i'm al martinez fonds i'm the executive director for policy innovation, and i'm sitting in for a poor substitute for margaret spellings off with the governors still doing an interview. it's my pleasure to introduce to you one of the national foundation's fellow and scholar nick schultz who will be moderating the next panel. nick has conducted original research on high-skilled innovation and its importance on america's competitiveness. in addition to his work with ncf, nick is the dewitt fellow at the american enterprises

institute where he special ices in political, economic and technology research. he's the editor in chief of american.com. aei's online journal focusing on business, economics and public affairs. nick also so authored an acclaimed work on modern economic growth and development with arnold king called "from poverty to prosperity." this influential work is on ncf's list of books that drive the free enterprise to date. nick has already made an important contribution to ncf and policy efforts but most importantly, his critical thinking, creative research and thoughtful analysis are contributing immeasurably to the economic debate. please join me in welcoming nick schultz. >> thank you, al. thank you, al. and welcome, everyone, to this

panel. on city case study, both jobs and innovation at the local level. as al mentioned i work at the american enterprise institute, we do a lot of work on national public policy issues. and a lot of times, the discussions about them can be really abstract. and one of the things that i like about what ncf does and what the chamber has been doing, both through its enterprising states and studies and series, but also this look that we're going to do at cities is looking at a granular level at what practitioners are doing in the ground on states and cities and it's incredibly important to this because because that's the way we're actually going to find out what policymakers are facing and the business community is facing when we actually look at cities that face challenges and take steps to rise and meet these challenges. and we have two very good examples of those today in pittsburgh and denver. and i'm particularly glad that pittsburgh and denver, two of my

favorite cities, in part because of their respective football team, the broncos and steelers are in the afc so the redskins don't have to worry about them in trying to win the nfc. super bowl is another matter. you should have on the table in front of you this study which is an yououtgrowth of enterprising states study. it's a look at denver and pittsburgh. i just want to give you a couple highlights then we'll get into the discussion. pittsburgh and denver were good choices because -- the u.s. has about 50 metro areas that are a million people or more. and both pittsburgh and denver had, in recent years, much, much higher job growth than the other cities. about a percentage point higher in recent years which is pretty remarkable. and one of the things that the report highlights is the importance of cities as their

policymakers and businesses as their thinking about how do we create jobs and provide economic opportunity, is to understand what your innate strengths are. now, there's a temptation, when i think when policy making get into office to say, okay, we need jobs we need dynamism and economic activity. we'll think of silicon valley, we'll imitate what they do. and they'll say, you know what, the movie industry is important for l.a. maybe we can get movies here. that will be a driver of growth and jobs. but it doesn't look at what's really innate or specific to a city itself and try and leverage that. but pittsburgh and denver are good examples of cities that have done that, that have looked at what their own inner strengths are and have said how can we build on this? let me give you a couple briefly examples. both cities are known for having a tradition of manufacturing. now there's a perception, i think it's a false one, that

manufacturing is on decline in this country. my colleague at ncf fellow mark perry has done a lot of research on this. there's actually somewhat of a manufacturing boon going on. if you look at advanced manufacturing. pittsburgh and denver are a good example of cities that have looked to their roots in manufacturing but have made this jump into advanced manufacturing with higher jobs, higher wage, higher productist, and it's a remarkable success story. another example for both cities, they both harness the potential of the new energy boon that's going on, natural gas and the like. some of the governors were talking about this, well, states are just happy and fortunate to be sitting on top of the energy reserves but as my friend joel who spoke to you earlier can attest there are plenty of states sitting atop of energy deposits. california say good example. this is an example of political

leadership matters and pittsburgh and denver are two cities taking advantage of the natural resource endowments they have. those are areas that both cities have in common. but one example, where denver has leveraged a traditional strength is in trade, denver's a traditional crossroads. and it's built on that tradition to really leverage international trade. it's been booming. its exports are up 70% since 2005, for example. pittsburgh has had a tradition of higher education both with great research universities like carnegie mole, university of pittsburgh and the like. and it's leveraged those assets to become a real leader in things like health care, robotics, information technology and the like. so i think that's important that we think about that when we're trying to draw lessons in other states and other community. so here's how this is going to work. we're going to have a conversation. you all should have pieces of

white paper on your tables. i ask that you write down questions, which will be submitted to me so that we can get questions from the audience. and what we're going to do, we're going to start to my right. your left. we're going to go down, we're going to hear about two or three minutes. just a little bit of an overview from our panelists. the first one that we're going to hear from is the honorably michael hancock who is the mayor of denver. with that i'm going to turn it over to mayor hancock who is going to talk to us. >> thank you, nick. i want to thank the u.s. chamber for this invitation to be here today. i think when you take a look at denver and identify what best describes our position, kind of the things we have done over the years, even prior to me arising as mayor of the city that has helped sustain and ignite our growth over turbulent years. words such as regalism, partnership, particularly private partnerships with my

friend and colleague to the left here, kelly bruff, as well as with devita and other companies, as well as collaboration, these are words which quite frankly, and i should also say vision have solidified our city going forward. they started decades before i arrived. to give you a hint of what i'm talking about. 150 years ago, denver was considered a city that was too dead to bury. that's a direct quote from an economic development leader. and when they started running trains from cheyenne, denver realized if it connected with cheyenne with a train, it could create an economic opportunity as a city. fast forward to the new change in transportation where air became the more dominant form for people to you've around the united states and to move product. denver, visionaries had the foresight to open up stapleton international airport. and it didn't take long before it became the most dominant form

of commerce for the city of denver. when the economy began again, it was the division by the name of federica pena who said let's build a new airport, we have become stifled here and we didn't grow. then in difficult times, denver responded by building denver international airport. as a result, this city began to -- to take its journey to what i love governor herbert said, beginning to embrace the global market. now, i arrive in 2011 as the new mayer, and we look at emerging industries which call and beckon cities to begin to embrace kind of this globalization. in other words, we will be most successful if we do a few things. number one, embrace the global market. two, work on investing locally which means we got to do the things necessary to be successful. educate the workforce.

make sure we are investing and leveraging those emerging markets in the global industry there be contracting and having a reason why someone would want to come to your city and invest, and, two, why we want to go globally and invest. and thirdly, invest in our infrastructure, which to me to build the most vibrant down in denver. as a result, you have companies like devita wanting to relocate. as a result, you have a massive investment of transit system. as a result, we are the number one destination for 18 to 30-year-olds in the nation today. they are moving and flocking to denver in droves. now, they're coming without jobs, but they're coming nonetheless. creating a new base for us and as a result, we began to take a look at how we can use and leverage this in the city, in the middle of the nation where you can get anywhere from denver

in the matter of 2 to 12 hours anywhere by air, leveraging that, that to the global attraction to the city. the last thing i'll say to you, through the investment of the our infrastructure, is that at the height of this recession our then mayor john hickenlooper led the investment at the tune of $500 million bond issue. as a result, four years later, as we begin to emerge out of this, you find denver city as the number one city for the creation of construction jobs because we've been building and investing during these economic challenges. that sense of vibrancy is beginning to attract even more to the city. as mayor, it's an awesome tool to use to market the city for job markets. >> thank you. kelly bough.

>> thanks it good to be here. just to follow up, in colorado, i think the huge benefit of why we get to sit here today with pittsburgh, is that the history of this country and frankly, the world is if you sat on a body of water, chances are good, you could find your way towards success economically. and technology has changed that and positioned us who are inland to find our place in the world and really be competitive, but it required a different approach. i think the two things we have been both lucky and good, and we accept both of those, is, one, in the development of our workforce. we're the second most educated state in the country. some of that is because we're lucky. people want to move there because of our quality of life and what we deliver as a state. and the second one is, i think we're willing to acknowledge some of our weaknesses and that is graduating our own kids and preparing them to be the workforce that we want.

and i think the willingness to call out where we're not as strong has been a huge, huge advantage to us. we tend to do it very early and do with great vigor. the second thing i would say is our business climate and our recognition. that we also, because we didn't have a history of needing to build our economy the way many cities on the coast have, we didn't know you were supposed to ask things like what's your family name? and where did you go to school? did or ancestors come over on the "mayflower. ""we skipped those questions and we have questions like do you want to contribute? how can we help? do you need help? and do you want to contribute to our community? i think it's a very good competitive edge that has positioned us very well as we go into this next economic future that we face in the world. i'll quit there and look forward to the discussions we're about to get into. and thanks for having us here, nick. >> kelly, thank you. now, you would expect the mayor of the city and someone w