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July 29, 2014

Host: Ted Simons

Arizona’s Future: Strategic Roadmap

  |   Video
  • Arizona’s Transportation and Trade Corridor Alliance has completed its Strategic Roadmap: a plan for Arizona’s future transportation needs. Created by a group of experts from the public and private sectors, the Roadmap seeks to better connect Arizona to the global economy. Arizona Department of Transportation director John Halikowski, Margie Emmermann, the executive director of the Arizona-Mexico Commission, and Sandra Watson, president and CEO of the Arizona Commerce Authority, will discuss how the plan intertwines commerce, trade and transportation.
  • John Halikowski - Director, Arizona Department of Transportation
  • Margie Emmermann - Executive Director, Arizona-Mexico Commission
  • Sandra Watson - President and CEO, Arizona Commerce Authority
Category: Business/Economy   |   Keywords: business, economy, strategic, roadmap, arizona, transportation, trade, commerce,

View Transcript
Ted Simons: Tonight's edition of "Arizona's Future" looks at the state's path to global market expansion by way of a strategic roadmap created by Arizona's Transportation and Trade Corridor Alliance. Here to talk about the goal of better connecting Arizona to the global economy is state Department of Transportation Director John Halikowski, Margie Emmermann, the Executive Director of the Arizona-Mexico Commission, and Sandra Watson, President and CEO of the Arizona Commerce Authority. It's good to have you all here. I'm excited about this, this is the future, looking toward the future and doing good things. But the idea behind developing this roadmap, where did all this get started?

John Halikowski: Well, Ted, I think it's safe to take that Margie and Sandra and I have talked about this for years. We go all the way back to 1990 and the Symington days. But more importantly, Governor Brewer in 2012 recognized that there's a unique confluence in Arizona based on our geographic location between international and national markets. And the fact that you need international relationships, trade and investment, and you also need the transportation infrastructure to tie it together.

Ted Simons: We have always needed this. But this roadmap really sets out ideas, goals and recommendations.

Ted Simons: Have we been slacking on this over the years?

Margie Emmermann: I don't know that we've been slacking, but we haven't aligned as we have through this roadmap. When we get the Department of Transportation, it ties in nicely. It says we're about global economy. I think that alignment is what is strategically important, in addition to the great information you have here. If you don't bring everybody together and leverage and maximize our opportunities, that's where perhaps we've lost a little bit.

Ted Simons: The goal of growing value-added industries, what does that mean?

Sandra Watson: The Arizona Commerce Authority was actually established as you know to create jobs. The focus is to work with companies who are export-driven, base industries that are bringing more value back to the state. When we look at the industries of the future, and we look at the opportunities that Arizona has and working obviously, as Margie and John said, in a global environment, it's really absolutely critical that we look at those industries that have the opportunity to bring more wealth back to the state, and create more jobs.

Ted Simons: So basically the made here, sold there idea on steroids?

Sandra Watson: Yes, correct.

Margie Emmermann: Absolutely.

Ted Simons: If it's made here and sold there, how do we get it there?

John Halikowski: That's an interesting point. You hear a lot of folks saying we want to double international trade. One of the key goals is to double international trade by 2025. Obviously in order to move raw goods in and finished products out, or in some cases as goods and materials pass five or six times through our international border with Mexico, before you have a finished product, it's very important that you have a good transportation infrastructure to enable your key industries to compete.

Ted Simons: And to get that good transportation infrastructure, what are the biggest challenges right now?

John Halikowski: I think Arizona really needs to focus on what we call key commerce corridors. If you look at the maps, it's very obvious to us we have connections to key markets. Not only in California and Texas but Mexico and Canada respectively. If you take a look at where we are in Arizona, we have those connections between the ports and Long Beach and L.A. and California to the west of us, which gives us the international connection. You have I-19 and I-10 to the south of us which gives us a connection to Mexico. And then 10 to the east going into Texas. And let's not forget the all-important I-17. We don't just live for industry, we also live for tourism and 17 takes our residents up north. Again, you mention Texas and California, Mexico obviously. Arizona's geography, is it -- are we sitting on a gold mine here? Are we does sitting on an opportunity we just haven't taken advantage of, considering those markets?

Margie Emmermann: If you look at where we sit, we're a gateway. With the explosive growth that Mexico is going to have, we have the opportunity to be a platform for people to come into the region, do manufacturing, do a lot of value-added services and we can be a platform for North America for people coming into our region. We now have the infrastructure at our ports of entry. We have a plan, we have everything ready to go out and market. That's what this is all about. We need to start marketing the greatness that Arizona has.

John Halikowski: It's not just Mexico, let's face it. California and the San Diego Basin area, you've got over 16 million consumers and a -- a trillion-dollar-plus GDP, which I think speaks to what Sandra is trying to do with California.

Sandra Watson: Sandra Watson: We have two offices in California and we are connecting our business communities. Making sure their opportunities for Arizona businesses in California, but also opportunities to California businesses here in Arizona. As we start to talk about our strategic proximity to these world markets, and if we think about California, and it's the ninth largest economy in the world, Mexico is the 14th largest economy in the world tied with Texas.

Margie Emmermann: Is Mexico going to be the eighth largest by 2015 ?

Sandra Watson: It's rapidly growing. When you look at Arizona's strategic position among these world economies, there's tremendous opportunity. That really is what the goal of this roadmap was, again, as Margie and John talked about the alignment piece is critical. The infrastructure piece has to be there if we're going to move goods and services and people. When we look at those markets and look at the advantages Arizona currently offers, we are ranked in the top five for aerospace and defense. We are ranked in the top five for semiconductors we have a national -- we're ranked seventh as far as technology related industries. We have tremendous assets available to us here in Arizona. When we position Arizona in these world markets, we have some critical advantages that other markets don't have.

Margie Emmermann: That's the important piece.

Ted Simons: Please.

Margie Emmermann: We need to start really marketing ourselves, leveraging the assets, marketing our opportunities and really telling the world what Arizona is about. That's I think what all of this brought together and brought to mind. We've got so much to market.

Ted Simons: We've got so much to market. When you've talked about aligning policy and action, how do you get stakeholders, how do you get the decision makers on the same page? I know it's like herding cats to a degree.

John Halikowski: To a degree.

Ted Simons: The world is passing us by. We can't sit around and wait for this much longer.

John Halikowski: I think that raises a very excellent point, how do you bring stakeholders to the table, and how do you get alignment?

John Halikowski: We've looked at other states and Texas, how they have achieved alignment. People there believe that infrastructure and trade and the economy all go together. And investment and infrastructure to boost that economy is a good thing to do. So what we've been doing for the past three years is we've been sitting down with a lot of our business folk. ADOT has visited over 300 business owners in the past three years. We're also sitting down with folks like the Arizona Chamber of Commerce, the Phoenix Chamber of Commerce. We're involved in a lot of different ways with different organizations to say, look, here are the maps and it's pretty easy to see where Arizona is located. You have big cities to the west of us and to the east of us. Huge trading partners to the north and south of us. Essentially you don't have that confluence anywhere else in the country, except if you look perhaps at Chicago and New York. We have a huge market we sit in the middle of.

Ted Simons: I asked before, but let me ask in a different way Has Arizona missed the opportunity to get on, latch on to these changes in the global landscape? This all makes sense. But this would have made sense five years ago, this would have made sense 10 years ago. How do you know in five years we're not saying, hey, this makes sense, we should have done this five years ago. How do you get some action instead of all the talk?

Margie Emmermann: I don't want to talk about what happened in the past. We want to talk about the future, that's what this roadmap is about. You're right, Ted, we need to start really getting our opinion leaders, elected officials, people at county level, city level, every level to start all talking from the same page. That's why we put this roadmap together, to that people understand. In order for us to be competitive, this is what it's going to take.

Sandra Watson: The other piece to add to that is, during this process it gave us an opportunity to engage a greater number of people that are very interested in advancing Arizona. So we held focus group discussions, had hearings, we went across the state. We heard from business leaders, we heard from community leaders, we had the economic development groups involved in this facility, obviously the transportation infrastructure groups. This is a shared responsibility bringing the public sector and the private sector together with academia. If you look through the report you'll see a number of key leaders, both on the community side and the business, have really come together and have decided that it is a tremendous opportunity for Arizona to begin to have this discussion about global competition. It is fierce competition out there, as we know. Lots of states are involved. Talking about how to better their states and their communities. We're talking about opportunities where we can connect with other markets. We have a strong relationship obviously with Mexico, Margie and our team have been doing excellent work and making sure those relationships are there. We've got opportunities in Mexico and working with the business community. John and his team have been talking to the folks in Mexico, as well. Canada is a huge market for us. We have connected with a number of business and community leaders both in Canada, as well as here in Arizona. There's a tremendous business community here in Arizona. In fact, really representing Canadian interests. We've been working with them, if we start to really capitalize on those strategic opportunities, we can advantage Arizona at a much more rapid pace.

John Halikowski: The other thing I would say is that report doesn't exist in a vacuum. And it's not a final version. In other words, it's a dynamic report that we're going keep adding to. But this will eventually feed up into the work Sandra's doing with the Morrison Institute into a larger report, and call to action for the State. This is a key piece of a larger piece we're working on.

Ted Simons: So if I'm a decision maker, and you hand me the report, what do you want to emphasize in there? What should I need to know?

Margie Emmermann: You need to know Arizona has a lot of opportunities, but there are going to need to be some decisions made in some very thoughtfully crafted decisions about why good investments need to happen in the state of Arizona. Things like key corridors and decisions we all need to come together to make.

John Halikowski: It's an interesting question when you talk about lawmakers. Earlier you had flashed the bulb map up there. In the last legislative session I presented to a joint House-Senate transportation committee. One of the things we said to them is, look where Arizona sits and what those orange bubbles represent is the GDP of those various regions. If you look at where we're at, it makes a lot of sense to take our 1970’s interstate system and begin to upgrade, not just the interstates but also look at other modes whether. All of this fits in a logistics picture we need to get focused on. Trade is just not among us here in Arizona, not even with other states. We're in global competition.

Ted Simons: Are those decision makers listening?

Margie Emmermann: I believe so. I believe as I said, as we talked about earlier, this is a shared responsibility and a shared commitment. The dialogue is started and we hope to continue that dialogue moving forward.

Ted Simons: Very good, good to have you all here. We've got stop right there. It's an encouraging report and we won't look back too far. [laughter]

Ted Simons: Thank you all for being here.

Sandra Watson: Thank you.

Ted Simons: That is it for now, I'm Ted Simons. Thank you so much for joining us. You have a great evening.

EPA Rules on Power Plant Emissions

  |   Video
  • The Environmental Protection Agency has issued a final rule to control emissions from the Navajo Generating Station in Northern Arizona. Not all are happy with the new rules. Sandy Bahr, director of the Grand Canyon Chapter of the Sierra Club, will discuss her organization’s concerns.
  • Sandy Bahr - Director, Sierra Club – Grand Canyon Chapter
Category: Environment   |   Keywords: environment, epa, rules, power, plant, emissions, control, concern,

View Transcript
Ted Simons: Good evening, and welcome to "Arizona Horizon," I'm Ted Simons. The U.S. Environmental Protection Agency yesterday issued new rules to reduce emissions from the Navajo Generating Station. The new rules incorporate recommendations from a technical working group made up of stakeholders and the power plant's owner-operators. Sandy Bahr is the director of the Grand Canyon chapter of the Sierra Club, which is not on board with the new rules. Thank you for joining us. Before we get to your concerns, what exactly did the EPA decide yesterday?

Sandy Bahr: Basically what the EPA did is, instead of going with the proposal that it came out with, which is the proposal that met the Clean Air Act requirements, the EPA has chosen to go with a proposal submitted by this technical working group, which includes Salt River Project. And they basically have said they are going with a proposal that allows significant delay in cleaning up Navajo Generating Station.

Ted Simons: Did they explain why the delay was a better option?

Sandy Bahr: Well, there is -- it's a long decision, and they -- they explained A little bit. But in some areas they didn't give much explanation at all, which is unfortunate. But overall they are saying because the plant is on tribal land, they can give it a special exception as one of the reasons that they gave. They argue that it -- that it is better than what they proposed. But that's a pretty convoluted argument. Especially if you look at the technical work group proposal. There's really no certainty with it. There's not a clear path to compliance, which is one of the things that we've raised repeatedly. Basically under the proposal that EPA came out with originally, within five years they would have to clean up the plant. Under this, they can just keep running the way they are, and push it out until, you know, 2029. And then if they are at their limit or over, they would have an interim shutdown. Then it could potentially start operating again provided they actually did shut down. So the only thing in it that -- there are these caps on the pollution that kick in, in 2029. And then in 2024 the plant would close, provided the Navajo Nation didn't acquire it. I thought the plan calls for closing up one of those three generating stations by 2020, or at least reducing the equivalent amount of power that would equate to closing one of those plants. Is that not in the plan? It's one of the alternatives, one of the scenarios included. But again, there's no enforceability of emissions reduction on a year-to-year basis. The only thing that is enforceable are the reports, they have to report on emissions. They have to provide the information. And then when they get out to the 2029, if they have exceeded this interim cap, then potentially EPA could say, well, you have to shut down.
Ted Simons: Again, 2029, the idea is that nitrous oxide emissions will be cut by 80%, by 2030. So the story is if they don't hit that 80%, you're concerned that the enforcement measures that have been talked about, aren't strong enough to keep some sort of interim plan, or we can't make this, we've got to figure out plan B, plan C, these sorts of things?

Sandy Bahr: First of all, we don't know what this proposal will do. It's intended to protect the air around Grand Canyon and 10 other national Parks and monuments. Obviously in reducing nitrogen oxide emissions it also helps to protect public health. By allowing them to pollute for a couple more decades potentially, they are continuing to affect these national treasures, as well as affecting public health. Again, they could exceed it and just keep running it, and then do a shutdown. It's going to be bad for everyone, bad for the tribes, bad for -- you know, public health and certainly harmful to Grand Canyon and other places. It sound like -- again, this is the result of five years of talks with environmental groups, tribes, the stakeholders as we mentioned. It sound like the goal was to cut pollution, and also kind of take your time doing it, so that you don't lose too many jobs up there in Northern Arizona. It's a compromise and it sounds like the Sierra Club is not happy with the compromise. But if all these people are at the table talking about this for five years, is it as good as you could have hoped for?

Ted Simons: No, not at all. They could have done much better. A compromise means you still get to comply with the Clean Air Act. It would mean people who are breathing the pollution from this plant are not continuing to breathe the large harmful amounts coming out of it. We're talking about one of the top polluters in the country, certainly the biggest polluter in the region. You know, this is a big deal. They ought to be complying with the Clean Air Act. This has been around for a long time. This is not a new provision in the Clean Air Act. It's not like Congress just passed this a couple years ago, and we're saying, oh, you have to do this right away. You know, they had 20 years to reduce emissions to comply with this. Now they want to stretch it out a couple more decades. That's just unacceptable, that's not a good compromise. As far as the retrofitting, the Clean Air Act and getting that in line the EPA even recognized that the threat of the plant closing down and the effect it would have on CAP, jobs in Northern Arizona, the whole nine yard, was enough for them to consider this particular compromise. Again, can you at least see where they are coming from on that?

Sandy Bahr: Well, I can understand that they want to look at all of the issues and should. And so did we. But this proposal allows the plant to continue to pollute for a much longer period of time. And it does, it harms people in the region. Starting now to look at a transition plan would be appropriate. How is this going to be helpful to people who work there if they run this dirty plant up until 2029, and say, okay, we're shutting it down. That doesn't help anyone. We really think that they need to implement the Clean Air Act, clean it up, work for promoting clean energy throughout Arizona. I mean, that's something that we have been working on for decades. We're big supporters of renewable energy, energy efficiency programs and those are programs that can provide good jobs that are more sustainable, and that don't create the same kind of health problems we see from this coal plant. EPA said that over time there would be a 72% improvement of haze at the Grand Canyon. This is over time, it's only 72%. I know it's not 80% or 90%, but is it good enough at least for a plan, at least to get started? We could be talking about developments here in the next decade or so that could make this whole thing obsolete, couldn't we?

Sandy Bahr: Well, you could argue that the coal plant is obsolete. That's why Nevada Energy and L.A., they are getting out of the plant they are not investing in coal. Coal is a high risk. So you're seeing states and individual companies get out of coal generation. It really is an old technology that -- that plant is one of the biggest polluters. Really, delaying the action on it and allowing it to continue to pollute, that just means that, you know, we're subsidizing water with more pollution. And we shouldn't be subsidizing Central Arizona Projects with dirty air. That's just wrong.

Ted Simons: Last question is a lawsuit likely, do you believe, to block implementation of this?

Sandy Bahr: We don't know, we're looking at it right now. We believe strongly that the Environmental Protection Agency has a responsibility to uphold the Clean Air Act, a responsibility to all Americans to protect Grand Canyon and these 10 other Parks and wilderness areas.

Ted Simons: It's good to see you again. Thanks for joining us.

Sandy Bahr: Thank you.

Ted Simons: We should mention tomorrow we will hear from members of the technical working group that successfully put together this plan to reduce emissions at the Navajo Generating Station.