Gary Cohn, President and COO of Goldman Sachs and Al Monaco, CEO of Endbridge, spoke with Bloomberg Television’s Alix Steel today about efforts to boost U.S. energy investment and the impact on economic development. Cohn also discusses House Majority leader Eric Cantor’s loss to Tea Party challenger David Brat in yesterday’s Virginia primary.

Gary Cohn

On Eric Cantor’s defeat, Gary Cohn said: “I think Eric has been a great leader. He’s been a great public servant.  And I think we’ve all enjoyed having Eric in the Congress.  I think it more in essence makes a statement to some degree about what’s going on in Washington, and can you go to Washington and try and be a compromiser and try to get things done and be a centrist and get re-elected?”

When asked what encourages capital investment in an environment that is so uncertain, Gary Cohn said: “You need certainty.  You need to understand how you’re going to get paid off.  Yes, you’re willing on take on risks, nothing is guaranteed, but you need to have regulatory certainty, you need to have environmental certainty, you need to have supply certainty.”

Monaco added to this: “The reason why we all search for more certainty is because that will reduce our cost to capital and make us more competitive in getting the crude oil and natural gas and other products to market. So that’s really the linchpin of all of this, is reducing the uncertainty to make us more competitive.  I think we’re getting there.  We’re making more progress.”

Gary Cohn: More Certainty Needed for Energy Investment

ALIX STEEL:  I’m joined by very special guest Gary Cohn, like you said, as well as Al Monaco, CEO of Enbridge.  Gentlement, great to have you here.

First off, I just got to hit on the news of the day for you, Gary.  Eric Cantor’s defeat in the Virginia primary, I mean, what does it say about Wall Street?  What does that mean to businesses?

Gary Cohn:  I’m not sure it means anything specific to businesses.  I think Eric has been a great leader.  He’s been a great public servant.  And I think we’ve all enjoyed having Eric in the Congress.  I think it more in essence makes a statement to some degree about what’s going on in Washington, and can you go to Washington and try and be a compromiser and try to get things done and be a centrist and get re-elected?

Now, I think for financial markets, for Main Street and Wall Street, that’s an issue that we’re dealing with today more than we were dealing with yesterday at this time

STEEL:  And with Goldman being one of Cantor’s top contributors, I mean, can we take anything away from it as an anti-Wall Street vote in Virginia?  What do you think?

Gary Cohn:  I would have no idea.  My concern, as I said, is much more about Eric being a compromiser.  I mean, Eric stood out on some of the tough issues.  He stood out on immigration.  He was willing to talk about immigration.  He was willing to talk about tax reform.  He was willing to talk about the environment.

He was willing to talk about sticky issues that were sticky for Republicans.  They were sticky for Democrats.  He was willing to try and create a coalition of believers, trying to create compromise, understanding that he couldn’t get everything, he couldn’t get everything done, but he was trying to move forward and create progress.

And I think that’s the real important takeaway from this.

STEEL:  Does this make your business harder?

Gary Cohn:  I don’t know.  I don’t think so.

STEEL:  Maybe too soon to say?

Gary Cohn:  Yes, too soon to say.

STEEL:  All right, well, thank you for your thoughts, Gary.  I really appreciate it.

So now from D.C. to energy, which actually probably isn’t that separate when you take a look at it.  So the idea here of the conference is really how to marry economic interests, business interests, as well as regulatory interests, and environmental interests — very difficult to do.  You gentlemen were both on a panel.  I want to get your take on the biggest stand out.  What are people talking about, Al?

AL MONACO:  You know, first of all, I’m glad you asked Gary that I question about U.S. politics.  I think he handled it much better than I would.

(LAUGHTER)

STEEL:  What, as a Canadian, what do you mean?

MONACO:  Well, we have some views on it, that’s for sure.

I think, really, it’s the — this realization in the energy business that we do have to come to grips with the fact that we need energy.  It’s certainly critical to our economic well-being.  The question is, how do we develop it in a sustainable way?  And I think that’s really what you heard on the panel.  You heard a couple of different views on how to get there.

I think that’s our challenge.  We have the supply.  We’ve got great capital and technology skills to develop it.  The question is how do we all put it together now and make it work for economic development?

STEEL:  And the big question really being what encourages capital investment?  I mean, Gary, what’s going to make companies put money to work in an environment that is so uncertain?

Gary Cohn:  So that was one of the main themes of the panel.  It was uncertainty.  When people are investing capital, especially in the energy sector where the payoffs are multiple decades, when you invest a lot of capital in the energy sector, you get paid off over 10, 20, 30 years.  So you need certainty.  You need to understand how you’re going to get paid off.  Yes, you’re willing on take on risks, nothing is guaranteed, but you need to have regulatory certainty, you need to have environmental certainty, you need to have supply certainty.  And the panel spent a lot of time talking about how can we be more certain about these issues and can we remove these variables from the equation?

STEEL:  I think we can.  I mean, Al, you really have your boots on the ground in a way, right?  You’re responsible for building out the infrastructure in (INAUDIBLE).  Currently you have Northern Gateway is waiting for approval in Canada.  That would bring oil from Alberta to British Columbia to be shipped off, presumably, to Asia.  What do you need to see to feel better?

MONACO:  You know, I’m going to pick up on what Gary said around certainty.  And the reason why we all search for more certainty is because that will reduce our cost to capital and make us more competitive in getting the crude oil and natural gas and other products to market.

So that’s really the linchpin of all of this, is reducing the uncertainty to make us more competitive.  I think we’re getting there.  We’re making more progress.  On the project you’re preferring to, Gateway, I think there we’ve also made some great progress.  And what we emphasized in the panel was you really need to take a different approach today in order to engage communities and make sure we’re addressing their concerns.

STEEL:  Can you imagine just calling up a guy and saying, hey, I’m going to put a pipeline through your

1, 2  - View Full Page