AFTERNOON SESSION

Senator HATHAWAY. Unfortunately, the room has been committed to somebody else at 1:45 o'clock, but I would like to get your statement in anyway. The entire statement will be made a part of the recoed, and we are going to try to find another room to continue this afternoon, if possible, and if not, tomorrow morning. Could you make it tomorrow morning?

Mr. ČRAVEN. Yes, sir.

Senator HATHAWAY. Well, we will make the entire statement a part of the record, and you can summarize it if you wish. We will just stay here until the other group forces us out.

STATEMENT OF DONALD B. CRAVEN, ACTING ASSISTANT ADMINISTRATOR, ENERGY RESOURCE DEVELOPMENT, FEDERAL ENERGY ADMINISTRATION, ACCOMPANIED BY EDWIN A. KUHN, ACTING ASSOCIATE ASSISTANT ADMINISTRATOR FOR ENERGY CONVERSION, FEA; AND NORMAN LUTKEFEDDER, CHIEF, SOLAR ENERGY BRANCH, OFFICE OF ENERGY CONVERSION, FEA

Mr. CRAVEN. Mr. Chairman, it is a pleasure to be here today. Accompaning me is Mr. Edwin A. Kuhn, who is Acting Associate Administrator for Energy Conversion, and Norman Lutkefedder, who is the Director of our Solar Energy Branch within the Office of Energy Conservation.

Because of the time problems, I will summarize my statement, if I may, and submit it for the record. I think in order to understand the role that solar energy must play as an integral part of our energy program, it will first be necessary to summarize the major elements of the President's energy program to describe where we think we ought to go in energy.

As you know, the President proposed a series of actions by which he hoped to reduce oil imports by 2 million barrels a day by 1977, continuing on out through 1985. These actions were based on a series of taxes, excise taxes and import fees. At the same time, there were a number of actions on the supply side; the decontrol of new natural gas, the decontrol of old oil, by which we hope to accelerate domestic energy production, as well as production of a number of other resources. The various taxes which were to be collected, approximating $30 billion, were to be refunded to the economy, and lower- and middleincome groups were actually to receive more in terms of return than their increased energy costs under the President's program.

Under the various programs and plans which the President recommended, it was hoped that by 1985 the country would be importing no more than 3 million to 5 million barrels of oil a day. And we hoped to make up any deficit from a future embargo through an emergency strategic storage system and emergency standby procedures.

The role of solar energy in this program is going to be dependent, I think, on the national energy program which emerges from the Congress. As we developed the Project Independence Report and

an accelerated case for solar, we could be having a 1.8 million barrel per day oil equivalent from solar by 1985.1

Solar heating and cooling alone could be supplying us with 1 million barrels per day by that time, and by 1990, under this accelerated case, we estimated that solar could have an impact of 7 million barrels per day oil equivalent.

Now the role of the Federal Energy Administration in solar, we suggest, is twofold. First, in the development of national energy policy and the role that solar must play in that policy. Second, we are very much involved in the active implementation of accelerated utilization and widespread commercial application of solar energy technology.

This can be done in a number of ways. First, through the dissemination of information throughout the economy, and second, through an aggressive effort to move solar forward from the research and development stage to the actual implementation in the marketplace, through the development of an industry and a strong and aggressive industry infrastructure.

Senator HATHAWAY. Do you think ERDA is moving fast enough? Mr. CRAVEN. We think the administration's program, the program that ERDA has in mind, is vitally necessary. We think that further research and demonstration must be done to refine solar technology. But still, there is a broad base of solar technology which we consider proved, and which is generally unavailable to the public because of a lack of an industry infrastructure.

So we conceive the role of FEA to be to design programs which would eliminate those impediments that now exist to the development of this infrastructure, and to aggressively move forward with the commercialization program on a rather broad scale at this point.

Senator HATHAWAY. Do you think the progress that ERDA has made so far is satisfactory?

Mr. CRAVEN. Yes, sir, for the purpose for which ERDA is looking at solar, we think it is very satisfactory, and that the plan is excellent.

At the same time, we feel that action must be taken which will complement ERDA's efforts to move the proved solar technology that now exists into the marketplace by educating the public as to its availability, by creating a demand for solar equipment which is now proved, so that the infrastructure will develop to complement ERDA's efforts.

Senator HATHAWAY. Do you think the timetable that was testified to this morning is realistic?

Mr. CRAVEN. Yes, sir, we think it is realistic.

At the same time, we do not think that we can sit back and wait for these things to develop at the same time we are doing these demonstration programs. We think it is necessary to get the proved solar technology into the marketplace.

Solar heating has been proved for a number of years. In the 1940's, approximately 25,000 homes in Florida were equipped with solar heating, and I understand approximately 10,000 in 1 year. And I mean solar water heating. So this type of technology is there, it is ready. Much is going to depend, however, on other actions that are taken on the energy program.

1 Federal Energy Administration, op cit. See also the "Final Report of the Task Force

For example, the reason, as I understand it, that solar water heating in Florida did not become more widely disseminated was that low cost natural gas became available through the interstate market. As a result of this low cost regulated gas, the market for solar water heating was substantially undercut. So, because of the high first cost of solar, its commercial availability is going to depend to a large degree on what actions are taken with respect to the deregulation of oil and new natural gas under the President's program.

I think that the Committee would be interested in several actions which we have underway at FEA. One, I would like to mention is the Government buildings program which is under consideration at the staff level. We think it has great potential and should be considered by the administration and also by the Congress.

As this committee no doubt is aware, the Government currently owns 400,000 buildings containing 2.4 billion square feet of floor space. The Government buildings program, which we have under consideration, envisions an approach somewhat similar to the following:

First, we would require that all designs for Federal buildings initiated from this point on include an assessment of the feasibility of using solar heating and cooling at this time, and the feasibility of including provisions within the design to enable relatively easy retrofit to solar heating and cooling at some future time.

Second, we would consider that it be required that estimates of costs of buildings, to reduce the demand for energy within buildings, include conservation and the use of energy conversion products-for example, solar heating and cooling systems-and that these cost estimates be done on a life-cycle costing basis in order to be able to fully analyze the cost of solar as compared with the cost of heating by fossil fuels or electricity.

Third, we would anticipate that this program might provide for substantial Government requisitions of solar heating and cooling systems by requiring purchase of solar systems currently found to be competitive with conventional systems. And also requiring, to some extent, in addition to the purchase of competitive systems, that certain quantities of economically noncompetitive heating and cooling systems be purchased by the Government in order to contribute to refinements of the technology and to the development of the necessary industry infrastructure.

We believe that if this project were initiated now, a substantial amount of oil per day would be saved by 1980 in Government buildings, and furthermore, we would have the technology and industry infrastructure in place by that time to contribute aggressively to our national energy goals.

The significance of this effort would be to have a very stimulative effect on the solar manufacturing industry, and the development of the industry infrastructure.

With respect to small business, we recently set up an Office of Small Business within the Federal Energy Administration to analyze the impact of energy costs and energy policy on small business, so that we could be aware of how business is being affected by our decisionmaking. And also, to educate, or provide a resource, whereby a small business could be educated as to what was going on at the

communications program to the small and minority business communities, with particular emphasis on energy conservation and on the emerging area of energy conversion technology including solar.

We think that this would be a very productive effort, and would be a way of providing the small minority businesses with information about the possibilities for competing in the solar energy area.

Senator HATHAWAY. I hate to interrupt you, but this room is going to be occupied shortly.

I think that they are making plans to use the room across the hall, so why don't we wait a few minutes.

[Whereupon, a brief recess was taken, and the hearing reconvened in room 3110, Dirksen Senate Office Building.]

Senator HATHAWAY. All right, continue.

Mr. CRAVEN. Mr. Chairman, I am through summarizing my statement, but for the record, and with the committee's permission, I would like to submit also a statement of Mr. Zarb's, presented this morning before the Subcommittee on Energy Research, Development, and Demonstration of the House of Representatives hearing with many of the same issues that we have discussed today, and which, I think, is also complementary of the position presented today. [Testimony resumes at page 460. The exhibits referred to follow:]