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exceed $200 billion by the year 2000, hindering our industries competing in highly competitive markets. OIT's programs, by spurring energy efficiency investment and research and development, provide a way for industry to become more efficient, clean and competitive. In five minutes, I can only provide a couple of brief examples.

The Crane Valve Company in Washington, Iowa cut its foundry's energy use per unit of output by 29 percent. It eliminated much of its waste stream, and this increased competitiveness resulted in expanded production of 225 percent. Instead of closing, the Crane Valve Company ended up hiring an additional 30 people.

Ohio has more foundries than any other State, and OIT is working with 30 of those foundries to improve their energy efficiency and cost competitiveness.

Similarly, OIT's Industries of the Future is far from corporate welfare. Rather, it embodies the best of Federal Government investing in the manufacturing future of this country. According to Allan Rooks, a conservative editor of the pulp and paper industry's trade magazine, after years of criticizing government, Rooks praises OIT's Industries of the Future program because it encouraged the paper industry to develop its own blueprint for research and helps to fund research and technologies that the industry has pointed out that it needs to improve its future competitiveness.

Equally important, pulp and paper industry spokesmen have been able to use the research partnership to negotiate with EPA to substantially reduce compliance cost under the final cluster rule reducing them from $11.5 billion down to $3 or $4 billion.

And, finally, the Congressional Manufacturing Task Force, with 84 Members in the House, has placed OIT's industrial energy efficiency programs high on its agenda to preserve.

Mr. REGULA. There's a lot of matching money in that, isn't there? Ms. DE VAUL. There is, very much so. In fact, most of their funding is more or less seed money, and it does a fine job of partnering. I want to turn briefly to the Energy Information Administration

Mr. REGULA. You have about one minute.

Ms. DE VAUL. Oh, I only have one minute? All right.

Mr. REGULA. It moves quickly.

Ms. DE VAUL. Okay, it does.

This country spends $490 billion in energy every year. EIA's budget of $72 million represents a mere one one hundredth of one percent of that amount of money, yet it is crucial for several rea

sons.

It allows the energy market to work during supply disruptions serving to quell panic speculation and buying. It provides State level information on price supplying consumption patterns necessary to respond in a timely fashion during an emergency. States cannot replicate the data provided by EIA, and have no ability to collect data outside of State borders.

And, finally, and probably more importantly from our perspective, or at least as important, it provides information used by Members of Congress to weigh the impact of legislative initiatives from as diverse areas as oil import fees, various energy taxes, to respond

during supply disruptions and to evaluate heating oil and propane markets.

Mr. Chairman, this country has gone to war in order to secure its oil, the oil that it needs to fuel its economy. We can ill afford to do away with important energy information that allows those markets to work efficiently.

Mr. REGULA. Thank you.

Ms. DE VAUL. Thank you, very much.
[The statement of Ms. De Vaul follows:]

Mr. Chairman, Subcommittee Members, I appreciate the opportunity to testify before the Subcommittee on Interior Appropriations on behalf of the Northeast-Midwest Institute. Three areas of the U.S. Department of Energy funding represent particularly important resources for the states that make up the Northeast-Midwest region:

the Office of Industrial Technologies funding;

the Energy Information Administration, and

the State Energy Conservation Program and the Weatherization Assistance
Program.

OIT's Industrial Energy Efficiency Programs: Helping Industry Stay Efficient, Clean,
Competitive

By any standards industry is vitally important to the national economy. Industry accounts for about 25 percent of the gross national product, 75 percent of exports, and provides jobs for over 25 million workers. Industry also consumes more energy than any other sector of the economy, 37 percent, with annual expenditures of $100 billion. Similarly industry generates the most waste and spends over $50 billion on pollution control measures annually. Without significant improvements in reducing waste, industries' nonproductive expenditures on pollution abatement and control will exceed $200 billion by 2000.

The good news is that investments in energy efficiency in industrial technologies can deliver not only energy savings, but pollution prevention and productivity gains. Programs of the Office of Industrial Technologies in partnership with industry, government and nongovernmental organizations develop and deploy advanced energy efficiency, renewable energy, and pollutionprevention technologies.

Mr. Chairman, these programs are particularly important in the Northeast-Midwest region, home to many older manufacturing plants. As you are aware, the NICE' grant enabled PPG Industries to develop a system to recover and reuse paint waste water. The system reduced both energy use and waste by more than 90 percent with an investment payback of less than a year. Equally if not more importantly, it helped PPG Industries to regain a competitive edge that allows the plant to remain a productive employer.

Mr. Chairman, we are only beginning to understand the interrelationship between energy efficiency, waste reduction, and productivity. The Crane Valve Company in Washington, Iowa, the largest employer in that small town was struggling to survive in a fiercely competitive market, not only from foreign competitors, but also among the corporate branch plants. With assistance from the Metal Casting Institute, funded in part by DOE, the foundry operation at Crane reduced energy use per unit of output by 29 percent, eliminated much of its waste stream, and increased production 225 percent. As a result, the company has hired an additional 30 employees.

Ohio has more foundries than any other state according to the American Foundryman's Society. OIT currently is partnering with more than 30 Ohio foundries and other metal casting related companies on various projects, including establishing a Metal Casting Competitiveness Research Program, improving casting dimensional control and fatigue life prediction, clean casting, and the development of lead-free alloys.

Mr. Chairman, OIT's programs deliver results. More than 47 completed and tracked OIT projects saved approximately 613.5 trillion BTU, a production cost savings of over $1.57 billion, (total value of all energy saved by technologies developed with OIT support minus the cost to industry of using the technologies, including capital costs, O&M, and any non-energy production costs). Similarly the pollution reductions resulting from OIT programs are equally impressive. The 45.5 million tons of carbon equivalent equal reductions that could be achieved if 4.8 million automobiles were taken off the roads for one year.

OIT's "Industries of the Future" is far from corporate welfare. Rather it embodies the best of federal government--investing in the manufacturing future of this country. Let me give you an example. According to Alan Rooks, Editor in Chief of PIA Magazine (a publication of the pulp and paper industry), “I am not a big fan of government. Over the years I've been critical of many regulatory, legislative, and judicial actions, particularly as they affect the pulp and paper industry..." Rooks goes on to praise OIT's program, explaining that it is unique because DOE encouraged the paper industry to develop its own blueprint for the research. DOE provides seed money for precompetitive research that individual companies would be reluctant to do on their own, which stimulates future technological and economic growth. The investment is modest, with $11.5 million of the $42.7 million to fund research for the Industries of the Future program in 1996, going to the paper industry.

Moreover, DOE helped the paper industry get its act together. Member companies of the American Forest and Paper Association produced Agenda 2020, a technology vision that sets out the research steps needed to improve the industry's environmental performance, energy efficiency, and total productivity. Jo Cooper, Vice president of regulatory affairs for the American Forest and Paper Association explained that she was negotiating with EPA to substantially reduce compliance costs under the final Cluster Rule for the industry from $11.5 billion down to $3 or $4 billion based on their research agenda with DOE.

Mr. Chairman, we need the powerful economic engine of manufacturing to run efficiently and cleanly in order to have a healthy economy. For too long, we have focused a disproportionate share of energy efficiency funding on buildings and transportation. We now understand how important industry is and how energy efficiency can reduce environmental impacts and costs while streamlining production. We have barely begun to explore industrial energy efficiency potential. The Japanese and European governments invest billions of dollars, helping their industry deploy the latest technologies and gain the competitive edge in world markets. We have no similar programs. Our industry is far too important to cut back on the small, innovative6, and extremely effective programs now run by OIT.

The Congressional Manufacturing Task Force with 84 members placed the continuation of

OIT's industrial energy efficiency programs high on its agenda. We know you understand the importance of these programs to our region's economy. We look to your leadership and vision in protecting OIT's funding, our investment in the economy's future.

The Energy Information Administration: Providing Information So the Market Can Work

The second area of funding in the U.S. Department of Energy's budget that is crucial for our states, but also for the nation, is the funding for the Energy Information Administration. Mr. Chairman, it is always easy to cut information gathering programs. There are no constituent groups who will rally to protect data collection. There is often no immediate hue and cry when information is not available. Until it is needed.

This country has been drawn into war more than once in order to secure the flow of oil on which its economy depends. Annually the economy requires in excess of $490 billion of energy in order to function. Surely we can afford to provide EIA with the $72 million necessary to provide the information Congress, state government, the public, and the market need in order to make informed energy decisions, whether related to supply, demand, or price. Mr. Chairman, that represents slightly more than 1/100 of one percent of the national energy bill.

Congress has pared EIA's budget to the bone. Further cuts mean the loss of information and the capability to analyze complex and rapidly evolving energy markets. If more cuts are made in EIA's budget state level data on product price, supply, and consumption will be lost. This data is collected only by the federal government, it cannot be replicated by states since their authority to collect data ends at their state's borders. The loss of this data would be particularly threatening in the Northeast-Midwest region, which is for the most part energy dependent and at the end of the pipeline, furthest from the well head.

Without the state level data provided by EIA states will have little information with which to respond to the next supply disruption and price run up. Oil markets are particularly volatile. The futures market remains extremely sensitive to panic buying, which can quickly occur in the absence of information on inventories, stock levels, supply trends. Many of the nation's energy offices, already reduced by substantial budget cuts, depend on EIA in order to assess and respond to price hikes or supply shortages. Should EIA discontinue its state level data, the nation would lose the information it needs to respond quickly and responsibly to energy emergencies, most of which occur locally or regionally.

When President Reagan issued an Executive order to decontrol oil prices, he directed the Secretary of Energy to get rid of all unnecessary reporting burden on the oil industry. The administrator of EIA at that time determined that there was no statutory requirement that EIA collect state level data. Anticipating the possible loss of oil product price, volume, and consumption data former Congressman Railsback (R-IL) introduced language requiring EIA to continue to collect the data, arguing that without adequate information, elected officials would inevitably make hasty and ill-informed decisions during an energy crisis. Since that time, EIA's state level data has calmed oil product markets many times, preventing even greater volatility in a market that experiences rapid price swings. Mr. Chairman, as you know energy is essential for

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