ACEEE TESTIMONY

TESTIMONY OF HOWARD GELLER, EXECUTIVE DIRECTOR
THE AMERICAN COUNCIL FOR AN ENERGY-EFFICIENT ECONOMY

BEFORE THE SUBCOMMITTEE ON INTERIOR AND RELATED AGENCIES, COMMITTEE ON APPROPRIATIONS, U.S. HOUSE OF REPRESENTATIVES

ON THE DEPARTMENT OF ENERGY'S ENERGY EFFICIENCY PROGRAMS

April 6, 2000

The American Council for an Energy-Efficient Economy (ACEEE) is a non-profit organization dedicated to advancing technologies, programs and policies that improve energy efficiency. We appreciate the opportunity to appear before the Subcommittee once again.

The Administration is proposing to increase funding for energy efficiency programs in FY2001 to $850 million, compared to actual funding of $745 million in FY2000 (excluding the biomass gasification project where funds are directed to the fossil energy office). While we realize that funding for discretionary programs is very tight, we urge the Subcommittee and the Congress to find ways to fully fund the Administration's FY2001 request for energy efficiency programs. Doing so will benefit consumers, businesses, national security, and the environment.

In our comments below, we: 1) highlight some of the recent advances made by DOE; 2) comment briefly on the rationale for increasing energy efficiency funding; and 3) identify programs within DOE's budget request which are of high priority in our view.

DOE's Energy Efficiency Programs are a Success

DOE has a proven record of helping to turn engineering concepts into viable energy efficiency technologies, and then helping to overcome the barriers inhibiting the adoption of innovative technologies in the marketplace. DOE previously documented savings of $28 billion from just five technologies it helped develop during the 1970s and 80s. These savings alone exceed the entire energy efficiency and renewable energy research and development budget over the past 25 years.¹ This evaluation has withstood the careful scrutiny of the GAO.

DOE is now completing a new study highlighting many of its accomplishments during the 1990s.² I understand that this report will present 20 new "success stories"-- projects and programs that have already saved the nation 5.5 quadrillion BTUs of energy, equivalent to the energy consumed by all consumers and businesses in the state of Ohio for about 15 months. The technologies and related activities highlighted in this new DOE report include:

• ozone-safe refrigerants that are helping appliance manufacturers meet dual regulatory challenges--phase-out of CFCs under the Montreal Protocol and new energy efficiency standards;
  
  
• new types of compact fluorescent light fixtures that are replacing wasteful and unsafe halogen torchiere fixtures;
  
  
• spectrally selective window coatings that are increasing the energy efficiency of windows in warmer parts of the country;
  
  
• new diesel engine technologies that are both cleaner and more efficient than conventional engine designs;
  
  
• new ways of using aluminum and other lightweight materials in new vehicles;
  
  
• new oxygen-fueled glass furnace technologies that cut energy use and pollutant emissions from glass manufacturing and now account for about 30 percent of U.S. glass production;
  
  
• support for improvements in building codes in numerous states, thereby saving consumers over $1 billion as of 1998;
  
  
• technical assistance, training, and software support that has helped thousands of companies increase the efficiency of their motor systems through the Motor Challenge program; and
  
  
• the Clean Cities program that saved about 130 million gallons of gasoline and diesel fuel in 1998 alone.
  

DOE indicates that the 20 technologies and activities featured in this soon-to-be-released report have already saved the nation about $30 billion through lower energy bills, with the benefits continuing to accumulate year-after-year as the adoption and use of these technologies grows. The cost to taxpayers for these 20 activities over the past decade was $712 million, less than 3 percent of the energy bill savings. In fact, the energy bill savings from these 20 technologies and activities alone is over three times the amount of money appropriated by the Congress for all DOE energy efficiency and renewable energy programs during the 1990s, demonstrating once again that federal support for energy efficiency R&D and deployment is a very sound investment.

Why Should the Congress Increase Energy Efficiency Funding?

Increasing funding for DOE's energy efficiency programs will help to maintain robust economic growth in the United States, will help limit costly oil imports, and will cut pollution of all types. As pointed out in the 1997 PCAST report, "R&D investments in energy efficiency are the most cost-effective way to simultaneously reduce the risks of climate change, oil import interruption, and local air pollution, and to improve the productivity of the economy."³ DOE's R&D and deployment programs reduce consumer and business energy expenses, freeing up funds that can be spent on other goods and services. This keeps money in the local economy and leads to a net increase in employment. Developing new types of heat pumps, light sources, fuel cells, vehicles, industrial process improvements, etc. helps U.S. businesses increase their productivity and maintain their leadership in highly competitive global markets.

The recent run-up in oil prices is costing Americans dearly–we are now sending an additional $50 billion per year to foreign oil producers, or about $500 per household per year, with gasoline costing about $1.57 per gallon on average instead of the $1.00 or so per gallon being paid a short time ago. The oil price run-up is due in no small part to the 1.8 million barrels per day growth in consumption of gasoline and diesel fuel in the United States during the past decade. Improving the fuel economy of new vehicles, through activities like R&D on hybrid vehicles, fuel cells, and more efficient heavy vehicles, could cut our dependence on oil imports, enhance national security, and reduce our trade deficit. R&D and promotion of more efficient and alternative fuel vehicles also address the root of the problem–unchecked growth in oil consumption– unlike other proposals such as rolling back the gasoline tax or marketing oil from the Strategic Petroleum Reserve.

Energy production and use accounts for the large majority of emissions of many air pollutants including carbon dioxide, sulfur dioxide, and NOx. Energy efficiency improvements reduce energy use, thereby cutting all types of air pollutant emissions. Consequently, energy efficiency improvements improve public health, save lives, and reduce damage to crops, forests, and other ecosystems. And energy efficiency improvements will cut emissions of CO₂ and other greenhouse gases, thereby slowing global warming while saving consumers money.

In spite of impressive efficiency gains in the past two decades, there remains enormous potential for further cost-effective efficiency improvements throughout the U.S. economy. Consequently, the PCAST panel recommended doubling DOE's energy efficiency R&D funding between FY1998 and FY2003, and estimated that this investment could produce a 40 to 1 return for the nation. The $105 million increase proposed by the Administration in FY2001 represents a modest and prudent step in this direction.

High Priority Programs Within DOE's Energy Efficiency Budget

Based on our initial review of DOE's FY2001 budget request, we have identified several programs where an increase in funding is particularly important in our view.

1. Lighting and Appliance Standards - DOE requested a $3.3 million increase in the core lighting and appliance standards program. Appliance standards provide huge benefits for consumers and the nation. Additional funding is needed to complete priority rulemakings on water heaters, clothes washers, and air conditioners, as well as move forward on transformers and commercial heating and cooling equipment.
   
   
2. Energy Star Program - DOE proposed a $2.8 million increase in the core Energy Star program. This program is playing a valuable role in educating consumers and overcoming barriers to the adoption of new technologies, some of which DOE helped to develop. Additional funding is needed to cover a wider range of products and increase promotion efforts.
   
   
3. Industries of the Future (specific) - DOE proposed a $17.9 million increase in the overall "Industries of the Future - specific" area. The increases are primarily for expanding activities with the paper and pulp and agricultural sectors, where there are many promising technologies for saving energy, providing new products, and cutting waste and pollution.
   
   
4. Industrial Enabling Technologies - DOE has not requested an increase in this area, but has asked that the new biomass gasification project be kept in EERE. It is our understanding that the fossil energy office does not want this project in their budget. Furthermore, it makes sense to leave it in EERE considering the strong link to the forest products, chemicals, and other OIT partner industries.
   
   
5. Transport Fuel Cell R&D - DOE has proposed increasing fuel cell-related R&D for transport by $4.5 million. Fuel cells have the potential to greatly reduce vehicle energy use and emissions, and DOE is funding critical enabling technology and fuel cell systems R&D.
   
   
6. Transport Technology Deployment - DOE has proposed increasing various deployment-related programs by $4.2 million. These programs are critical for evaluating and promoting innovative alternative fuel and energy-efficient vehicles in order to reduce oil imports and cut air pollution.
   
   
7. Federal Energy Management Program - DOE has requested an additional $2.8 million for technical assistance and guidance to other federal agencies. Use of performance contracting is rapidly growing under the new super ESPC contracting mechanism and FEMP Executive Order, but FEMP needs a modest funding increase in order to adequately serve and support other agencies.
   
   
8. International Clean Energy Initiative - DOE has requested funding for international technology and policy cooperation in a variety of areas – appliance standards, Energy Star, and industrial Best Practices and technical assistance, to name a few. This International Clean Energy Initiative will help developing countries adopt state-of-the-art technologies and policies, and thereby expand global markets for U.S. technologies, support economic and social development in poorer nations, and enhance the global environment. On a personal level, I have spent five years living in and working on energy efficiency in Brazil, India, and Africa. These countries value U.S. leadership and support, particularly related to transfer of state-of-the-art technologies and policies. We are a rich nation and we are getting richer. We should be able to find $46 million per year for this worthy cause ($46 million is the total amount of the International Clean Energy Initiative across all portions of the DOE budget).
   

This concludes my testimony. Thank you for considering these views.

¹ Office of Energy Efficiency and Renewable Energy, "Selected Energy Efficiency Technology Successes: Based on GAO Comments and Analysis," DOE, Feb. 1997.

² "Clean Energy Partnerships: A Decade of Success." DOE/EE-0213. Office of Energy Efficiency and Renewable Energy, U.S. Department of Energy, Washington, DC. Forthcoming.

³ President's Committee of Advisors on Science and Technology, Panel on Energy Research and Development, "Federal Energy Research and Development for the Challenges of the Twenty-First Century," Executive Office of the President, Nov. 1997.