gone. That is a 50-50 call from what I can tell as a lawyer. The could very well do that.

On the other hand, Congress is sitting now saying: One way t overturn deferral, we do not even see the deferral act. It is for bot Houses of Congress to pass a joint resolution overturning the defe ral.

But it is clear from the language of the Chadha case that that a bill, that is equivalent to a bill that would have to be signed b the President in order to be effective. So you are pretty safe fo now in assuming they are gone, because we cannot get them bac on without something that is passed by both Houses and signed And we are in an interesting bind because to the extent we woul like to send all that up to the President, if we pick and choose, assume we will agree with you on half and not on the other hal

We have to put that in some kind of appropriation measure. An we are bound by the ceilings that we now have under Gramm Rudman-Hollings and we have to find some other savings; so w are caught in that kind of a bind.

So I think that is the current status of things. Why did it no happen earlier with Chadha having been in existence for, what, 20 some months? About how old is Chadha; 2 years? I think th reason we did not have the problem was that this was clearly un derstood by the administration last year as being a very unsavory to use a mild word, situation fraught with danger on all sides and consequently, deferrals were used very sparingly by agreemen with then-OBM Director Stockman and the appropriators on both sides.

I am not now suggesting that they are being used unsparingly. I would appear to me that they are, but I have not looked at th whole package. Maybe this is still sparingly and with some kind o consideration for the fact that Congress is in this intermediary bind under the law.

In any event, that is about where we are. I have just two ques tions. I am kind of intrigued that sometime after the deferrals $38.5 million of deferrals were changed into rescissions. I assume you are aware of that?

Miss FITZPATRICK. Yes, Mr. Chairman.

Senator DOMENICI. That is the National Center for Chemical Re search, Columbia University; Demonstration Centers for Informa tion Technology, Brown University; Advanced Science Center, Uni versity of Oregon; Energy and Mineral Research Center, University of Alabama; et cetera.

Do you have any information as to why these achieve such an instant sort of exceptional status among university programs Madam Secretary?

Miss FITZPATRICK. Mr. Chairman, those items are not in my budget, so I was not involved in any of the discussions on them.

I am glad you do not have to discuss it. Frankly, you are too nice to beat up on. [Laughter.]

Senator DOMENICI. I assume that you have looked into that poor little New Mexico University, one which did not receive such high status, the Southwestern Residential Demonstration Program? At least I gave you a little advance notice on that. I do not imagine you are able to compare its validity in the spectrum of things with

this 38.5. So maybe you could just tell me why it was deferred and not granted some other status.

Miss FITZPATRICK. Mr. Chairman, that is a photovoltaic residential experiment station.

Senator DOMENICI. Yes.

Miss FITZPATRICK. It is one of several around the country that have been maintained for several years. We have felt for some time that they have served their purpose very nicely. The private sector is now picking up on such systems, not just experimentation but actual installation and it is time to phase those out.

Senator DOMENICI. Do you think you might have, in the generosity of your heart, found that since it was judged the best in the country that you might have rescinded it and thus we could have kept it?

You could have, but you did not; is that the answer?

Miss FITZPATRICK. I was not allowed to have very much kindness this year, Mr. Chairman.

Senator DOMENICI. I see. Right.

I asked you about one other thing I think the last time you were before the Appropriations Committee. Congress appropriated $2 million additional for expanded effort in electrochemical research for fuel cells. You are not going to do that. Do you know why?

Miss FITZPATRICK. I am informed that we are doing that, Mr. Chairman.

Senator DOMENICI. You are? Was I mistaken, and you have changed your mind? Or was that never going to be terminated?

Miss FITZPATRICK. I do not think that we had planned to terminate that, Mr. Chairman. I do not think it was included in the deferrals.

Senator DOMENICI. We will not say you changed your mind. We were misinformed.

Senator Hecht, did you have any questions?

Senator HECHT. Thank you, Mr. Chairman.

First of all, I have an opening statement. I am sorry. I was detained on getting here.

Senator DOMENICI. Do you want to give it or make it part of the record?

Senator HECHT. We will just make it part of the record.

Senator DOMENICI. It will be made a part of the record.

Senator HECHT. Unless you want to hear a good speech. [Laughter.]

[The prepared statement of Senator Hecht follows:]

STATEMENT OF HON. CHIC HECHT, A U.S. SENATOR FROM THE STATE OF NEVADA

Mr. Chairman, I wish to commend the subcommittee for holding this hearing today on what I believe is a very important matter-the budgets for the solar, geothermal and conservation programs of the Department of Energy.

In these days of huge federal budget deficits, we must of course closely examine all federal programs for ways to cut expenses. Right now, with the price of oil so dramatically lower than just a few weeks ago, it may be tempting for us to cut the budgets of solar, geothermal and conservation programs.

However, I hope we all realize the price of oil will eventually rise again, perhaps sooner then many people think. We cannot count on cheap oil, and we cannot count on imported oil if we are to protect our national security. In the long run, we will need the type of safe, clean renewable domestic energy resources provided by solar, geothermal, and conservation.

As the Congress considers the President's budget for renewable energy, I hope w will all realize that promoting this type of domestic energy resource serves a nation al defense purpose, as well as a longterm economic purpose.

In this context, I am particularly concerned that we not jeopardize our future na tional energy security by cutting too deeply into the budgets of these programs, jus because the short term outlook for oil prices seems reassuring.

Thank you, Mr. Chairman.

Senator HECHT. One fast question for Secretary Fitzpatrick.

The budget request for geothermal energy eliminates one activity and includes deep cuts in two activities. However, there is a small increase in program direction. What is program direction and why is it getting increased when the other geothermal activities will re ceive deep cuts?

Miss FITZPATRICK. The program direction is a line item for people; it is a case for staffing. I would like to provide for the record the explanation for the increase.

Senator HECHT. Please do, and I would like to hear from you. [The information follows:]

GEOTHERMAL PROGRAM DIRECTION

As a result of reductions in geothermal program activities, the geothermal staff ing was reduced by three Full-Time-Equivalents (FTEs) in FY 1987; however, the FTE funding requirements were repriced to be more consistent with actual funding needs. This resulted in an increase in program direction dollars even though the actual number of FTEs decreased by three.

Miss FITZPATRICK. Thank you.

Senator HECHT. Thank you very much.

Senator EVANS [presiding]. I could not let this opportunity pass without asking one more question about energy and conservation. Well, first, do you feel that the current plunge in oil prices and the free flow of oil that is now occurring is likely to continue over any extended period of time?

Miss FITZPATRICK. If I knew-Senator, I am very often asked to predict what the price of oil will be and-▬

Senator EVANS. Let me put it this way: Do you think it would be useful for us at this time while there is apparently an abundance of oil at very low prices to prepare for the potential of a oil shortage and getting ready for higher prices?

Miss FITZPATRICK. I do because I think that what the Federal Government has to do is to think of the long term: 5, 10, 15, 20 years. I notice the chairman very correctly observed that we as a country often act on a very short-term basis and have a short attention span, and I think it is the role of the Federal Government to have the long term in view.

I

Certainly over the long term oil prices will have to go back up. do not think we should be deterred from our basic goals by what is necessarily a blip on the oil prices.

Senator EVANS. If I remember general figures, at least, we are headed in a direction where the amount of imported oil to the United States is now heading back up again from a decline that we saw for the last several years and that it is expected to be several times the current level within relatively few years, the amount of imported oil, and that currently I think something close to twothirds of the known world reserves of oil are either under Commu

nist or OPEC countries. Are those essentially accurate facts, as far as you understand them?

Miss FITZPATRICK. Yes.

Senator EVANS. That being the case, it would not take much disruption or collective decisionmaking at a time when it could count for both oil prices to shoot up and potentially for us to get into a severe shortage of oil. Is that also a very real potential?

Miss FITZPATRICK. Yes, Senator. I think the potential is certainly there.

Senator EVANS. With all that, do you think it's wise for the Federal Government to lower the fuel efficiency standards that were placed on automobiles 10 years ago?

Miss FITZPATRICK. There is a great deal of debate about how effective those fuel efficiency standards have been as standards. That is, would the market have done that anyway? Is there more drag on the market by imposing the regulations or not? I think it is a highly debatable issue and I am glad that I did not have to make the decision. That is the responsibility of the Department of Transportation.

I think that again the transportation market, in particular automobiles, is one of the markets that is susceptible to short-term changes or expected changes in oil prices. It is also susceptible to being turned around very rapidly, in case it is necessary to do so. Senator EVANS. Turn it around very fast in what way?

Miss FITZPATRICK. As an example, we saw how quickly we had a swing toward the demand for more efficient automobiles in the mid-1970's when the prices went up.

Senator EVANS. We had the demand for more fuel-efficient automobiles and we did not have them.

Miss FITZPATRICK. That is true, and it was very vulnerable to foreign competition. I think what has happened is that the U.S. auto makers certainly know how to make fuel-efficient cars and they make fuel-efficient cars, but their product mix right now is responding to a demand that is pushing a bit toward the less fuelefficient cars. But at least they have the tooling and the capacity to make more efficient cars and to change their mix rather rapidly. Senator EVANS. You would say that most of those really fuel-efficient cars that are in the American automobile mix are made overSeas?

Miss FITZPATRICK. I do not know the answer to that, Senator.

Senator HECHT. Would you submit for the record what I asked you to before and would you also put in your reason for cuts in the program on geothermal?

Miss FITZPATRICK. On the geothermal program, yes I will, Sena

tor.

[The information follows:]

REDUCTIONS IN THE GEOTHermal Program

The geothermal energy program has been reduced in part by the orderly conclusion of a number of large engineering development projects initiated in prior years. The technical progress of the geothermal program has been paralleled by an increasing confidence in and commitment to geothermal technology by the private ector. This commitment and confidence is reflected in the development of a group of many small businesses and the creation of sizable divisions of large companies. Ctilities, institutions, and states have become increasingly involved with promoting

and conducting research and development programs to further advance geotherm technology. Federal funding has been reduced in those areas where considerable i terest has been shown by nongovernment entities. Federal dollars have been focus on the highest priority research to address the most critical technology base issu which have the greatest relevance and potential for future private sector develo ment.

Senator HECHT. Thank you.

Senator DOMENICI [presiding]. Senator Evans, might you perm me to first thank you for agreeing to continue these hearings. W are obviously about to finish with the Department's witnesses an then we will have the non-Department witnesses.

I want to thank them for coming. I want to assure you that Sena tor Evans will take your testimony and we will obviously pay a tention to your concerns as best we can. I thank you all very muc for being patient.

And to the two secretaries who are here, thank you very much You do a marvelous job under very adverse circumstances, and w try to do the same.

Miss FITZPATRICK. Thank you, Mr. Chairman.

Mr. BAUER. Thank you, Mr. Chairman.

Senator EVANS [presiding]. Thank you.

I think we will have some other questions; I know some othe Senators will, as well. And to perhaps both of you and we would b delighted to have the answers.

Our next panel is Dr. Lloyd Lawrence, vice president, Mechani cal Technology, Inc.; Dr. Stuart Ridgeway, R&D Associates-Dr Lawrence was from New York; Dr. Ridgeway is from Marina de Ray, CA; and Mr. Vladimir Bazjanac, from Berkeley, CA. If you three would please come to the podium.

Welcome, gentlemen, to the committee. Mr. Lawrence, you are first on the list. If each of you would summarize your testimony, will say at this time that the full testimony of each of you will be included in the record.

STATEMENT OF DR. L.R. LAWRENCE, JR., VICE PRESIDENT, TECHNOLOGY DEVELOPMENT, MECHANICAL TECHNOLOGY, Dr. LLOYD LAWRENCE. Thank you, Mr. Chairman.

INC.

I am Bob Lawrence, and I am vice president of technology devel opment with MTI. We are a $60 million corporation and we have firm of about 850 people specializing in high technology products and services.

I am here today to discuss the need for a strengthened DOE con servation technology budget, especially in the areas of gas-fired heat pumps, industrial R&D, and Stirling engines. I would like to point out to maybe amplify on the thoughts of Congresswoman Schneider earlier today that these things are not only just energy conserving technologies but, in fact, they provide a commercial technology base that will aid our country in our international com petitiveness.

I have quoted in my testimony some of the results from the President's Commission on Industrial Competitiveness, and in fact was taken directly from their final report entitled "Global Compe tition: The New Reality." The technologies, then, from the conser vation budget apply directly to the kinds of recommendations that