I also have questions, but I think I will save them for the appropriate time this morning, and just use this opportunity to welcome you here, and note that in addition to being on this committee, I also chair the Energy and Minerals Subcommittee over at Natural Resources, so we will have lots of opportunities to talk on matters of policy, and I really look forward to working closely with you. Thank you for coming. Mr. SHARP. The Chair recognizes the distinguished gentleman from Connecticut, Mr. Franks. Mr. FRANKS. Thank you, Mr. Chairman. I, too, would like to welcome the new Secretary of Energy. This is my second time in which I have had a chance to meet you formally, the first time was at the Congressional Black Caucus Meeting. As you know, at that time I had posed a couple of questions, and you are working on giving me the answers to those questions, and I look forward to hearing those replies. I also would like to mention to you that I am also a member of the Health and the Environment Subcommittee, and I will have to depart somewhat early today, but I will have some additional questions that I would like to include in the record, Mr. Chairman, if that is permissible. Mr. SHARP. It will certainly be a part of our record. The Chair recognizes the distinguished gentleman from Louisiana, Mr. Tauzin. Mr. TAUZIN. I thank the Chair. Let me take this opportunity to formally welcome you, Madam Secretary, to our committee and to express my deep pleasure and appreciation at your appointment and your interest in issues so close to this committee and to this member in particular. I'm looking over your testimony and I see again your renewed commitment to alternative fuel vehicles for American and for the Federal fleet, for R&D, and natural gas technology, and I almost heave a sigh of relief. We finally have an administration and a Secretary in Energy committed to doing things that this committee has been so actively pursuing for many years with the past administrations and an administration that doesn't want to see the repeal, the abolition of the Department of Energy instead is putting it to work to do some good for the country. I don't want to miss the chance to make a couple of quick points for you. One is I saw your interest in carrying out the low income weatherization activities for the country. I would love to draw your attention to the concerns in the South that the weatherization formulas are still outdated. They still fail to account for the fact that people are dying in Florida and Texas and Louisiana from heat prostration because they can't afford weatherization and yet the formula tends to forget them and simply take care of folks who are suffering from the cold in other parts of the country. Sooner or later, we need to revisit those formulas to take care of poor people who live in the hotter climates of our country. I notice your point about slowing down the fill rate of the Strategic Petroleum Reserve, and I would urge you to reconsider that, as our dependence on foreign oil continues to grow and as the incentives for domestic production have been abolished over the last decade, we either have to reinstall some great incentives for people to begin producing here at home or we had better fill that Strategic Petroleum Reserve and utilize it properly for our country's sake. I want to point out to you that some of the work of this committee in the past has been to instruct the Department of Energy to look at leasing facilities, which are abundantly available in our region, to enhance the capacity of the Strategic Petroleum Reserve at much lower cost than the current program implies, in fact utilizing already built facilities that are connected to the cap line at the Superport, Clovelli Farms salt domes. Points like that, and other points where we come together and we can work together in the future, are going to engage us I think in future meetings, but I wanted to bring them to your attention now and to welcome you and to pledge to you our every effort to work with you and your Department in seeing to it that the Department of Energy's goals as you outlined them so well in your statement are not only carried out but expeditiously carried out. I looked at the maps you provided or the committee provided. I guess they are DOE maps relative to Secretary O'LEARY. They belong to us. Mr. TAUZIN [continuing]. Relative to refueling stations and vehicles in service, and I must admit ashamedly that 57 vehicles in Louisiana is not nearly where we ought to be. With your help perhaps we can get that number up significantly. I'd point out lastly that in the maps where you show refueling stations, 497 total natural gas refueling sites in America, we could make that millions of sites, as soon as the Department of Energy assists in developing a home refueling system that is affordable for consumers all over this country who have natural gas in their homes, and that ought to be I think a prime goal and objective of the R&D development of the Energy Department. Those are just some thoughts and some quick reflections that I wanted to share with you this morning. I look forward to your testimony and, more importantly, I look forward to your service for this country in this very important capacity which you have been privileged to attain and to work with for this country. Hazel, thank you for our friendship and for your dedication to this important area of the country's work. Mr. SHARP. The time of the gentleman has expired. The gentleman from Florida, Mr. Stearns, is recognized. Mr. STEARNS. Thank you, Mr. Chairman, and also with my colleagues I would like to welcome the Secretary this morning. I also look forward to working with her to develop sound energy policies for this country, our Nation, but I think like many of my colleagues on this side of the aisle, we are concerned with the negative effects of the proposed Btu tax we think obviously that undo a lot of good policies and will affect some of the policies that are now being proposed by the Department of Energy. In your testimony you state that the purpose of this broad-based energy tax is to reduce the deficit, increase efficiency, and improve environmental quality. I and many others are concerned on this committee that we need to look how the imposition of this tax will affect American consumers and industry. I'm extremely worried that it will hit lower income and middle class individuals. In my district-I have central Florida that runs from the tip of Orlando to Jacksonville, west of Jacksonville-and I have a lot of older Americans, so I think these folks would be affected tremendously. My hometown of Ocala, if you have ever been there in the summer, the air gets as hot as 165 degrees, and so air conditioning is needed, and I am concerned that the Btu tax wil! make it more expensive for these individuals. I think we can all reasonably agree that when we raise the cost of any product we make it less readily available to less affluent Americans and when we increase the cost of production we make our businesses less competitive. While President Clinton has pledged to provide some special interest breaks and exemptions from the energy tax, the overall effect will still be in my opinion a massive income transfer from the private sector to the Government. I personally do not see how this can benefit the average American and I hope you will use your position as Secretary of Energy to lobby President Clinton on behalf of American workers, businesses and consumers. Thank you, Mr. Chairman. Mr. SHARP. The Chair now recognizes the distinguished gentlelady from Arkansas, Ms. Lambert. Ms. LAMBERT. Thank you, Mr. Chairman, and thank you for your expeditious bringing together of this hearing and we are certainly appreciative of Secretary O'Leary and her being here. I would certainly like to express my concerns as well as my support in the way that the administration's energy policy is being conducted and being brought to light. I would like to express a few of my concerns in light of where I come from. Arkansas is a predominantly rural State. We do have a tremendously diverse source of energies from all different kinds of sources-we have a lot of chickens too. Alternative fuels is a big issue for us with our farmers. We have a tremendously large agricultural industry. The energy tax I have definitely got some big concerns, a little heartburn over, and would certainly like to see that we could work through that to make sure that there is not an enormous or overwhelming burden placed on one type of group, especially from the rural communities. We don't want to make a disincentive for work and other things as well as eliminating our farm economy in rural America. I think it is going to be critical for us to take a really close look at that energy tax for those purposes and rural needs in general that are affected by energy-bringing industry in, jobs as was mentioned earlier was a big issue for us in rural America, and we would like to see some incentives to see jobs come into these areas. Really the top three issues that industries place when they are looking at areas are health care, education systems, and the cost of energy, and we would certainly like to work with you. We are looking forward to seeing the implementation and enforcement of some of the tremendous energy issues that were brought up last year and the past several years in the energy pol icy and overall just are glad that we have got you to work with and we are looking forward to it. Thank you. Mr. SHARP. Madam Secretary, I believe that we are ready to hear from you at this point. As you know, Congressional hearing means first hearing from Congress, and we pride ourselves that we are somewhat more efficient than the other body on that score, so we'll be very pleased to have your testimony now. STATEMENT OF HON. HAZEL R. O'LEARY, SECRETARY, DEPARTMENT OF ENERGY Secretary O'LEARY. Mr. Chairman and members of the committee, thank you for the opportunity to present the Department of Energy's budget today. I will spare you the opportunity to listen to me read the formal testimony, which has been prepared by me and many of the members of my staff who you see with me, and simply ask that it be admitted to the record. I would like to make a few comments. Mr. SHARP. Without objection. Secretary O'LEARY. I would first like to introduce Ms. Betty Smedley, who is the Chief Financial Officer of the Department. In a moment of lucidity, I decided that it would be better to have her sit next to me because, while they may trust me with the numbers, I know better than to trust me completely. So, I will rely on her for details if they get to be very intricate. I, first of all, want to express to this subcommittee particularly, my desire to work with you and work with you in a very close way. I am well aware of the history of this committee, as the chairman has so eloquently pointed out. I have enjoyed many occasions to appear before you and, just in the past few years, enjoyed the opportunity to work with you as you have worked on your portion of the National Energy Policy Act. So, I am pleased with the opportunity to increase the time that we spend together discussing policy and, perhaps more importantly, reviewing progress that this Department makes in terms of implementing your policy. I have brought with me not merely the charts, which I want to discuss later. The other thing we brought, and sort of beat the calendar, are copies of our Implementation Status Report on the Energy Policy Act of 1992. I would point out to you by way of currying favor that it is early, as it was due by the end of this month. I will use that as the opportunity to tell you that it is my goal to do as well with my mail, as I understand that for a few of you I have mail that is outstanding. I am shocked and appalled to note that to one of the members of the subcommittee I have mail that was due in 1992. We are fixing that. I do want to move very briefly to the charts, that Mr. Tauzin has described, and tell you why I brought them with me and have shared them with this committee. We can submit a budget in support of implementation of policy, but the important thing is not simply how much money we have and whether we put it on the streets in a timely fashion ensuring that it is spent wisely and there is no fraud and abuse, but in my view what Government needs to deliver to the people are measurable results. In terms of providing these figures, as has been point ed out, I am hoping to establish a baseline with respect to some of the programs that we will be implementing this year, so that we can together measure the progress that the Department makes in meeting our goals for energy efficiency and finally stimulating the marketplace in alternative fuels, and certainly for natural gas. The chairman has, in point of fact, given my opening comments, for which I thank him. I would like just briefly to say that when I was preparing, a couple of weeks ago, my discussion and introduction of this budget to the press, we came up with a very dramatic graph which gives real meaning to the shifting priorities in this administration and in the Government. You have all pointed them out, but just a quick review will show you an increase in energy efficiency of 34 percent against the budget which had been proposed by the prior administration. As has been mentioned, an 18 percent increase in our environmental restoration and waste management work, and an increase in natural gas, and then this very dramatic 75 percent increase in alternative vehicles. Of course, you'll see in tech transfer almost as dramatic an increase of 68 percent. In energy research, getting to some of the issues about science and its balance, an 18 percent increase there, some of which represent the superconducting Super Collider. Finally, the dramatic changes in defense programs, with a reduction of 19 percent, and in nuclear R&D, with a reduction of 45 percent. I don't expect that we have pleased everybody with these shifting priorities, but they were the priorities on which our administration ran for office and captured it. So, we go forward with the spirit that we can be working together on how to implement the policy. My last comment has to do with the Btu tax. I plead guilty. Yes, indeed, I did play a very vital role in not only establishing the policy for the framework of that tax but working on its implementation details. I wouldn't like to stand away from that. I've got to stand up to it. I mean it's my work and it's Treasury's work. It is after all an energy tax, so I own it and I am pleased to respond to questions with respect to point of collection or any of the other questions that you might ask. I am proud of this budget. It does not answer all questions, nor serve all interests, but I believe it is as balanced a budget in view of our priorities as could possibly be presented. I am now pleased to respond to questions. [Testimony resumes on p. 46.] [The prepared statement of Secretary O'Leary and the charts referred to follow:] |