<DOC>
[106th Congress House Hearings]
[From the U.S. Government Printing Office via GPO Access]
[DOCID: f:64064.wais]
THE NATIONAL OILHEAT RESEARCH ALLIANCE ACT OF 1999
=======================================================================
HEARING
before the
SUBCOMMITTEE ON ENERGY AND POWER
of the
COMMITTEE ON COMMERCE
HOUSE OF REPRESENTATIVES
ONE HUNDRED SIXTH CONGRESS
SECOND SESSION
on
H.R. 380
__________
APRIL 5, 2000
__________
Serial No. 106-133
__________
Printed for the use of the Committee on Commerce
U.S. GOVERNMENT PRINTING OFFICE
64-064CC WASHINGTON : 2000
COMMITTEE ON COMMERCE
TOM BLILEY, Virginia, Chairman
W.J. ``BILLY'' TAUZIN, Louisiana JOHN D. DINGELL, Michigan
MICHAEL G. OXLEY, Ohio HENRY A. WAXMAN, California
MICHAEL BILIRAKIS, Florida EDWARD J. MARKEY, Massachusetts
JOE BARTON, Texas RALPH M. HALL, Texas
FRED UPTON, Michigan RICK BOUCHER, Virginia
CLIFF STEARNS, Florida EDOLPHUS TOWNS, New York
PAUL E. GILLMOR, Ohio FRANK PALLONE, Jr., New Jersey
Vice Chairman SHERROD BROWN, Ohio
JAMES C. GREENWOOD, Pennsylvania BART GORDON, Tennessee
CHRISTOPHER COX, California PETER DEUTSCH, Florida
NATHAN DEAL, Georgia BOBBY L. RUSH, Illinois
STEVE LARGENT, Oklahoma ANNA G. ESHOO, California
RICHARD BURR, North Carolina RON KLINK, Pennsylvania
BRIAN P. BILBRAY, California BART STUPAK, Michigan
ED WHITFIELD, Kentucky ELIOT L. ENGEL, New York
GREG GANSKE, Iowa TOM SAWYER, Ohio
CHARLIE NORWOOD, Georgia ALBERT R. WYNN, Maryland
TOM A. COBURN, Oklahoma GENE GREEN, Texas
RICK LAZIO, New York KAREN McCARTHY, Missouri
BARBARA CUBIN, Wyoming TED STRICKLAND, Ohio
JAMES E. ROGAN, California DIANA DeGETTE, Colorado
JOHN SHIMKUS, Illinois THOMAS M. BARRETT, Wisconsin
BILL LUTHER, Minnesota
LOIS CAPPS, California
James E. Derderian, Chief of Staff
James D. Barnette, General Counsel
Reid P.F. Stuntz, Minority Staff Director and Chief Counsel
______
Subcommittee on Energy and Power
JOE BARTON, Texas, Chairman
MICHAEL BILIRAKIS, Florida RICK BOUCHER, Virginia
CLIFF STEARNS, Florida KAREN McCARTHY, Missouri
Vice Chairman TOM SAWYER, Ohio
STEVE LARGENT, Oklahoma EDWARD J. MARKEY, Massachusetts
RICHARD BURR, North Carolina RALPH M. HALL, Texas
ED WHITFIELD, Kentucky FRANK PALLONE, Jr., New Jersey
CHARLIE NORWOOD, Georgia SHERROD BROWN, Ohio
TOM A. COBURN, Oklahoma BART GORDON, Tennessee
JAMES E. ROGAN, California BOBBY L. RUSH, Illinois
JOHN SHIMKUS, Illinois ALBERT R. WYNN, Maryland
HEATHER WILSON, New Mexico TED STRICKLAND, Ohio
JOHN B. SHADEGG, Arizona PETER DEUTSCH, Florida
CHARLES W. ``CHIP'' PICKERING, RON KLINK, Pennsylvania
Mississippi JOHN D. DINGELL, Michigan,
VITO FOSSELLA, New York (Ex Officio)
ED BRYANT, Tennessee
ROBERT L. EHRLICH, Jr., Maryland
TOM BLILEY, Virginia,
(Ex Officio)
(ii)
C O N T E N T S
__________
Page
Testimony of:
Allen, Don, President, E.T. Lawson and Sons.................. 3
Woosnam, Douglas, Director of Public Affairs, Allenergy
Marketing Company, LLC..................................... 6
(iii)
THE NATIONAL OILHEAT RESEARCH ALLIANCE ACT OF 1999
----------
WEDNESDAY, APRIL 5, 2000
House of Representatives,
Committee on Commerce,
Subcommittee on Energy and Power,
Washington, DC.
The subcommittee met, pursuant to notice, at 11:30 a.m., in
room 2322, Rayburn House Office Building, Hon. Joe Barton
(chairman) presiding.
Members present: Representatives Barton, Shimkus, Wilson,
Bryant, Ehrlich, McCarthy, Sawyer, Markey, Boucher, Pallone,
Wynn, and Strickland.
Staff present: Cathy Van Way, majority counsel; Jason
Bentley, majority counsel; Elizabeth Brennan, legislative
clerk; Sue Sheridan, minority counsel; and Rick Kessler,
professional staff member.
Mr. Barton. The subcommittee will come to order on the next
hearing as soon as we get our witnesses in attendance. Members
are strongly urged to stay for the next hearing.
If we could, if, Mr. Ehrlich and Mr. Shimkus, if y'all wish
to converse with our past panel, if you will leave the hearing
room so we can start this hearing.
Today we are going to hold a legislative hearing on H.R.
380, the National Oilheat Research Alliance Act, introduced on
January 19, 1999, by Congressman Greenwood of Pennsylvania, a
member of the full committee, not a member of the subcommittee.
I want to welcome our two panelists to the hearing on this
legislation.
This bill, as introduced by Mr. Greenwood, would allow the
heating oil industry to establish an oilheat check-off fee to
fund research, development and consumer education programs
related to heating oil. As was brought home to Members of
Congress this past winter, heating oil plays an important role
in keeping homes and businesses warm in the winter in many
parts of the country, especially in the Northeast.
The purpose of the legislation before the subcommittee
would be to give this industry greater resources to undertake
research and development activities targeted at finding new and
more efficient ways to use heating oil. Significantly, the bill
which was proposed by the oilheat industry does not require the
expenditure of significant amounts of Federal dollars.
I want the panelists to know and the members of the
subcommittee to know that the chairman of the subcommittee,
myself, has very serious reservations about this legislation. I
really don't see, if the heating oil industry wants to
establish this type of fund, it needs Federal legislation to do
so. If it is as widely supported by the heating and oil
industry as it is claimed to be, there would be no need for
legislation making contributions to the fund mandatory.
I am also concerned that the fee becomes another surcharge
that will be passed on to consumers. Although the amount of the
fee is small, it does raise the price of heating oil at a time
when some consumers are having difficulty meeting the price
that they already have to pay.
Finally, I would like to see as we take testimony what the
assurances are that the money raised by the fee is going to be
used as intended by the legislation. Recently, a Washington
Post newspaper article highlighted the potential for abuse with
these types of fees when there is not sufficient
accountability. I understand supporters of the legislation are
also concerned about the potential for abuse and that they are
taking steps to address it.
Today's hearing is an important hearing. A fair number of
members of the subcommittee and full committee on both sides of
the aisle have cosponsored this legislation, and Congressman
Greenwood has been very cooperative in trying to address some
of the concerns that I have raised, and the primary reason we
are holding the hearing is because Congressman Greenwood has
been such an advocate of this legislation and has been very
cooperative in trying to work out some of the concerns.
The chair would recognize Mr. Sawyer for an opening
statement if he wishes.
Mr. Sawyer. Mr. Chairman, I appreciate the opportunity and
will forego it.
Mr. Barton. Would the gentleman from Illinois, Mr. Shimkus,
wish to be recognized for an opening statement?
Mr. Shimkus. It is part of what I submitted for the first
hearing.
Mr. Barton. Gentleman from Maryland, Mr. Wynn, for an
opening statement.
Mr. Wynn. Thank you, Mr. Chairman.
I am not going to make an opening statement, but I will say
that I had a line of concerns similar to yours with respect to
why this industry-based project needs a Federal imprimatur. So,
with that, I yield.
Mr. Barton. I thank the gentleman from Maryland.
The gentleman from New Jersey, Mr. Pallone, who I believe
is a sponsor of the legislation, would you like to be
recognized for a opening statement?
Mr. Pallone. Thank you, Mr. Chairman.
Just briefly, as you mention, I am a cosponsor and
supporter of the bill. The Act, the National Oilheat Research
Alliance Act, would enable the oilheat industry to establish an
industry-funded check-off program that supports industry
research and development, safety training and consumer
education without Federal funding. Just in my own district, we
have about 815,000 households--that is State-wide, I should
say--that use oilheat and about 215,000 occupied housing units
in my district that use oilheat. And, of these, about 20
percent--they amount to about 20 percent of the total, and
there are about 409 oilheat businesses that employ about 4,000
people. So I only mention these numbers because they represent
substantial employment and heating consumption figures.
The legislation before us today would not require any
support from the Federal Government. It is only enabling
legislation. The NORA legislation, as I understand it, also is
virtually identical to legislation that was unanimously passed
by the House and Senate Commerce Committees in 1996. That is
the Propane Education and Research Act that this is modelled
after. And, of course, that Propane Act was subsequently
enacted by Congress and signed into law. So I think they are
using that as a model, and that certainly has served us well,
and I think we could do the same for this industry and help
them in their research efforts.
I would support the bill and thank you for the time, Mr.
Chairman.
Mr. Barton. I thank the gentleman from New Jersey.
Welcome, gentlemen. It is always the case that the second
hearing or the second panel doesn't have the attendance that
the first. Plus, we are beginning to push the lunch hour, but
there is actually quite a bit of interest and support for the
legislation that you two gentlemen are here to testify. So
don't take the lack of panelists as a lack of interest.
We are going to put your statements in the record in their
entirety. We will recognize Mr. Allen for 7 minutes to
summarize his, and then we will recognize Mr. Woosnam.
So, Mr. Allen, we want to welcome you to the subcommittee.
Your statement is in the record in its entirety, and you are
recognized for 7 minutes to elaborate on it.
STATEMENT OF DON ALLEN, PRESIDENT, E.T. LAWSON AND SONS
Mr. Allen. Chairman Barton and members of the subcommittee,
my name is Don Allen; and I appreciate this chance to testify
in support of H.R. 380, the National Oilheat Research Alliance
Act. I am President of E.T. Lawson, a company based in Hampton,
Virginia, that distributes heating oil. I also serve as cochair
of the legislative NORA effort and am Vice President of the
Petroleum Marketers Association, our national trade
association.
On behalf of PMAA and the heating oil industry, I am
pleased to share with you our strong support for H.R. 380. The
NORA legislation is modeled after the propane check-off program
that was approved by this committee and enacted into law in
1996. Like the propane bill, H.R. 380 would allow for an
industry-funded check-off program in which a small portion of
the wholesale price of oilheat will be used to support
activities such as research and development, safety, training
and consumer education, all without Federal funding or
involvement.
As in the case of the propane check-off, the NORA program
will provide substantial benefits to our industry and its over
30 million consumers. NORA will promote energy efficiency and
consumer and worker safety, all of which will help to lead to
lower fuel costs and a cleaner environment. The NORA
legislation also will create parity for our industry.
Unfortunately, the heating oil industrial, unlike our main
competitors, currently does not benefit from a nationwide
industry program. By way of explanation, our industry is made
up of over 7,000 small businesses that employ almost a quarter
of a million workers. These businesses are small, family owned
enterprises that compete against each other and other sources
of fuel to meet the energy needs of millions of consumers. The
diverse nature of our industry means that no single company or
no 10 single companies or no 50 single companies has enough
market share to fund these needs.
NORA is a fair, self-help measure that will enable our
industry to compete on a level playing field with other energy
sources.
As you know, Mr. Chairman, the House of Representatives
passed a measure almost identical to H.R. 380 in the last
Congress, but the Senate did not consider the legislation
before the 105th Congress adjourned. The Senate has now
unanimously approved NORA in this session of Congress. As the
NORA legislation goes through the House the second time, it
continues to have the support of virtually every local, State,
regional and national trade association affiliated with our
industry.
In addition to solid industry support, H.R. 380 has been
endorsed by many notable third parties, including consumer,
environmental and labor groups. H.R. 380 also has broad
bipartisan support from 128 House cosponsors, including a
majority of the members of this subcommittee.
In summary, NORA will help create a level playing field by
providing the heating oil industry with the same type of
programs that competing energy sources enjoy. The program
requires no Federal funding and essentially no Federal
involvement, and the bill will benefit consumers as well as the
environment. Given the broad-based bipartisan support for H.R.
380 from both within and outside of our industry, we hope that
the House of Representatives will act swiftly to pass this
important legislation just as it did in 1998.
Thank you, Mr. Chairman, for holding this hearing and
allowing me to share my support for this bill.
[The prepared statement of Don Allen follows:]
Prepared Statement of Don Allen on Behalf of the Petroleum Marketers
Association of America and The National Oilheat Research Alliance
Chairman Barton and Members of the Subcommittee, my name is Don
Allen and I appreciate this chance to testify in support of HR 380, the
National Oilheat Research Alliance Act. I am president of E.T. Lawson,
a company based in Hampton, Virginia that distributes heating oil. I
serve as co-chair of the Legislative Action Committee for the NORA
Alliance, which is a coalition of marketers and distributers of heating
oil who strongly support HR 380. I am also the regional vice chairman
of the Petroleum Marketers Association of America (PMAA).
On behalf of PMAA and the heating oil industry, I am pleased to
share with you our strong support for HR 380. To summarize, HR 380 will
help our industry compete on a level playing field with other energy
sources that already national, industry programs like NORA; it is a
fair, self-help measure that requires no federal funding or basically
no federal involvement; and it will provide important benefits to the
millions of American consumers of heating oil and it will benefit the
environment.
HR 380 Is Based on a Successful Law and Has Solid Support from Every
Segment of the Heating Oil Industry and Respected Third Parties
The NORA legislation is modeled after the propane check-off program
that was approved by this Subcommittee and the House Commerce Committee
before being enacted into law in 1996. Using that program as a model,
we have tried to provide as much flexibility as possible to those who
will participate in the NORA check-off program.
Like the propane bill, HR 380 would allow for an industry-funded
check-off program in which a small portion of the wholesale price of
oilheat will be used to support activities such as research and
development, safety, training, and consumer education--all without
federal funding or involvement. As in the case of the propane check-
off, the NORA program will provide substantial benefits to our industry
and its millions of consumers. NORA will promote energy efficiency and
consumer and worker safety that will help lead to lower fuel costs and
a cleaner environment.
Our industry and legislators, including Chairman Bliley and
Congressman Greenwood, have worked long and hard to craft a compromise,
non-controversial bill. HR 380 is the product of these efforts. To
reach a consensus on the NORA legislation, we have consulted
representatives of every competing energy source, as well as both the
U.S. Department of Energy and the Department of Justice.
As you know, Mr. Chairman, the House of Representatives passed a
measure almost identical to HR 380 in the last Congress, but the Senate
did not consider the legislation before the 105th Congress adjourned.
The Senate has now unanimously approved NORA in this session of
Congress.
As the NORA legislation goes through the House for the second time,
it continues to have the support of virtually every local, state,
regional, and national trade association affiliated with our industry
including PMAA, 25 state trade associations, labor unions and many
other industry groups. In fact, we have conducted surveys that show
powerful industry support for an industry-financed check-off program. A
professional polling firm conducted a nationwide survey of the industry
in 1997 and found that 96% of the industry supports creation of a
program like NORA. Our industry has long-held a strong desire to
develop the means to support R & D, improve safety and training, and
provide consumer education--all without unnecessary involvement of the
federal government. The NORA check-off program is just the type of
program that will accomplish our industry's objectives.
In addition to the strong industry support for NORA, HR 380 also
has been endorsed by many notable third parties, including the Consumer
Energy Council of America Research Foundation, the National
Environmental Policy Institute, the Fiberglass Tank & Pipe Institute,
and the International Brotherhood of Teamsters. HR 380 also has broad,
bipartisan support from 128 House cosponsors, including a majority of
the members of this Subcommittee.
NORA Will Support Parity for the Heating Oil Industry
Currently, the heating oil industry, unlike our main competitors,
does not benefit from a nationwide industry program. Our industry is
made up of over 7,000 businesses that employ almost 250,000 workers.
These businesses are small, family-owned enterprises that compete
against each other and other sources of fuel to meet the energy needs
of millions of consumers. The diverse nature of our industry means that
no single company has a large enough stake to fund such a program. NORA
is a fair, self-help measure that will enable our industry to compete
on a level playing field with other energy sources.
Oilheat's main competitors have long-benefited from nationwide
industry programs that the federal government has either established or
supported. These programs support many of the same activities that we
hope to undertake under NORA. The Gas Research Institute (GRI), for
example, conducts a variety of industry activities, including R & D,
that are designed to benefit gas consumers and the industry. GRI, which
was traditionally funded and supervised under the Federal Energy
Regulatory Commission's regulatory authority, has been very successful
at helping the natural gas industry meet its important needs.
Operation of the NORA Check-off Program
The NORA check-off program will support research and development,
safety, training, and consumer education--all important activities that
the oilheat industry greatly needs to address. These activities will
help lower consumers' energy bills, and they will help create a cleaner
environment.
Under HR 380, the check-off program will only go into effect if
industry support is fully documented through the referendum process.
After the legislation becomes law, a referendum will be conducted among
oilheat retail marketers and wholesale distributors to authorize the
creation of the check-off and the ``National Oilheat Research
Alliance'' to manage the program for the industry. The industry
organization will cover the costs of the referendum, although it will
be reimbursed with check-off funds if the Alliance is established.
For the NORA check-off program to go into effect, two-thirds of
those voting in both the retail marketer class and wholesale
distributor class must vote their approval. The total volume of oilheat
sold to consumers or the total volume of dyed distillate sold at the
terminal rack during the previous year or other similar period will
determine the voting rights among retail marketers and wholesale
distributors respectively. Once the NORA check-off is established, a
majority vote of both classes can terminate the program. If individual
states do not wish to participate in the program, they may opt out of
it.
Following the approval of the industry, the qualified industry
organization will select 61 members for the board of the National
Oilheat Research Alliance. These members will represent all segments of
the heating oil industry. No more than 11 Alliance members will be
selected each year to serve as an Executive Committee which will manage
the Alliance and coordinate the check-off operations.
The NORA program allows a small portion of the wholesale price of
oilheat to be collected and used to fund key industry activities. H.R.
380 provides for an assessment of $.0020 per gallon of dyed distillate
or number one distillate.
NORA Will Provide Important Benefits for Our Industry, Its Consumers,
and the Environment
The NORA program promises to provide direct benefits for our
industry, its consumers, and the environment. HR 380 outlines several
key areas of focus including research and development, safety,
training, and consumer education needs.
In particular, check-off funds will support research and
development of new technologies and more efficient equipment and
appliances. It will also help our industry provide employee and
consumer training and safety efforts, as well as key consumer outreach
initiatives, including cooperative advertising with state associations
and builder outreach.
Under NORA, our industry will be able to cooperate with top
research facilities--including universities and laboratories--to
develop ground-breaking technologies. In turn, NORA will help our
industry by enabling members to share research discoveries with the
market through information, new products, and new systems. Advances in
areas such as fuels and fuel quality, venting systems, heat transfer
technology, and system engineering will help to increase efficiency and
improve equipment usage. In turn, both American consumers and oilheat
companies will benefit from lower costs. As R & D leads to cleaner
fuels and more efficient equipment, the environment will also benefit
from NORA and the important advances that this program will pioneer.
In summary, NORA will help create a level playing field by
providing the heating oil industry with the same type of program that
competing energy sources enjoy, the program requires no federal funding
and essentially no federal involvement; and the bill will benefit
consumers, as well as the environment. Given the broad-based,
bipartisan support for HR 380 from both within and outside of our
industry, we hope that the House of Representatives will act swiftly to
pass this important legislation, just as it did in 1998.
Mr. Chairman, thank you for holding this hearing and for allowing
me to share our strong support for HR 380.
Mr. Barton. Thank you, Mr. Allen, and thank you for being
brief in your testimony. We appreciate that.
We would now like to recognize Mr. Woosnam. Your statement
is in the record, and you are recognized for up to 7 minutes to
elaborate on it.
STATEMENT OF DOUGLAS WOOSNAM, DIRECTOR OF PUBLIC AFFAIRS,
ALLENERGY MARKETING COMPANY, LLC
Mr. Woosnam. Thank you, Mr. Chairman.
My name is Doug Woosnam. I live in New Hope, Pennsylvania.
I presently work for ALLEnergy Marketing Company. Our
company's retail operations serve approximately 73,000
residential customers and seven of the Mid-Atlantic and
Northeast States plus the District of Columbia. We deliver over
95 million gallons of home heating oil, 4 million gallons of
propane and over 200 million gallons of gasoline, diesel and
other petroleum products. We also market natural gas to homes
and businesses from New Jersey to New Hampshire and operate
wholesale terminals that provide supply to other retail heating
companies in our region.
I am here to share our strong support for the NORA
legislation, the National Oilheat Research Alliance Act, H.R.
380, and to thank my Congressman, Jim Greenwood, for sponsoring
this important legislation.
We are also very grateful to Chairman Bliley for his
continued support of our efforts and to you, Mr. Chairman, for
holding today's hearing. We also appreciate the assistance that
many members of this committee have pledged to H.R. 380,
including the support of 17 subcommittee members who have
cosponsored this legislation.
This bill represents the years of hard work that our
industry has spent in developing an industry-financed program
to support research and development, safety, consumer education
and other key initiatives. Through the NORA program, our
industry will be able to meet its most vital needs through its
own efforts, with minimal government involvement and no
government cost. We are enthusiastic about the benefits that
the NORA program will provide for our industry and the 30
million Americans who use heating oil.
H.R. 380 is essentially identical to a bill that the House
passed unanimously in 1998 after being considered by this
subcommittee and the full Commerce Committee but which,
unfortunately, was not considered by the Senate before the end
of the 105th Congress. In November, 1999, the Senate considered
and unanimously approved its companion version of the NORA
legislation. Now that the Senate has acted, we are hopeful that
the House of Representatives will take swift action to pass the
NORA legislation once again.
The NORA program promises to benefit consumers in a number
of ways. For example, one of the most important aspects of the
NORA program is that it will enable our industry to fund
important research and development efforts.
A 1997 report conducted by Brookhaven National Lab for the
United States Department of Energy outlined a comprehensive
research agenda for the development of more efficient burning
equipment, more effective heat transfer technology and other
similar activities. As the report notes, the innovations that
will help result from our R&D efforts financed by NORA will
help reduce consumers' fuel bills by increasing energy
efficiency through better fuel quality and more efficient
burners. The BNL report also points out that these advances in
fuel efficiency will help create a cleaner environment.
As the National Environmental Policy Institute has also
noted, NORA-financed research and development will lead to
improved fuel quality, more efficient equipment and improved
heat transfer devices, all of which will produce substantial
environmental benefits.
NEPI is one of the many diverse organizations--including
the Consumer Energy Council of America, labor unions, the
propane industry and other industries and organizations--that
have endorsed the NORA legislation.
As I have just noted, the NORA legislation has been
endorsed by the Consumer Energy Council of America; and we are
very pleased that the Nation's oldest public interest energy
policy organization has recognized that NORA will lead to
impressive benefits for consumers of heating oil.
In the area of consumer education, NORA-financed outreach
will help consumers in a number of ways--a simple reminder to
customers to tune up their equipment each year or notifying
them of new technology improvements that could save them a
significant amount of money. Obviously, safety and training
activities focused both on the industry employees and consumers
will also provide significant benefits to the consumer and the
industry and all States in which oilheat is utilized.
With your permission, Mr. Chairman, I would like to include
the Consumer Energy Council's endorsement letter into the
record.
To conclude, we believe that H.R. 380 will create tangible
benefits for our industry--more importantly, its consumers and
the environment.
Thank you again, Mr. Chairman, for the opportunity to
testify here today.
[The prepared statement of Douglas Woosnam follows:]
Prepared Statement of Douglas Woosnam, Director of Public Affairs,
AllEnergy Marketing Co., LLC
Mr. Chairman and Members of the Subcommittee, I am Doug Woosnam, I
live in New Hope, PA and I presently work for AllEnergy Marketing Co.,
LLC. Our company's retail operations serve approximately 73,000
residential customers in 7 of the Mid-Atlantic and Northeast states
plus the District of Columbia. We deliver over 95 million gallons of
home heating oil, 4 million gallons of propane and 200 million gallons
of gasoline, diesel and other petroleum products. We also market
natural gas to homes and businesses from New Jersey to New Hampshire
and operate wholesale terminals that provide supply to other retail
heating oil companies in our region.
I am here to share our strong support for the National Oilheat
Research Alliance (NORA) Act, H.R. 380, and to thank my Congressman,
Jim Greenwood, for sponsoring this important legislation. We are also
grateful to Chairman Bliley for his continued support of our efforts,
and to you, Mr. Chairman, for holding today's hearing. We also
appreciate the assistance that many members of this subcommittee have
pledged to HR 380, including the support of the 17 subcommittee members
who have cosponsored this legislation.
Background of HR 380: Both the House and Senate Have Already
Unanimously Approved NORA--But in Different Sessions of
Congress
This bill represents years of hard work that our industry has spent
in developing an industry-financed program to support research and
development, safety, consumer education, and other key initiatives.
Through the NORA program, our industry will be able to meet its most
vital needs through its own efforts, with minimal government
involvement and at no government cost. We are enthusiastic about the
benefits that the NORA program will provide for the heating oil
industry and the 30 million American consumers of heating oil.
HR 380 is essentially identical to a bill that the House passed
unanimously in 1998 after being considered and approved by this
subcommittee and the full Commerce Committee. Unfortunately, time ran
out in the 105th Congress before the Senate could consider the
legislation. In 1999, the Senate considered and then unanimously
approved its companion version of the NORA legislation. Congressman
Greenwood reintroduced his NORA measure in January and HR 380 now has
128 cosponsors, almost evenly divided between republicans and democrats
from diverse geographic parts of the country.
NORA is Modeled on Established Law--The Successful Propane Check-off
Program
HR 380 is nearly identical to the check-off program for propane
which was enacted into law in 1996 (The Propane Education and Research
Act of 1996 (PERA), Public Law 104284 (15 U.S.C. 6401, et seq.)). NORA
is basically the same check-off legislation, with some slight
modifications to account for the differences between the two types of
fuel, and with some adjustments made to make the program more flexible.
For example, the NORA check-off program is only intended to operate in
the 24 states that have the highest levels of heating oil consumption.
HR 380 calls for a referendum in each of these states in order to
provide flexibility for those in the industry. If a state does not wish
to participate in the NORA program, it can simply decline to conduct a
referendum or it can defeat the referendum. In this way, industry
participants and individual states can determine whether or not they
wish to be participants in the NORA check-off program.
The recent, substantial success of the propane check-off program
provides further support for our view that the NORA program will help
the heating oil industry provide direct, tangible benefits for
consumers. After a vast majority of both the producer and retail
marketer classes voted in favor of the propane check-off, the Propane
Education and Research Council (PERC) went into effect in July 1997.
After nearly three years in operation, the program continues to have
overwhelming industry support, and for good reason. Funds from the
propane check-off have been used to address many of the industry's most
vital research, development, safety, training, and consumer education
needs.
PERC has used assessed funds to support a number of programs,
including, for example, the production and widespread distribution of
an educational video that is designed to ensure compliance with new
safety guidelines for the propane industry. The video illustrates how
to safely satisfy the new guidelines for overfilling prevention devices
(OPD) which are devices that are intended to improve customer safety.
Through programs such as this one, the propane check-off program has
provided great benefits to the industry and propane consumers. There is
every reason to believe that the NORA check-off program would enjoy the
same success.
NORA Will Support Vital Industry Needs, Including Research and
Development Efforts, That Will Benefit Consumers and The
Environment
One of the most important aspects of the NORA program is that it
will enable our industry to fund much-needed research and development
efforts. A 1997 report conducted by the Brookhaven National Laboratory
for the U.S. Department of Energy outlines a comprehensive research
agenda for the development of more efficient burning equipment, more
effective heat transfer technology, and other similar activities. The
BNL report identifies a number of fields of research that will help
improve reliability, maintenance, and efficiency. In particular, the
report identifies fuel quality research, equipment diagnostics-service
tools, and venting research that would help improve equipment
performance and efficiency. As the report notes, the innovations that
will result from R & D efforts financed by NORA will help reduce
consumers' fuel bills by increasing energy efficiency through better
fuel quality and more efficient burners.
In fact, the BNL report concluded that the NORA program ``will
provide economic support to millions of American households by reducing
fuel bills and thousands of small family businesses in the United
States who will gain from having satisfied consumers and reduced
operating costs.'' According to BNL, consumers will receive a high rate
of return for each dollar spent since R & D will increase efficiency
and improve heat transfer technology. Further, the NORA program will
lower maintenance, repair, and service costs by improving training for
service technicians. The BNL report also points out that these advances
in fuel efficiency will help create a cleaner environment.
The National Environmental Policy Institute has also noted that
NORA-financed research and development will lead to improved fuel
quality, more efficient equipment, and improved heat transfer devices--
all of which will produce substantial environmental benefits. NEPI is
one of the many diverse organizations--including the Consumer Energy
Council of America, labor unions, and the propane industry--that has
endorsed the NORA legislation.
The endorsement of the Consumer Energy Council of America (CECA),
which is the nation's oldest public interest energy policy
organization, is especially important to us. CECA has recognized that
NORA will lead to impressive benefits for consumers of heating oil. In
the area of consumer education, for example, NORA-financed outreach
will help consumers in a number of ways. A simple reminder to customers
to have their equipment tuned up, or notifying them of new technology
improvements, could save customers a significant amount of money.
Obviously, safety and training activities (focused both on industry
employees and on consumers) also will provide significant benefits to
the consumer and the industry in all states in which oilheat is
utilized.
To conclude, we believe that the NORA program contemplated in HR
380 will provide the best means for allowing our industry to finance
research and development, training, safety and consumer information
without the use of tax dollars or a government bureaucracy. In turn,
these activities will create tangible benefits for our industry, its
consumers, and the environment.
Thank you again, Mr. Chairman, for the opportunity to testify
today.
Mr. Barton. Thank you, Mr. Woosnam.
If this were not a democracy, I could say there is a quorum
and move the bill right now. That wouldn't be fair.
I am going to recess briefly, go vote. I should be back
within 10 minutes.
We are in recess for approximately 10 minutes. I would ask
our witnesses to stay close to the hearing room because as soon
as we get back we will try to have the questions.
[Brief recess.]
Mr. Shimkus [presiding]. Okay. We will call this hearing
back into session.
I will begin with my 5 minutes of questioning, and we will
see if any of my colleagues come back, and, if not, then we
will be finished.
Really, I have a series of four questions that I would like
for you both to address, and we will see how far I get along in
the process.
First question, would you please explain how rural
consumers of heating oil, including farmers and ranchers, would
be affected by the NORA program?
Mr. Woosnam. This program is only designed to affect those
people who consume the product for heating fuels. So a farmer
who uses diesel for their tractors or equipment and other
nonheating purposes would not be included, would not be
affected, would not pay.
Mr. Allen. But those residents in rural areas who use home
heating oil to heat would receive the same benefits as urban
and suburban dwellers. They would receive benefits from the
research and development that would create new products. It
would be more efficient and better for the environment. They
would receive benefits from the training that could be provided
to small businesses that serve those rural farmers and
ranchers. You know how small businesses are when it comes to
training. There are no line items in their budget for that to
consider that function. They will benefit just like our
suburban and urban users.
Mr. Shimkus. Very good.
In the testimony that we had and some of the written
testimony, it was stated that there is a substantial percentage
of those in the industry who support the legislation that we
have before us. Can you briefly tell me if you perceive any
opposition and where that opposition is coming from?
Mr. Allen. Congressman, I have been involved in this for 6
years, and during that time we have gone around to 20 of the 24
States personally to promote this program, and in that time we
have addressed concerns and put together a bill before you
that, to my knowledge, at this point has no opposition either
from within the industry or outside of the industry. It has
been a long process and what today is before you is something
that is broadly supported, as evidenced by the number of
cosponsors on this committee and in the House.
Mr. Shimkus. And may be evidenced by the lack of people
here.
Mr. Woosnam.
Mr. Woosnam. Just to support what Mr. Allen just said, I
mean, we reached out to labor unions, again, the Consumer
Energy Council, which I think is acknowledged as one of the
most senior of consumer watchdog groups. Even our competition
in the natural gas industry has weighed in, and we believe that
the product you have before you has been very well vetted, so
to speak.
Mr. Shimkus. Give me a brief synopsis of how do we expect
NORA funds will be spent.
Mr. Allen. Just as this legislation prescribes. The
legislation says it will be used for research and development,
develop new products, more reliable products and cleaner
products. We have great needs, and we will do that. The
legislation says that we can use it for training our
infrastructure, for improving their safety practices.
As you know, there are 7,000 small family businesses who
sell heating oil to the over 30 million American consumers.
They vitally need the training that this bill would provide so
we can compete in the 21st century. And then, finally, we have
many publics that we must educate. We must educate architects,
builders, regulators, people who deal with our business daily
and our own consumer about the new oilheat we are going to
create.
Mr. Woosnam. Again, I would support what Don said. One of
our critical issues right now is finding qualified technicians,
and NORA funds could be used to work with local technical
institutes to establish training programs to bring new people
into the marketplace, employees.
But the big thing I say is this is a consumer benefit
because people will be better informed about the product they
are using to heat their homes.
Mr. Shimkus. And knowing and understanding the make-up of
this committee and having friends from the northeastern
States--I was outside the room, so I don't know if the question
of price fluctuations came up. How do you perceive NORA to be
helpful in addressing heating oil concerns and price
fluctuations? Of course, with the oil shortage or the
restriction of importation or actually processing that OPEC has
done, is this going to be helpful or harmful in this whole
address to my colleagues in the northeastern States on the
issue of price?
Mr. Allen. This legislation we view as a vehicle to prevent
happening from what happened again. It cannot happen to our
industry again. It destroys the confidence of our consumers
within our industry. It destroys the confidence of our
coworkers in what we do, and it destroys the financial aspects
of a heating oil dealer. Your cash lines are exploded. Your
margins are decreased. We cannot allow this to happen.
NORA, we think, can cause solutions to occur. My own
particular company has used price protection for its consumers
for 10 years. This last year my 8,000 customers experienced no
price spike. There are countless other dealers like myself
throughout the oilheat industry who have offered these
programs. NORA, we think, can provide consumers the awareness
of that choice. It can through education bring more dealers,
train them in how to manage this type of program. These are the
types of things we think NORA can do to prevent this from
happening again.
Mr. Woosnam. I have nothing to add to Mr. Allen's
statement.
Mr. Shimkus. Having none of my colleagues return, what I
will do is leave the record open for the requisite number of
days if they want to submit questions to you all.
And, with that, having no other members here and no other
questions, I will adjourn this hearing.
[Whereupon, at 12 noon, the subcommittee was adjourned.]