[Senate Hearing 107-413]
[From the U.S. Government Publishing Office]
S. Hrg. 107-413
THE BUSINESS OF ENVIRONMENTAL TECHNOLOGY
=======================================================================
HEARING
BEFORE THE
COMMITTEE ON SMALL BUSINESS AND ENTREPRENEURSHIP
UNITED STATES SENATE
ONE HUNDRED SEVENTH CONGRESS
FIRST SESSION
__________
AUGUST 1, 2001
__________
Printed for the Committee on Small Business and Entrepreneurship
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COMMITTEE ON SMALL BUSINESS AND ENTREPRENEURSHIP
ONE HUNDRED SEVENTH CONGRESS
----------
JOHN F. KERRY, Massachusetts, Chairman
CARL LEVIN, Michigan CHRISTOPHER S. BOND, Missouri
TOM HARKIN, Iowa CONRAD BURNS, Montana
JOSEPH I. LIEBERMAN, Connecticut ROBERT F. BENNETT, Utah
PAUL D. WELLSTONE, Minnesota OLYMPIA J. SNOWE, Maine
MAX CLELAND, Georgia MICHAEL ENZI, Wyoming
MARY LANDRIEU, Louisiana PETER G. FITZGERALD, Illinois
JOHN EDWARDS, North Carolina MIKE CRAPO, Idaho
MARIA CANTWELL, Washington GEORGE ALLEN, Virginia
JEAN CARNAHAN, Missouri JOHN ENSIGN, Nevada
Patricia R. Forbes, Democratic Staff Director and Chief Counsel
Emilia DiSanto, Republican Staff Director
Paul H. Cooksey, Republican Chief Counsel
C O N T E N T S
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Opening Statements
Page
Kerry, The Honorable John F., Chairman, Committee on Small
Business and Entrepreneurship, and a United States Senator from
Massachusetts.................................................. 1
Bond, The Honorable Christopher S., Ranking Member, Committee on
Small Business and Entrepreneurship, and a United States
Senator from Missouri.......................................... 35
Edwards, The Honorable John, a United States Senator from North
Carolina....................................................... 38
Witness Testimony
Bentley, Jeff, chief operating officer, Nuvera Fuel Cells, Inc.,
Cambridge, MA.................................................. 8
Bedogne, Ralph, vice president, Finance and Government Relations,
Engineered Machined Products, Escanaba, MI..................... 26
Kennard, Byron, executive director, the Center for Small Business
and the Environment, Washington, D.C........................... 39
Dreessen, Thomas, chief executive officer, EPS Capital
Corporation, Doylestown, PA.................................... 44
Patterson, Ed, president, Natural Environmental Solutions, Inc.,
St. Louis, MO.................................................. 49
Renberg, Dan, member, Board of Directors, Export-Import Bank of
the United States, Washington, D.C............................. 66
Stolpman, Paul, director, Office of Atmospheric Programs, U.S.
Environmental Protection Agency, Washington, D.C............... 74
Alphabetical Listing and Appendix Material Submitted
Bedogne, Ralph
Testimony...................................................... 26
Prepared Testimony............................................. 29
Bentley, Jeff
Testimony...................................................... 8
Prepared Testimony............................................. 11
Bond, The Honorable Christopher S.
Opening Statement.............................................. 35
Prepared Statement............................................. 37
Dreessen, Thomas
Testimony...................................................... 44
Prepared Testimony............................................. 47
Edwards, The Honorable John
Opening Statement.............................................. 38
Kennard, Byron
Testimony...................................................... 39
Prepared Testimony............................................. 41
Kerry, The Honorable John F.
Opening Statement.............................................. 1
Prepared Statement............................................. 4
Patterson, Ed
Testimony...................................................... 49
Prepared Testimony............................................. 51
Renberg, Dan
Testimony...................................................... 66
Prepared Testimony............................................. 69
Snowe, The Honorable Olympia J.
Prepared Statement............................................. 56
Stolpman, Paul
Testimony...................................................... 74
Prepared Testimony............................................. 76
THE BUSINESS OF ENVIRONMENTAL TECHNOLOGY
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WEDNESDAY, AUGUST 1, 2001
United States Senate,
Committee on Small Business and Entrepreneurship,
Washington, D.C.
The Committee met, pursuant to notice, at 9 a.m., in room
428-A, Russell Senate Office Building, The Honorable John F.
Kerry (Chairman of the Committee) presiding.
Present: Senators Kerry, Bond, Edwards, and Snowe.
STATEMENT OF THE HONORABLE JOHN F. KERRY, A UNITED STATES
SENATOR FROM MASSACHUSETTS
Chairman Kerry. The hearing will come to order. Thank you
all very much. I appreciate everybody being here and I look
forward very much to this hearing and I apologize to the
witnesses who were prepared to come previously and who on short
order switched their schedules. Unfortunately, the Senate is
not always the most orderly process and we live with these
changes ourselves and I apologize and I am very, very grateful
to all of you for being able to switch your schedules and come
in today. Thank you for doing that.
I personally am very excited about this hearing. It is
going to have to be conducted under some relatively tight
constraints because I have to be at a markup for the State
Department authorization bill in the Foreign Relations
Committee where I have personal pending business and that will
start at 10:30, so I am going to have to excuse myself at that
time.
But the reason I am excited about this hearing, and I think
it is a very important one, is that we are embroiled in a
longstanding debate in this country about the environment.
Historically, many politicians have been prepared too easily
and too quickly to pit good public policy, good environmental
policy, against the economy, against common sense economic
choices.
The fact is that there are literally thousands of
extraordinarily successful small businesses in this country
that are growing into big businesses, in many cases that have
proven again and again that this is a phony conflict, that this
is a tension that doesn't have to exist if we are smart about
it, and sensitive, and we create good public policy. The fact
is that small business can thrive. Big businesses can save tens
of thousands, hundreds of thousands, and even millions of
dollars by adopting good policies and we can do well
economically even as we do good for the country.
So I thank the Administration and all of our witnesses for
coming here today to focus on the important connection between
small business, job creation, and environmental protection.
Over the past 30 years, we have taken some very significant
steps in the country to safeguard the environment. We have
enacted the National Environmental Policy Act, the Clean Air
Act, the Clean Water Act, the Endangered Species Act, the Safe
Drinking Water Act, Superfund, and other principal
environmental protections.
Now, I will acknowledge, and sometimes some of my friends
in the environment don't like this, but I will acknowledge that
sometimes, as in any bureaucracy, the bureaucracy has a way of
getting in front of the intent of Congress, or even the sort of
common sense application of the law, and sometimes we have bad
results because young bureaucrats are excessively zealous
enforcers; they don't apply common sense and they reach too
far, or they try to apply a one-size-fits-all rule in a way
that just doesn't make sense when distinguishing between a very
large corporate entity versus a very small entity.
I believe that we can work through those kinds of problems.
But the bottom line is that we have created a broad legal
mandate in this country for environmental protection, and in
doing so, we created a demand for new technologies. For the
first time, industry and government demanded environmental
assessment, waste management, remediation of contaminated
properties, emissions reduction technologies, clean energy,
improved efficiency, and a slew of other environmental
services, and the private sector responded to that new demand
through the creation of innovative technologies.
I would remind people that there is no inherent automatic
marketplace for Abrams tanks or for B-1 bombers or for other
matters of our defense industry, but we have huge companies and
tens of thousands of Americans working in those industries.
Why? Because we defined a threat, we put a certain amount of
money into the definition of that threat, and the private
sector responded and so we find a certain component of our
economy therefore thriving in response to that created demand.
The environment is no different. We define a threat. If we
were to put a certain amount of our revenue toward the
remediation of that threat or dealing with that threat, the
private sector would have the opportunity to respond and we
would be the better for it.
Let me provide an example of some of the hysteria and some
of the positive benefits that come out of this equation. In
1990, Congress enacted amendments to the Clean Air Act that
mandated cuts in sulfur dioxide emissions from power plants and
refineries. We all know the negative impact of sulfur dioxide--
heart disease, respiratory illness, premature death, and so
forth. Its environmental impacts range from reduced visibility,
acid rain, forest crop ecosystem damage, and so forth. There
was no question that we would benefit from lower sulfur
emissions, but the question and controversy focused on the cost
of those sulfur emission reductions.
At the outset, industry told us with certainty that meeting
the cost of reductions would be roughly $10 billion, and EPA,
on the other side, estimated that the cost would approach about
$4 billion. Well, to our credit, we did put the requirements in
place. The actual cost has turned out to be approximately $2
billion, which is half of the EPA's estimate and one-fifth of
the industry's estimates. One of the principal reasons that
these costs fell so far below projection was because no one
took the time or worked through the difficulties of predicting
how innovation, like catalytic systems and conversions and
other technologies, would cut compliance costs.
So as we look at past experience, we learn that
implementing environmental safeguards in our future, whether it
is further cuts in air and water pollution or protection of the
public in many other ways, that we can use energy more
efficiently and generate renewable, reliable and domestic
energy and push the technology curve in ways that will
significantly alter the outcomes of cost and significantly
increase the revenue flow to companies in this country. This is
a vital lesson for us to learn; an important principle for us
to apply as we go forward.
When a market demands progress, change and evolution will
flow and small firms play a key role in making that happen. In
1999, the Small Business Administration investigated this role
and found the following: ``Small businesses are sources of
constant experimentation and innovation. They are an integral
part of the renewal process in defining market economies. They
have a crucial role as leaders of technological change and
productivity growth. In short, they change the market
structure.'' Now, I am going to put the rest of my text in the
record as if read in full because I want to try to adhere to
the standard here to keep this on time.
But the bottom line is this: We do not need to be trapped
in a false prison publicly with respect to this dialog. We
don't have to fear what we do best in this country, which is
innovation and entrepreneurial activity. If we can encourage
that kind of activity, with a sense to the marketplace, that it
will be sustained and that we are serious, we will see, I
believe, an explosion within the small business community of
this country of people pursuing their efforts to privately meet
the demand that they recognize is there and that is supported
through the Federal dollars that would be available to help
encourage the technology and the movement in those directions.
If we do that, we can again be the world leader in some of
these alternative and renewable possibilities as well as other
sectors of the technology field. The United States should not
be lagging behind Germany or Japan or any other country in the
world, given our technological prowess and the capacity of our
universities and our basic research playing field, and I think
it is important for us to begin to recommit to that and that is
what these hearings are about.
We also want to look in these hearings a little bit at how
we undo this tension between a small entity and good
environmental policy. I mean, how do we make it possible for
people to not feel that the bureaucracy is their enemy but
rather to have a more user-friendly cooperative process. Anyone
who wants to share any thoughts on those lines, we also welcome
them because we really want to explore fully all of the
possibilities here.
[The prepared statement of Chairman Kerry follows:]
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Chairman Kerry. So I thank the panel for being with us. We
have Mr. Byron Kennard, the executive director of the Center
for Small Business and the Environment in Washington; Mr. Jeff
Bentley, COO of Nuvera Fuel Cells, Inc., in Cambridge,
Massachusetts; Mr. Thomas Dreessen, CEO, EPS Capital
Corporation from Pennsylvania and Export Council for Energy
Efficiency in Washington; Mr. Ed Patterson, president of the
Natural Environmental Solutions, Inc., St. Louis, Missouri; and
Mr. Ralph Bedogne, vice president of Finance and Government
Relations, Engineered Machined Products, Escanaba, Michigan.
Gentlemen, if you would each keep your comments in summary
form, your full text will be placed in the record as if read in
full and I look forward to your testimony. Why don't we begin
over here, Mr. Bentley, with you and we will run right down the
line.
STATEMENT OF JEFF BENTLEY, CHIEF OPERATING OFFICER, NUVERA FUEL
CELLS, INC., CAMBRIDGE, MASSACHUSETTS
Mr. Bentley. Good morning and thank you very much for
allowing me to testify. I am Jeff Bentley, the chief operating
officer of Nuvera Fuel Cells in Cambridge, Massachusetts.
Nuvera is a designer and developer of fuel cell technologies
for companies providing clean energy solutions to stationary
power and transportation markets.
Nuvera employs about 130 people in the United States and 45
people in our office in Milan. Our suppliers and partners
include U.S. companies like DuPont, Corning, Caterpillar,
Engelhard, and Chevron, to name a few, and we also work with
leading international companies, such as RWE, the second
largest utility in Germany, and Mitsui, one of the largest
Japanese trading companies. We hope to commercialize fuel cell
technology to make the world a better place to live.
If you are unfamiliar with the technology or the Nuvera
story, 10 years ago, Nuvera's senior staff worked at Arthur D.
Little, a technology consulting firm. In 1997, we created a
breakthrough. We were able to, in a very ungainly device,
create 100 watts of electricity, enough to light one light
bulb, using gasoline. This was a breakthrough because it meant
that you could have an electric car with zero pollution that
runs on regular gasoline--no major fuel infrastructure changes,
no problems with vehicle range, and zero emission driving. News
of the breakthrough was communicated worldwide as the critical
link to someday realizing the commercial benefits of fuel cells
and transportation.
I would like at this point in time to extend my sincere
gratitude and appreciation to the U.S. DOE. They have been and
continue to be one of our strongest supporters. They were there
in 1992 when I approached them for funding for studies. They
were there in 1997, along with the National Labs from Illinois
and New Mexico at our breakthrough, supplying technology as
well as insights. DOE continues to support Nuvera's
groundbreaking technology development in fuel cells.
Turning back to fuel cells, how they work is pretty simple.
They take hydrogen. They separate protons and electrons. The
protons make water. The electrons drive an electric motor, a
light bulb, or anything that requires electric energy. A fuel
cell stack can, in fact, power a home. A fuel cell stack about
1-foot long can be integrated into a unit that is about the
size of your home heater and power your home and, if designed
correctly, also provide all of the energy for hot water and
heating.
A significant challenge to realizing this technology has
always been finding ways to produce hydrogen for the fuel cell.
There is a global infrastructure for gasoline and for natural
gas, but not for hydrogen. Early on, Nuvera recognized this
potential fatal flaw and went on to develop a fuel processor
which converts gasoline or natural gas or renewable ethanol
into hydrogen for a fuel cell. This enables fuel cells to
operate wherever you have a gas pump, wherever you have a
natural gas pipeline, wherever you have ethanol, such as the
Midwest and now California, or where you have a propane tank.
Today, Nuvera designs and develops fuel cells and fuel
processors into devices that range from 1 kilowatt to over 50
kilowatts, and we are integrating our proprietary technologies
into power plants for transportation and for stationary power.
In the United States, we intend to apply these for critical
power for telecommunications applications.
Fuel cells are one of the most exciting environmental
technologies today because they do have a real ability to use
energy more efficiently and address global warming. This is
certainly recognized by our customers and partners in Europe
and Japan and we are hoping it becomes more realized in the
United States, as well. Even major oil companies like Shell and
BP are taking steps to address global warming, and fuel cells
represent the best technology to more efficiently and cleanly
generate electricity.
Bringing the discussion a little closer to home, fuel cells
offer a viable alternative to generating clean, deployable,
dependable energy onsite for residences, for commercial
buildings, and remote applications. You can see here on the
screen the progression we have made since 1999 in reducing,
again, ungainly equipment into packages that will fit inside a
home to power a home or a small business.
As far as commercial prospects are concerned, our near-term
business plan is to export integrated fuel cell power systems
to Europe and Japan. Why? Because both of those countries are
further advanced than the United States in terms of
environmental consciousness and the support of their government
in terms of deployment of fuel cells.
Fuel cells are a revolution, not an evolution, and as a
result, small businesses like Nuvera have a key role because of
our ability to innovate. We are a small company seeking to
bring innovation to stationary power and transportation, two of
the biggest sectors in the economy. We are committed to
advancing the development of technologies.
I indicated before DOE's enormous role in helping us get
started. I would also like to recognize the Department of
Commerce Advance Technology Program. They funded a high-risk
program and that is now embedded into a system that we are
shipping to Europe, exporting to Europe and Japan, and also,
the DOE has helped us work with the State of Illinois and
others to use ethanol in fuel cells, gaining a double
advantage.
So I would urge you to continue the U.S. Government's work
with companies like Nuvera to help us commercialize the
technology. Some of the specific recommendations that I have
help us to remove regulatory barriers that impede the use of
fuel cells in utilities; help fund high-risk R&D, as you have
in the Department of Energy and the NIST ATP; provide
incentives for the use of renewable fuels and fuel cells--you
get a double win if you are using a renewable fuel in a high-
efficiency system; and finally, help the U.S. Government be a
pathfinder by applying fuel cell.
The ungainly device that we used to demonstrate our 100-
watt device is now on its way to the Smithsonian, and in its
place we have on test a device that, instead of 100 watts,
produces 90,000 watts, 90 kilowatts, in the same size. So we
have made tremendous progress since 1997 and the U.S.
Government has been a big part of that and we look forward to
continuing to work with them.
Chairman Kerry. Thank you very much, Mr. Bentley. That is
very interesting. I look forward to following up with you.
[The prepared statement of Mr. Bentley follows:]
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Chairman Kerry. Mr. Bedogne.
STATEMENT OF RALPH BEDOGNE, VICE PRESIDENT OF FINANCE AND
GOVERNMENT RELATIONS, ENGINEERED MACHINED PRODUCTS, INC.,
ESCANABA, MICHIGAN
Mr. Bedogne. Thank you very much. As you mentioned, Senator
Kerry, the business--we are in a different element. We actually
deal with diesels, and there is a perception out there that
diesels are dirty and diesels do pollute, and they do add to
the pollution. But we have been able to develop some technology
that has helped that.
My written comments, which are part of a handout, summarize
in detail a number of points we as small businesses face. I
would like to elaborate on a few of those. First, it needs to
be well understood by this Committee and the general public
that small businesses can contribute and do contribute daily on
cutting-edge technological solutions facing our Nation. One of
the main reasons for this is that our large business partners
have and continue to be preoccupied in the diverse activities
that are required to run their core business. This has allowed
smaller businesses like EMP to capitalize on the opportunity of
adding value to our customers' products. This value-added
business development principle has been our mantra since the
beginning of EMP and obviously it has worked, and I will show
you as our growth demonstrates.
As larger companies are required to meet very specific
environmental and conservation regulatory limits, their focus
is on finding viable and affordable solutions to these issues.
This is not to say that the larger companies are not doing new
product development. On the contrary, in our business of diesel
engine manufacturing, our customers continue to develop new
engine platforms on a regular basis. But what EMP has been able
to offer through our engineering and product development is
that process of quickly designing or redesigning technologies
for these next-generation platforms in a timely and cost-
effective manner.
One important component for our success has been the
capable staff at the Federal levels who have identified
innovative research and development ideas and concepts that
concur with ours. A specific example, as you mentioned, is the
U.S. Army, the National Automotive Center, located in Warren,
Michigan, under the direction of General Caldwell and Dennis
Wynne. New and innovative ideas and concepts are tested and
implemented in a speed we as small businesses have to react to,
without layer upon layer of documentation and paperwork. With a
fleet of over 250,000 medium- and heavy-duty vehicles at the
NAC, anything that can improve engine performance and
efficiencies affects the bottom line, and then it can be
tested, as it is now, for commercialization, and that is what
has been very unique in the last 2 or 3 years of our, I will
call it, adventure with the agencies and departments. Everyone
is talking about, let us bring this to market, which we as
small businesses rely on. We are not here to get a line of
revenue to just subsidize our research and development.
Another staff is located at the Office of Heavy Vehicle
Technologies at the DOE, and this is under the direction of Tom
Gross and Jim Eberhardt. Identifying our capabilities, much
like a bank or a company does proper due diligence, the OHVT
was able to quickly decide that EMP could do this technology
and was capable of doing it. In less than 6 months, using DOE
funds, Argonne National Lab as the steering committee, and our
technology of an advanced oil filtration system, we were able
to bring to a test facility the proven technology and we are
now ready to commercialize.
Historically, programs that have helped us--and I say that
in a past tense because we have continued to grow and we will
continue to grow--programs like STTR and SBIR programs
occasionally come under budget scrutiny. EMP is an example of
how sound business practices along with innovative research and
new product development can work. Using SBIR funding as a
conduit for proof of concepts is appropriate for small
businesses and they also fuel larger businesses. We shouldn't
stall innovation. We need to work together with some of these
larger businesses because it is a proven opportunity for us.
I think the playing field is set when we require larger
businesses to percent cost share. This was something that came
out of discussions in the government the past 3 or 4 years, and
cost share eliminates those abuses. If I am going to put in 50
percent of $1.6 million, that means I am going to bring it to
market. I am not going to use it just for the sake of having
this revenue flow.
That cost share requirement should alleviate a number of
ownership issues, also, with patents and some obtrusive
negotiations that we have to deal with. If we own the
technology, it should be our technology. The government should
get credit and should be on the same page with us when we bring
it to market.
Smaller companies can spend as much on contractual review
and negotiations as they can on testing, and that is obtrusive
because sometimes we can't bring innovative ideas when we are
spending most of our time and money going over contractual
review. I think a real simplistic idea--a business principle
that can be brought up--is why not have a boilerplate agreement
across all agencies, across all departments that fit, so we are
not doing something for the DOE that is different from the DOD
that is different than the DEQ. Those things make some sense.
I have some slides on my company overview, but I think it
is important that we hear some others. You have those in the
permanent record, and I will be more than willing to answer
questions. But I think the important thing is that we, as a
small company, have grown since our president, Brian Larche's,
inception of this facility out of the ashes of a larger
business leaving our community. In the 1980's when cash cows
were moved to larger metropolitan areas, our little town in
Escanaba, Michigan, in the Upper Peninsula, of less than 15,000
people, he took an idea and a concept with less than $250,000
worth of sales and has increased those sales to $150 million
this year and over 450 employees. We have not stopped doing
research and development.
Research and development has been the key to our success,
and that success is based on the fact that we are bringing new
and innovative ideas. One idea that can add to the parasitic
loss and the efficiencies of diesel engines is the electronic
and controllable water pumps, and these are being tested and
bench tested and are on trucks at the National Automotive
Center today.
Chairman Kerry. Mr. Bedogne, that is very interesting, and
I appreciate your idea. It is a good idea. We should follow up
on that in questions.
[The prepared statement of Mr. Bedogne follows:]
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Chairman Kerry. Senator Bond has joined us. I have an
urgent phone call I need to take. Do you want to comment now
and make an opening statement?
STATEMENT OF THE HONORABLE CHRISTOPHER S. BOND,
A UNITED STATES SENATOR FROM MISSOURI
Senator Bond. I would love to. I will just cover for you
until you get back.
Chairman Kerry. You have made a career out of that. Thank
you, sir.
[Laughter.]
Senator Bond. I have learned from an expert. In any event,
my thanks to the witnesses for being here today. Please accept
my apologies for arriving late. I was hosting a breakfast on
problems of maintaining good information among governmental
agencies, and those of you who have dealt with governmental
agencies may appreciate the need for that. In about 35 minutes,
I have to join a markup on some very important health
legislation that is coming out of the Health, Education, Labor,
and Pensions Committee.
But this is a fascinating subject and hearings today for
me. I believe the development, sale, and use of environmental
technologies is a tremendous opportunity for small business. It
is going to be good for the environment.
Mr. Bedogne talked about the small town in Michigan, 15,000
that got hit with the big companies leaving. You hit a nerve.
My hometown of Mexico, Missouri, is 12,000 people and the major
industries there, basic industries have been bought out. The
employment is declining. We are looking at bringing a soy
diesel processing plant, among other things, perhaps set up as
a cooperative with soybean producers to make soy diesel, and I
know you are working in the diesel area. I hope that soy diesel
can be used.
We have also worked with the Missouri Soybean Association
to get soy diesel used by the Army in training, because they
used to use petroleum-based or diesel smoke to mimic
battlefield conditions. We are working to get them to use soy
smoke, environmentally much more friendly. The only danger is
that the soldiers may want french fries instead of focusing on
their efforts.
[Laughter.]
Senator Bond. But we are very excited today that we have a
Missouri small business who is going to be testifying. The
business uses one of my, I think, exciting new areas of
interest, biotechnology. Mr. Patterson has developed a natural,
nontoxic, biodegradable product extracted from bioengineered
seaweed that can remove pollutants from the air, a product
sprayed into industry plant emissions to cut the release of
volatile organic compounds. It is really exciting.
This past weekend, I visited Carthage, Missouri, and there,
a small company, a joint venture, Renewable Environmental
Solutions, was breaking ground on a plant. I happened to get a
grant through the EPA for a process that will take all the
waste from chicken and turkey processing plants, and I will
skip describing what that waste is--they refer to it
euphemistically as low-value organic material--and turn it into
natural gasses that can fuel the operation plus turn out 200
barrels of sweet crude grade oil a day plus other environmental
byproducts that, if this all works together, can have a
tremendous impact on the environment, first of all, and even
provide energy.
So we in Missouri are very excited about the developments
that are going on, and they are going on through small
entities. We know that, No. 1, Mr. Bentley has said that one of
the problems is environmental, is sometimes regulation. My
colleagues earlier this spring heard a Missouri small business
testify that the company was shut out of an EPA rulemaking on
ozone-depleting chemicals. The EPA did not conduct the proper
small business impact on the rule and they did not know this
regulation would prevent the small business in my State from
developing new environmentally-friendly products.
EPA at the time was very proud that they had managed to
keep the regulation secret before they proposed it. Well, Mr.
Chairman, as you know, I have proposed the AAA, Agency
Accountability Act, to help ensure that agencies give open and
full consideration to small business before issuing a
regulation that we think could help.
I also look forward--I hope I will be able to stay for the
testimony of the Administration witnesses. I will have
questions for them. Your colleague has called a markup on the
Health Committee today that, when they buzz me, I am going to
have to go join. But the EPA has a lot of experience in funding
research and the Energy STAR program is an important part of
our Nation's effort to promote energy policy.
I think that the Vice President's National Energy Policy
has very strong and clear commitments to advance the
environmental technologies, increase energy supply, and
encourage cleaner, more energy efficient use. I think the
Administration is on the right track with a sound energy
policy. By bringing together the resources of the EPA, DOE, and
the ingenuity of small business, there is an incredible
potential to raise awareness of the Nation's energy needs and
serve the vital resources and protect the environment.
Mr. Chairman, I thank you very much for holding this
hearing to give these tremendous efforts and these exciting
technologies the opportunity to be shared with our colleagues.
So with that, thank you.
Chairman Kerry. Thank you, Senator Bond.
[The prepared statement of Senator Bond follows:]
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Chairman Kerry. We were in the middle of testimony. Senator
Edwards, do you want to make any statement?
Senator Edwards. I have a brief statement which I would
like to make, if that is OK with the Chairman.
Chairman Kerry. Absolutely.
STATEMENT OF THE HONORABLE JOHN EDWARDS, A UNITED STATES
SENATOR FROM NORTH CAROLINA
Senator Edwards. Thank you, Mr. Chairman, very much. First
of all, thank you for holding this hearing. The importance of
the small business economy, we are all aware of, and the need
to promote environmental technology make this hearing
particularly timely. Small business is the backbone of our
national economy, which we all know, and we need to do
everything in our power to promote their growth.
I would like to talk today about one particular
environmental technological innovation involving dry cleaning.
Toxic and flammable solvents are used in 95 percent of the
35,000 small dry cleaning businesses in our country. Dry
cleaned clothes are the primary source of toxins entering our
home, endangering our health. These solvents often leak from
storage tanks, spill on the ground. They contaminate property
where businesses are located. They are a part of the large
number of brownfields that we have in this country.
There is a scientist in North Carolina named Dr. Joseph
Simone who has developed an environmentally-friendly
alternative to these solvents. He and his graduate students
developed the process that cleans clothes using liquid carbon
dioxide and special detergents, and this method has been
commercially available since February 1999. Several machines
are in operation around the country. The EPA has issued a case
study declaring that this is a viable alternative for dry
cleaning. R&D Magazine named Dr. Simone's technology one of the
100 most innovative technologies that can change people's lives
in this country.
This new technology is becoming increasingly recognized as
a safer, cleaner alternative to traditional dry cleaning, but
it is still expensive to use. I think we need to do everything
we can to encourage the use of these kinds of technologies as a
way to improve our health and to protect our environment.
Today, I will be introducing legislation that will provide
new and existing dry cleaners a 20-percent tax credit, 40
percent for those who are in enterprise zones, as an incentive
to switch to environmentally friendly and energy efficient
technology. The idea is that this legislation will encourage
the use of these new technologies and reduce the use of
chemicals that are hazardous to the health of all of us. It
will also help prevent contamination of our drinking water,
protect the land on which these dry cleaners exist, and the
legislation is supported by groups such as the Sierra Club and
the Physicians for Social Responsibility.
Mr. Chairman, when these environmentally-beneficial
technologies are available, commercially available, it makes
sense to provide modest incentives for people to use them. That
is the purpose of this legislation. I hope we will be able to
get it through this Committee and through the Senate so that we
can encourage the use of these kind of environmentally-friendly
technologies, which I think are not only important to small
businesses, but important to the environment and the health of
all Americans.
Mr. Chairman, thank you for the time.
Chairman Kerry. Senator Edwards, thank you very much. That
sounds very exciting. I mean, that is exactly the kind of
innovative effort that often needs to break into the
marketplace and it needs some help from good policy to do so. I
congratulate you on that, and I think it is terrific.
Senator Edwards. Thank you.
Chairman Kerry. Mr. Kennard, thank you, sir, for letting us
interrupt you for a moment.
STATEMENT OF BYRON KENNARD, EXECUTIVE DIRECTOR, THE CENTER FOR
SMALL BUSINESS AND THE ENVIRONMENT, WASHINGTON, D.C.
Mr. Kennard. Thank you, and I thank you and Senator Bond
for your leadership on behalf of the small business community.
It is much appreciated.
The Center for Small Business and the Environment was
founded in the belief that many environmental problems can be
solved through innovations that increase efficiency and
resource productivity. As Senator Kerry has pointed out, most
such innovations come from small organizations, not large ones,
and this connection provides a basis for collaboration that
profits small business and helps protect the environment.
For example, a solar water heater can dramatically reduce
the utility bill of a cafeteria or a laundry or any small
business that uses a lot of hot water. Now, chances are, these
water heaters, like many other energy efficient and micropower
technologies, were conceived and designed by a small business
innovator, manufactured by a small manufacturer, and marketed
by a small business. Then to complete the cycle, it is also
likely that such technologies will be installed and serviced by
other small businesses.
I hope this example conveys some sense that small
businesses are also the beneficiaries as well as the innovators
of technologies that are efficient and innovative. In this
connection, I would like to comment on the President's National
Energy Plan. We are urging the energy planners to add a special
focus on small business to the energy plan, something that it
does not have now.
We think that small business has special problems and
opportunities in the energy area. Small businesses are often
most at risk from rising energy costs and uncertain power
supplies. A restaurant can be damaged by a rolling blackout and
its refrigeration lost and employees laid off. They operate on
low-profit margins, and so interrupted service can be a real
disaster.
There are also special opportunities for small business in
the energy area. We see energy efficiency and micropower as
particularly attractive for small businesses. Small businesses
are, by nature, decentralized. Micropower technologies, like
the solar water heater I mentioned, are decentralized
technologies. Micropower fits small business like a glove.
The big issue I think that needs to be addressed, is this:
We don't know how much energy small business as a whole
consumes, but it has got to be vast. There was one study by E
SOURCE done in 1997 that concluded that more than half of all
commercial energy in North America was used by small
businesses, but that doesn't include small business
manufacturers, and as you may know, 85 percent of the
membership of the National Association of Manufacturers are
small and medium businesses. So small manufacturers have got to
be significant users of energy, although nobody, so far as we
know, has estimated the total amount used.
What about energy use by home-based businesses?
Approximately 12 million Americans are now operating businesses
out of homes, basements and garages.
The flip side of this immense energy consumption of small
business is its potential for energy efficiency, and lower
energy consumption means lower bills. So there is a big
motivation for small businesses to become energy efficient.
Small business energy upgrades pay for themselves over
time, and can be put into effect quickly. It doesn't take 2 or
3 years to upgrade a small business. It can be done virtually
overnight with very simple technologies, such as improved
lighting, better thermostats, occupancy sensors in bathrooms,
offices, and storerooms. These things can save small business a
lot of money. One energy efficient exit sign can save $20 a
year, and most small businesses, of course, have more than one.
Finally, reduced energy use by small businesses would
prevent the release of millions of tons of carbon dioxide into
the atmosphere. This would also reduce air pollution from power
plants and conserve natural resources.
As you pointed out, small businesses are the heart and soul
of every American community and they need reliable and
affordable energy supplies to keep their doors open. But just
as important, small business people need a clean and healthy
environment in which to live and work. Unlike big businesses,
small businesses cannot leave town whenever they feel like it.
The plant cannot be closed and moved elsewhere. Small business
people are part and parcel of local communities where they
breathe the air, drink the water, and raise their children.
Thank you.
Chairman Kerry. Thank you very much, Mr. Kennard.
[The prepared statement of Mr. Kennard follows:]
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Chairman Kerry. Mr. Dreessen.
STATEMENT OF THOMAS DREESSEN, CHIEF EXECUTIVE OFFICER, EPS
CAPITAL CORPORATION, DOYLESTOWN, PENNSYLVANIA, ON BEHALF OF THE
EXPORT COUNCIL FOR ENERGY EFFICIENCY, WASHINGTON, D.C.
Mr. Dreessen. Mr. Chairman and Members of the Committee,
thank you for the opportunity to testify before you today
regarding opportunities for small business and the impact of
environmental regulations. I am Tom Dreessen, a small business
entrepreneur who owns several energy service companies called
ESCOs that operate both domestically and internationally.
The ESCO industry is very unique in that it is mostly made
up of entrepreneurs like me that develop, finance, and
implement energy efficiency projects of all technologies and we
risk repayment for our services based on actual achievement of
savings. We are essentially performance contractors that
deliver actual measured emissions reductions through measured
energy savings on the projects that we implement.
Our business model is a win-win proposition for the
business owners themselves by getting savings and for the ESCO
community and for all of the small contractors and service
providers and product manufacturers that we use in our
projects, because our projects are paid from savings, so it is
a win-win strategy for the end-use customer, as well. So we
deliver these emissions and environmental benefits at no cost
to the public at all. It comes right out of the projects and
the savings and the costs that they were already paying to the
utility providers in most cases.
I am or have been a board member on three of the five
founding organizations of the Export Council for Energy
Efficiency, called ECEE, and consequently, I appear before you
today wearing three hats: First, as a small business
entrepreneur; second, as a representative of the U.S. ESCO
industry; and third, as a spokesman for ECEE. So it is quite a
charge that I have today, but my comments will consequently
cover both domestic and international issues because of that
experience.
Given the very limited time, I cannot appropriately cover
the merits of energy efficiency, but I hope all the Committee
Members recognize and embrace its many domestic and
international benefits. Three of those major benefits are
environmental, economic, and a source of electric capacity.
From an environmental perspective, energy efficiency
reduces the demand for burning fossil fuels, which conserves
the nonrenewable resources of oil, coal, and natural gas, and
thus dramatically reduces greenhouse gas emissions and air
pollution, resulting in cleaner air, water, and lower social
welfare costs.
Economically speaking, the simple fact is that energy
efficiency results in reduced energy costs to consumers, like
small businesses, allowing them to not only repay the
investment to achieve the energy efficiency, but also to have
lower operating costs to better compete in a world economy.
As a source of electric capacity, energy efficiency,
studies have shown, if properly funded, has the potential to
displace up to 130,000 megawatts of domestic electric capacity
by the year 2020, which represents about one-third of the
amount of increase that will be needed by that time, and at a
benefit of getting this additional electricity through
efficiency versus through new generation is that it provides
less reliance on foreign sources and an increase to national
security.
Mr. Chairman and Members of the Committee, it is important
to note that ESCOs and similar companies like ESCOs that
develop, finance, and implement energy efficiency projects and
technologies are predominately small contractors and
consultants from the highly skilled engineering and financing
industry. Therefore, as a representative of this small
industry, I feel it is appropriate for me to offer the
following two recommendations for your consideration today.
On the domestic front in the United States, I recommend
that a Federal environmental incentive payment be provided to
energy consumers, including small businesses, who implement
energy efficiency that achieves measured reductions of energy
savings. Incentive payments should be based on the actual
measured energy units reduced from energy efficiency measures
installed. A possible implementation mechanism for funding the
incentive payments could be a Federal public benefits fund,
which I strongly support, with the environmental payment being
included as one of its uses of proceeds. Small energy
efficiency businesses would be able to use this incentive
payment to stimulate energy efficient investment and promote
the related environmental benefits as offsets against
environmental regulation and compliance. Thusly, environmental
regulations serve as an incentive for energy consumers to
achieve savings and reduce emissions to achieve compliance.
On the international front, given the economic and
environmental benefits, along with the insatiable demand for
U.S. energy efficiency technologies overseas, it is recommended
that a minimum of $100 million be funded over the next 3 years
for use by small energy efficiency companies like ESCOs and
other energy companies to develop, finance, and implement
energy efficiency projects in the international markets. The
funding could be provided through ECEE, which has provided
market access for many small companies to large emerging
markets, such as China, Brazil, India, and Mexico, but we
certainly want to stress the fact of keeping the administrative
requirements down and actually getting that market access to
the marketplace.
A second recommendation, a more immediate need is to
restore ECEE's $1 million operating budget for next year, which
after six successful years of operation was eliminated by DOE
in its fiscal year 2002 budget. They work predominately for
small businesses in foreign governments of our competitors in
Japan and Europe. They spend far more than the United States in
supporting the development efforts of their local small energy
efficiency businesses in foreign markets. I have had direct
access and tried to compete against them, and it is
unbelievable, the amount of monies that are funneled to them
through their governments, the small efficiency companies. This
makes the need for Federal funding to small U.S. energy
efficiency companies of higher importance to the vitality of
our economy and, indeed, the world.
In summary, providing new financial support for energy
efficiency improves the environment, increases national
security for reducing reliance on imports of scarce resources
while increasing high-skilled jobs, social welfare, and
economic growth both domestically and internationally. Thank
you for the opportunity to testify today and I am happy to
address any questions that you may have.
Chairman Kerry. Thank you very much, Mr. Dreessen. Very
interesting. I know we will want to follow up on it a little
bit.
[The prepared statement of Mr. Dreessen follows:]
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Chairman Kerry. Mr. Patterson.
STATEMENT OF ED PATTERSON, PRESIDENT, NATURAL ENVIRONMENTAL
SOLUTIONS, INC., ST. LOUIS, MISSOURI
Mr. Patterson. Good morning, Senator Kerry. I thank you and
Senator Bond for giving me the opportunity to express my views
today.
Natural Environmental Solutions is a year-old biotech
company based in St. Louis, Missouri, with four employees. We
recently participated in Missouri's first roundtable meeting to
develop initiatives to further our State's ability to help
attract and grow biotech companies. NES is an environmentally-
friendly company dedicated to solving our air pollution
problems.
We manufacture a product that is derived from seaweed and
other sea plants. It is nontoxic, biodegradable, and safe for
human and animal alike. We utilize genetically-coated microcell
technology to clean the air, water, and land. The applications
for this product grow daily as we talk to members of other
industries.
Because this product is not a masking agent, but removes
the hydrocarbons and gasses from the air, we took the next step
and tested it for the removal of VOCs within Performance Roof
Systems, Incorporated, an asphalt manufacturing company located
in Kansas City, Missouri. Like companies from other industries,
they gather volatile organic compounds from the manufacturing
line and incinerate them utilizing natural gas. Although this
process is effective, it is extremely costly and increases our
national consumption of natural gas.
We tested our material by spraying it directly on the VOCs
within the exhaust stack and turned off the incinerators. Our
results, conducted by an independent lab in Columbus, Ohio,
confirmed that we exceeded the EPA guidelines for clean air
within the roofing industry by removing 90 percent of the VOCs.
This one small plant could heat 1,000 homes per year with the
gas saved and decrease the VOC removal cost by 50 percent.
There are 200 plants within the United States in this industry
alone. The asphalt roofing industry uses $80 million worth of
gas per year.
As a small business, we would like to bring this
environmentally friendly product to market. The testing
required and red tape associated with dealing with regulatory
agencies are two of our biggest obstacles. As with any new
technology, we have found the first obstacle is to change the
mindset of the scientific community. Each corporation we talk
with has an environmental engineer who has never heard of our
technology and frequently is extremely doubtful. They all
demand testing and expect our firm to pay for it. As with
anything new, you have some people willing to test immediately
and others who prefer to take a wait and see approach. These
companies all fear of being shut down for noncompliance of
permits, even though our results meet the standards.
Although Missouri has attracted $22 million of venture
capital funds, they will not look at a product like ours
because it does not have a patent. The inventor of this process
will not file a patent because he does not want to disclose the
process for making it work. This process took 18 years to
develop and we feel confident it cannot be cross-engineered.
We need to have alternate funding for companies that fall
in a gap from conventional methods of financing. Whether by
Federal or State grants, guaranteed bank loans, tax credits, or
all of the above, we need help financing our testing. We also
need to have incentives in place to help companies subsidize
the cost of changing their manufacturing equipment to utilize
new technology instead of using natural gas.
Performance Roof Systems, Incorporated, is ISO-9000
certified and must follow Chapter 643 within the air law of
Missouri. To change to another source, you have to obtain a
construction trial permit, and their red tape to do so is quite
expensive. Simply put, we need to obtain an operating permit
exemption to further test our system and we have not been able
to find out how to do this through city or State offices. We
make calls to explore our options, but no one calls us back.
Our goal is to be put on the EPA's recommended product list and
we need help to do so.
We are excited to promote life sciences within Missouri
because St. Louis, Kansas City, and rural areas all prosper by
promoting this industry. By utilizing our technology, the
environmentalists achieve their goals of clean air.
Manufacturing companies reduce their costs and America will
drastically reduce consumption of natural gas. Everyone wins.
Our products remove VOCs and carbon dioxide from the air by
engulfing it within microcells. Scientists around the world are
concerned about the CO2 gasses in the upper
atmosphere changing weather conditions. We feel we have the
technology to eliminate these gasses from the air and rectify
these problems, but we need funds for testing in order to prove
it will work.
I am enclosing a letter from the president of Performance
Roof Systems, who is a board member for the Roofing
Manufacturers Association, with his concerns.* We agree with
Senator Bond that we need a bipartisan approach to develop or
bring to market technology needed to overcome the environmental
challenge of the next century. Thank you for your time today.
---------------------------------------------------------------------------
* See letter on page 58.
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Chairman Kerry. Thank you very much, Mr. Patterson.
[The prepared statement of Mr. Patterson follows:]
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Chairman Kerry. I thank all the witnesses for keeping their
testimonies to the time. It affords us an opportunity to have a
dialog and that is very helpful.
Senator Snowe, would you like to make any comment before we
proceed to questions?
Senator Snowe. No, that is fine, thank you. I do have a
statement.
Chairman Kerry. Your statement will be placed in the record
as if placed in full.
Senator Snowe. Thank you.
[The prepared statement of Senator Snowe follows:]
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Chairman Kerry. Mr. Patterson, let me just follow up
quickly, simply because your testimony was last, with respect
to a number of questions. First of all, your product is tested
very well, but nevertheless, you have not been able to attract
financing, et cetera. Do you need more tests notwithstanding
that you have exceeded the EPA's guidelines?
Mr. Patterson. Yes.
Chairman Kerry. Why is that?
Mr. Patterson. Well, for instance, while we did independent
testing and we exceeded the EPA guidelines, you need to get
permits in Missouri to begin trials in other facilities. For
instance, there is a roofing manufacturer called Tamko in
Joplin, Missouri. I have contacted them. They have heard about
our testing. They would like to have us test it and they have
the instrumentation in place to do it, but it is going to cost
$30,000 to have this independent testing done and they expect
us to pay for it.
Chairman Kerry. Well, let me ask you this. Obviously,
testing and meeting public approval standards is a component of
R&D. It is a component of product development.
Mr. Patterson. Correct.
Chairman Kerry. You have not sought R&D capital, is that
correct?
Mr. Patterson. Well, we are trying to pursue that at this
time.
Chairman Kerry. Have you been in touch with the SBA itself?
Mr. Patterson. Yes. I am actually trying to look for SBIR
loans. Quite frankly, that is a very lengthy process that we
are just getting involved in.
Chairman Kerry. Several of you, in each of your answers,
have sort of articulated a sense of frustration, if not
indirectly at least implicitly, but I think it is pretty
direct, in the process. The process is annoying to you. I think
several of you have articulated that the red tape somehow gets
in the way. Part of the purpose of these hearings is for this
Committee to be able to start to think about if there is a more
appropriate balance and what we might be able to do to try to
eliminate some of the red tape and facilitate the process.
I have heard from companies all across the country that
part of the problem in bringing new energy efficient products
to market is the regulatory process. Now, when you get
specific, you run up against the hurdle, obviously, of trying
to guarantee that you are still protecting the public
adequately, which is our responsibility also, and balancing it
with the need to move more rapidly and be more user friendly.
Can you give us, each of you or any of you, some thoughts
about places where very quickly that could be done. For
instance, I think it was you, Mr. Bedogne, who suggested the
boilerplate contract. I mean, that is a fast way, obviously,
and I would think a sensible way, to be able to, in certain
size of deals, move the process more rapidly.
I think each of us here hates bureaucracy. I mean,
bureaucracy is the enemy of everybody. It doesn't have a party
label on it. It is a terrible problem and we would love to
facilitate a solution. So could you deal with that a little bit
in each context? Mr. Patterson first.
Mr. Patterson. Well, I would think that if you can go to
your regional EPA office, whatever region you are in, and
submit, quite frankly, independent testing that proves that you
meet the guidelines, that there should be some sort of way to
quicken the process.
Chairman Kerry. You are saying the testing you are being
required to do is duplicative?
Mr. Patterson. Basically, it is duplicative because the
companies themselves are being afraid to be shut down for
noncompliance of permits as well as the results. I have talked
to the State's Attorney General's office and their feeling was,
if you meet the guidelines, that they will not prosecute,
period. So we are not so much in fear of being prosecuted by
them, but if you don't have the right permits in place, EPA can
shut down any of these plants, and that is their biggest fear.
Chairman Kerry. So you think the permitting process itself
needs to be facilitated?
Mr. Patterson. Streamlined, absolutely, and especially for
a process like this, where we have the owner of this company in
the roofing market per se saying, we would like to use this
product because we are going to save 50 percent on our gas
costs. So we are meeting all the guidelines it seems like
everybody wants.
Chairman Kerry. I understand. Mr. Dreessen, do you want to
address that?
Mr. Dreessen. It is a little difficult for me because the
proposals that I am making are fairly new and there are no
existing programs. There is a lot of funding being provided for
international efforts, and what I try to do--one of the things
I am interested in in that $100 million is to remove barriers
for U.S. energy service companies to get U.S. technologies and
products into the marketplace, and there are a lot of barriers
out there and the major one is project financing. There is a
lot of it. We have got Ex-Im Bank, we have got a lot of
agencies, U.S. agencies that are out there doing that. The
unfortunate thing is, they are not structured to meet the needs
to where any energy efficiency companies can access it.
Chairman Kerry. I am very interested to hear you say that
because earlier this year, in the end of January, I made a
proposal that we should create a trading partner/environmental
development fund which the key developed countries ought to be
making available. I believe this serves several purposes.
First, it would help build the consensus for the benefits
on the upside of the trading regime that we are working under,
which is frayed, at least at the edges now, if not more
seriously. That would help us to deal with both the
environmental and then, subsequently, the labor component here
at home.
Second, it advances the interests of all of our small
businesses and all of our technologies in the country by
helping to put them out into the marketplace in an aggressive
way.
Third, obviously, the final benefit is that less developed
countries then are participating within the global climate
change and other kinds of environmental concerns we have, and
in a positive way that helps to satisfy demand here. So I think
it is a win-win-win and it obviously is very much similar to
what you are recommending today.
Mr. Dreessen. Exactly. One of the fundamental issues, if it
could ever be changed, is almost all of our funding mechanisms
that we have in the United States as far as financing require
that repayment is made in hard currency. For those of you who
don't understand, that is a huge barrier in doing anything in a
developing country where then that exposes them to the
devaluation of the local currency. It is a huge barrier. It
really makes the financing not even available. They are not
even interested in it.
Chairman Kerry. Let me interrupt the flow of questions, if
I can, for a moment. Senator Bond has to go to another markup
and I want him to be able to welcome and say a few words about
the next panel, even though it will be a few moments before
they come up.
Senator Bond.
Senator Bond. Thank you very much, Mr. Chairman. I really
appreciate the chance. I was going to very briefly say how much
we appreciate Mr. Stolpman from EPA and Mr. Renberg from the
Ex-Im Bank. I know they have a great deal to do, and some of
the international aspects that Mr. Dreessen was talking about
will be addressed there.
I have just mentioned some of the things that EPA is doing
in Missouri on the thermal depolymerization. I spent all
weekend trying to learn how to say that. I gave it a shot. If
you ever hear of it again, remember, you heard it here first.
But we appreciate the small business witnesses and the
government witnesses. I will have some questions for the
governmental witnesses that I will probably have to submit for
the record. I would rather have them offer their questions
first.
But let me turn in questions first to Mr. Patterson. You
talked about the regulatory burdens, and we are trying to work
with you to help. Do you have any suggestions in what you have
seen of how EPA or the State Department of Natural Resources
could be of more assistance to businesses like yours to
identify and overcome the regulatory hurdles?
Mr. Patterson. I would think that the permit process could
possibly be streamlined, No. 1.
No. 2, within the State of Missouri, it seems that when you
start talking about trying to change anything regarding the air
and the air pollution, they are very hesitant to look at any
new technology or change anything, period. It is almost as
though they are afraid to change. So I guess I would like them
to be a little bit more open minded.
Senator Bond. All right. Mr. Bentley, you mentioned
regulatory barriers. When I came in, you were talking about how
the regulatory hurdles are a significant hindrance. What kind
of hurdles have you encountered specifically and how can we
help to overcome those?
Mr. Bentley. Well, I would go back to my comment that we
are trying to innovate in two very large industries, power
production and in transportation. In power production, of
course, there are incumbents who have a stake in the wire
lines, the generating facilities, and others, and we are trying
to bring micropower, the same concept that was discussed on the
panel discussions, we are trying to bring micropower, which is
a game changer to large generating companies and large
utilities.
The problem is, you have to connect at some point to their
facilities and what you need is a common set of standards for
that interconnection so that they can't be used as barriers by
the incumbents and also safety. We have a pretty high
technology device that involves the use of hydrogen, so you can
imagine that every local fire marshal might have an opinion on
that.
So on both counts, both on safety and interconnection,
there needs to be Federal action to harmonize how you
interconnect with the utilities and how safety for fuel cells,
in particular, a new technology, is dealt with. This has
happened before in things like natural gas vehicles and others
where there has been a national effort to coordinate
regulations and it has been very successful.
So I would recommend that FERC or the Department of Energy
or also the Department of Commerce, they all have efforts
ongoing now to try and harmonize those interconnect standards.
The Europeans and the Japanese are further ahead on that basis
and so they have taken some of the risk--it takes the
commercial risk out of implementing these technologies if you
have surety about implementing them on a local level.
Senator Bond. Thank you. Let me ask the same question of
Mr. Bedogne. How can we help with the----
Mr. Bedogne. I am going to be candid here, if I may.
Senator Bond. Oh, you might as well because it is Wednesday
morning and what better.
Mr. Bedogne. First and foremost, I am a businessman and I
act like a businessman. Our company acts like a businessman. I
don't look at the opportunities that avail us through small
business grants as corporate welfare. I look at it as
opportunities for us to expand our technology. In order for us
to do that, we have to prove that we can bring this to market
and we can actually make this technology work. It costs us
money to do that. So we had to spend our own money and our own
time and resources.
The thing that worked for us is that we didn't start at the
Federal Government level. We started right at the local
government, and the local government has resources available to
us that were beyond my understanding of ``resource''. I mean, I
am not an expert on finding out all the areas that I needed to
go to, so those people helped me, and I will talk to Mr.
Patterson after this to give him some ideas of where to go to
find this, but that is where I started.
Then from the State, we have a very--and our State went
through some major problems in the 1980's. As businesses left,
we had to redevelop and bring people back and they really
focused on job creation and that job creation was funded
through research and development for new product development.
There is one thing that I see that the Government can help
us with is help give us the credit, if you will, for research
and development. Canada gives you dollar for dollar if you
create jobs. We need to get a little more aggressive on how we
create jobs, and if it is coming out of products that work, we
do have some opportunities that are here, that were just
discussed here that are cutting edge, but it takes years for
things to come out.
We chose to be very focused and we went to the Market
Segment where it was going to cause the most concern on the
part of the public. If diesels were polluting here, we could
help prevent that. We could help improve the efficiencies of a
diesel and improve the efficiencies of that engine, cut back on
the consumption of power and also through EGR meet the exhaust
emission to help trap the particulates. So there was some
cutting-edge technology that we chose, but it was something
that we funded and we got help through the State, local, and
then the Federal Government.
I do think that the Government needs to be accessible to
small business so we can can react. I mean, we move. Quickly,
nimbly. We will decide. If we need to buy a test piece, we will
buy it if it makes good business sense. We don't buy it for the
purpose of having another piece of equipment. It is going to
improve our bottom line.
I think if the Government sometimes would act that way and
say, OK, we are going to bring this, much like the Argonne
National Lab deal with DOE, we moved in 6 months where a normal
other transaction or a dual-use takes 2 years. Then the budget
cycle says, ``well, you are going to get funded in October for
our research and development, and remember, we spent just as
much as the Government did.'' We were going to get funded in
October. Well, they approved the grant in January. The funding
doesn't come through. We are spending all our money in that
first year, and if the budget is cut, the small business hurts.
So there are areas that need to be streamlined. Don't
reinvent the wheel, please. But I think you need to go in and
have people like us give you some advice on how we can
streamline it, and I think the regulatory issues are a concern,
our customers are dealing with that. The Caterpillars and the
John Deeres and the Navistars International are dealing with
that in a very proactive way to improve that. We are helping in
that, though, with opportunities to assist in technology.
Senator Bond. Well, we appreciate very much your
willingness to give us that guidance. If you use a little more
soy diesel, people won't complain about the diesel smoke so
much. But we do have things that we work on on this Committee,
SBIR, STTR, those other programs that are designed to provide
that assistance, but the information you give us can be very
helpful.
Mr. Chairman, I thank you and I will leave it to you to
carry on.
Chairman Kerry. Thank you very much, Senator Bond.
Senator Bond. We will look forward to reading the rest of
the testimony of the witnesses. I thank you and apologize for
leaving.
Chairman Kerry. Thank you very much.
Senator Snowe.
Senator Snowe. Thank you, Mr. Chairman. I want to thank the
panel here today for, I think, some very illuminating
testimony. I gather that there is no doubt about the fact that
the Government can play a key role in providing incentives in
some way or providing a supportive role in encouraging small
business to develop these technologies that are environmentally
friendly and energy efficient. Would you all agree that
government can play a role?
[Chorus of yes in response.]
Senator Snowe. Beyond the regulatory burdens, what about
tax incentives? I mean, as a Member of the Senate Finance
Committee--both Senator Kerry and I are both Members of the
Finance Committee and we had a hearing recently on various tax
incentives and proposals to encourage the development of
technologies that are energy efficient.
Mr. Bentley, I know that there is legislation that I have
cosponsored with Senator Lieberman on fuel cells, providing a
$1,000 tax credit for every kilowatt. What would you say about
that kind of approach? Would that be helpful?
Mr. Bentley. Again, it is Wednesday morning, so I guess
candor is the order of the day, Senator Snowe. I have watched
in previous efforts to commercialize fuel cells the use of tax
incentives as a mechanism and I have seen that as somewhat of a
barrier in that it reduces the pressure on companies to become
more cost competitive quickly. So while there is a role for
incentives, I think the danger becomes that those incentives
replace the inexorable drive that you have to have as a small
or large business to take these new technologies and knock the
costs down to where they can compete with traditional
technologies.
So our company does not propose that tax incentives are a
big part of the commercialization effort. We have seen the U.S.
Government as being more effective in taking the risk out of
R&D. So we do differ with some of the other companies in the
fuel cell area, and I would just point to history to say that
those programs in the past have, I think, impeded the drive to
become more cost effective.
Senator Snowe. That is interesting. So you are saying for
example that it would be preferable to have the money for
venture capital money for research and development, to
encourage that.
Mr. Bentley. We have found that the Department of Energy
and the Department of Commerce, in particular, have a pretty
solid staff of people who understand new technology. It is
complex. The ability to make poor choices is there, certainly.
But a good sustained effort, in particular in those two areas,
where you have a legion of technical managers who stay with
these programs for 4 or 5 years, can result in some high-impact
R&D. So I am much more a believer in the front end.
Chairman Kerry. Are you talking about the STTR and SBIR?
Mr. Bentley. Well, actually, I am speaking more about the
programs like the Department of Energy Office of Transportation
Technologies and the ATP within the Department of Commerce.
Those are the two I am most familiar with, where they really do
have people who understand the technology and get the
technology.
So dollar for dollar, I would vote that new technologies--
of course, we are on the cutting edge. It is hard to get
capital for high-risk technologies and that is where the
Government, the Federal Government, has played a role here. I
think as you move more toward commercialization, companies and
investors have to pick up some of the risk.
Senator Snowe. Mr. Bedogne.
Mr. Bedogne. I agree. I think that if the Government can
offset our research and development, we can create jobs. I
think you should tie it back to jobs. I think if you are going
to create jobs to not only improve the communities that you
serve or that you live in, you are winning for everybody.
The issue we have is that we will spend the money for
research and development, and as we had some comments before
the hearing, we did not stop. Even though our sales are down
about 20 percent, the economy is starting to percolate back in
our industry, but for the past 6 months, we didn't cut back on
research and development because we need to stay in touch with
that.
I think you could look at some States that have been
innovative. Michigan has a very obtrusive single-business tax.
But if you create jobs, you get a reduction in that single-
business tax, which has pretty much funded our research and
development facility. We built a 35,000-square foot facility
that cost about $1.6 million, and over the next 10 years,
because of the jobs we created out of that new product
development or the new products, we get a tax credit. I think
the same could work on R&D. We are the ones that are doing the
R&D, not that the organizations that we all alluded to aren't.
We are.
There was one comment on small businesses as far as energy.
We chose to use geothermal energy. We live in the Upper
Peninsula. It is cold. It snows a lot. We have an abundant
source of water. My proper due diligence is that I look at it
as an opportunity. If it makes good business sense, we do it.
Then if I can get a credit or tax break for it, it is a win.
That is just the way we do business.
So I went back and I looked at--you know, geothermal was
hot in the 1980's. It was if you put a geothermal and saved
money, you could get a credit for it. Well, it was sometime in
1990, it was next, and so we didn't get a credit. But we spent
$600,000 on a dehumidification and air conditioning because it
made business sense to do that. It would be nice to get that
credit back for energy efficiency.
Senator Snowe. Would others care to comment? Yes, Mr.
Kennard?
Mr. Kennard. I might say about Senator Edwards' proposal
for tax credits for dry cleaners to get new technology, the dry
cleaning industry is a mom-and-pop industry. They don't have a
lot of cash reserves. There is this superior new technology
available that doesn't use PERC, that is better for workers,
better for consumers, better for the environment, but it is
expensive. It costs like maybe $50,000.
So a tax credit of the sort he described would certainly
encourage a lot of small businesses to buy that new technology
and enable them to do it. My understanding actually is that in
that industry, there are a lot of people trying to decide what
to do, should they go with the new stuff, and so a tax credit
would, I think, encourage them to go ahead and commit to a
superior technology.
Mr. Dreessen. I would like to add, although our energy
services business, we don't really deal in new technologies. We
only implement proven technologies because we are on the hook
for the performance of them. However, having said that, I do
support the R&D. I think that is something we have to do to
stay ahead of the world on our technologies, but I also do it
on the basis of a co-
investment, because I think if both parties don't have money in
the deal, it is a simple business logic, then it becomes when
things start becoming difficult, the one without the money
tends to be less interested.
But one of the common themes, I guess, and I had offered in
my testimony was an environmental incentive payment, and I
think the common theme again is that payments, any benefit
incentive payments, should be based on the delivery of results
and the payment of the benefits incentives should be aligned
with when the benefits are delivered.
I think that is a common theme that I think we believe in
and I think everybody else here does, and I am afraid that
using tax credits as a motivation creates barriers to when a
customer could receive those benefits. I mean, there are timing
issues. Then there are complexities with tax laws that change.
There are just all kinds of additional barriers as opposed to
just a straight incentive, whether it is on employees or
whatever. But the more you can make that benefit received align
with when they deliver whatever the benefit to the environment
is, the better off you are.
Mr. Patterson. I tend to agree. I think the environmental
incentive payments make a lot of sense, at least for a company
as a startup. Tax incentives might be of use to the individuals
that we are going to sell this product to. If they have to
change over their manufacturing lines in order to change from
using natural gas, either a tax incentive or some other sort of
incentive really needs to be in place.
Senator Snowe. Thank you very much. Thank you, Mr.
Chairman.
Chairman Kerry. Senator Snowe, thank you very, very much.
I want to thank the Members of this panel. We are a little
bit truncated because of the pressure, and I apologize for it.
Mr. Bedogne, Senator Levin apologizes personally that he
isn't able to be here because of another hearing. That is the
tension always here. He is very grateful to you for coming and
offering your testimony.
Chairman Kerry. Let me just say to each of you, this is
very, very helpful to us. I know that it is a short time in
terms of the panel, but we are going to leave the record open.
There may well be questions from colleagues. I know I have some
questions I want to submit in writing to amplify on the record.
I will leave the record open for about 10 days. I ask you if
you could supplement the testimony in response to some of the
questions.
We are going to try to build on this. This will not be the
only hearing we are going to have. We are going to try to come
up with a concrete set of proposals, if we can, and follow up
on it. So I am very grateful to each of you for your testimony
today. Thank you.
Chairman Kerry. If I could ask the second panel to come
forward, Mr. Paul Stolpman and Mr. Dan Renberg.
Mr. Renberg, you are the first seated. You are going to
start.
STATEMENT OF DAN RENBERG, MEMBER, BOARD OF DIRECTORS, EXPORT-
IMPORT BANK OF THE UNITED STATES, WASHINGTON, D.C.
Mr. Renberg. Thank you, Mr. Chairman. It is a privilege to
be here. Having worked for Senator Specter, I know the
pressures that you are under, so I will abbreviate my
abbreviated remarks and try to see if I can't get this done in
about 2 minutes so that you can ask questions.
Chairman Kerry. Great.
Mr. Renberg. I am privileged to be here on behalf of the
U.S. Export-Import Bank, as you know. In fiscal year 2000, over
all, we authorized $12.6 billion in financing to support $15.5
billion in sales of U.S. goods and services to foreign markets.
But significantly for your Committee's perspective, 86 percent
of our 2,500 transactions involved small businesses, with the
dollar amount for small business authorizations increasing by
nearly 10 percent to $2.3 billion. We have a very strong
environmental exports program and that is why we had offered to
come up here today to brief you and your colleagues and
actually just to raise awareness.
Overall, the U.S. environmental industry produced $197
billion in revenues in 1999. Environmental exports have doubled
from the United States since 1993, up to $21.3 billion in 1999,
and it runs a surplus. It is one of the few industries where we
are actually running a trade surplus as a Nation.
Ex-Im Bank's story, I think, has been a good one. In 1994,
we financed 13 transactions that were environmentally
beneficial exports, and in the last fiscal year, we were able
to do 65. Now, some of those involve more than one company,
numerous sub-suppliers, but it gives you an idea that we are
experiencing the same kind of growth that the industry is.
However, we know we could be doing so much more and that is why
we are up here today.
The U.S. environmental industry generates less of its
revenues from exports than companies in, say, Japan and
Germany, and a recent study attributed this revenue
differential in part to the fact that the U.S. export industry
is heavily small and medium-sized businesses and they often
perceive risks of international business as well as the higher
costs of developing export sales as impediments to increasing
their export sales earlier. That is where the U.S. Ex-Im Bank
can really come in and play a role. We have several enhanced
financing incentives for environmentally beneficial exports,
which would include renewables as well as air pollution
monitoring systems and the like.
A couple of success stories picked at random, Missouri and
Massachusetts. I am privileged to be able to say in Senator
Bond's absence, I guess, that Environmental Dynamics of
Columbia, Missouri, which is a small business manufacturer of
advanced water and wastewater treatment technologies, received
Ex-Im Bank's 2001 Small Business Exporter of the Year Award in
April at our annual conference. Over the first 22 years of the
company's existence, their sales were mainly domestic. Then
they found us, they found our export credit insurance policies,
and now they have expanded into new foreign markets and they
have increased their workforce from 38 to 63 employees. The
only reason they won this year is because there was no
Massachusetts nominee. I assure you, next year, we will rectify
that.
[Laughter.]
Mr. Renberg. But we have got a potential winner in Krofta
Technologies in Lenox, Massachusetts. I am not sure if you are
familiar with them.
Chairman Kerry. I am familiar with them. Absolutely.
Mr. Renberg. Great.
Chairman Kerry. I have been out there and visited them, as
a matter of fact.
Mr. Renberg. Maybe we can go back together and see exactly
how Ex-Im Bank is helping them. Bank of America has offered two
10-year loans to the Government of the Dominican Republic, with
our guarantee, to win $7.4 million in orders. This took place
just last month--actually, now, 2 months ago--and the orders
were to design and build wastewater treatment plants in three
cities in this country.
I know you read in the newspapers about Argentina and
Brazil and some of the troubling economic issues. We were still
able, nonetheless, to approve recently a solar transaction, a
medium-term loan guarantee, just last month which will go to
rural individual home units. There is a province there where
50,000 people have no electricity, which I guess is like Los
Angeles on a good day. But we are able to find reasonable
assurance of repayment, as the statute requires.
To just conclude, we are very active in Southeastern
Europe. I noted Mr. Dreessen mentioned the hard currency issue,
and one thing I would just mention to him is we are able to
finance now in Euros and in Rands. Rands, because South
Africa's Rand can help us penetrate Sub-Saharan Africa. The
Euro is very helpful in Central and Southeastern Europe. We are
trying to make whatever inroads we can to help businesses, as
Mr. Dreessen said.
I will submit the rest for the record, with your
indulgence.
Chairman Kerry. Thank you, Mr. Renberg. I really appreciate
your sensitivity to that. I was just handed a note that I am
the only amendment at foreign relations, so I have to be there,
so----
Mr. Renberg. You are in the majority now.
Chairman Kerry. Yes, but a quorum is a quorum, and when you
have got it around here, they generally take advantage of it,
so that is the problem.
[The prepared statement of Mr. Renberg follows:]
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Chairman Kerry. Mr. Stolpman, thank you for being with us.
We really appreciate it.
STATEMENT OF PAUL STOLPMAN, DIRECTOR, OFFICE OF ATMOSPHERIC
PROGRAMS, U.S. ENVIRONMENTAL PROTECTION AGENCY, WASHINGTON,
D.C.
Mr. Stolpman. Thank you, Mr. Chairman. Thank you for
inviting me to this very interesting panel discussion. My name
is Paul Stolpman at EPA. I am the Director of the office that
manages many of the voluntary energy efficiency programs and
also the kind of emissions trading programs you mentioned in
your opening statement.
As you know, both the President and Congress on both sides
of the aisle agree that we can all move ahead together to
encourage the private sector and small businesses in particular
to bring innovative technologies to the marketplace, and if we
do that, it will bring particular benefits to our environment.
EPA recognizes the great contribution of small businesses
that they can make in bringing about environmental improvement.
I am pleased to be able to comment on the ways that EPA helps
small businesses bring innovative technologies to market, but
also how we help them use energy efficient technologies in
their daily business.
In my oral statement, I am going to try to provide a brief
summary of my written statement, and I am going to focus on
three areas at EPA and how they interface with the National
Energy Policy Report.
The first area is Energy STAR, which Senator Bond
mentioned. It is a joint EPA-DOE program. We help small
businesses that develop and sell energy efficient technologies
to distinguish their products in the marketplace. The Energy
STAR label makes it easy for consumers and businesses to find
and purchase energy efficient products. All businesses
participating in the Energy STAR program must demonstrate that
their product meets a third-party objective performance
criteria. The Energy STAR program allows small businesses to
leverage the public awareness of the Energy STAR label in
marketing their products.
Over 30 product categories now carry the Energy STAR label.
In the year 2000 alone, over 1,600 manufacturers with Energy
STAR produced 120 million labeled products, contributing to the
more than 600 million products that have been introduced into
the market over the last decade. Small businesses manufacture,
sell, and service many of these products, such as high-
efficiency windows, reflective roof products, residential
lighting fixtures, et cetera.
Second, Energy STAR helps small businesses become more
energy efficient themselves, allowing greater investment.
Remember, we heard an investment in groundsource heat pumps.
They can return the savings from their investments into their
product development. Close to 3,000 small businesses have
partnered with EPA in committing to improve their energy
performance.
Many more have taken advantage of the resources that EPA
makes available to them. Energy STAR provides a website where
small businesses can learn about evaluating their own energy
performance. They can find energy efficient products. They can
find contractors, ask questions, and read about other success
stories in small businesses. Energy STAR also provides guide
books, hotlines, and many other resources to small industry.
Each month, about 6,000 new users, new small business users, go
on our website and about 3,000 of these have already downloaded
a guide book specifically aimed at small businesses.
Recognizing the difficulty in reaching the millions of
small businesses across the country, Energy STAR works with
many organizations that small businesses trust for reliable
information. These include agencies such as the Small Business
Administration and organizations such as the Association for
Small Business Development Centers, U.S. Chambers of Commerce,
and the National Restaurant Association. Through these
relationships, EPA is helping many thousands of small
businesses across the country to recognize the importance of
energy efficiency.
Third, EPA's new green energy program helps small
businesses advance the use of renewable energy technologies.
Partners in this program pledge to switch to renewable energy
for some or all of their energy needs within the next year, and
I am happy to say that 15 percent of all of our partners in
that new program are small businesses.
In closing, Senator, these are just three examples of EPA's
efforts to help small businesses innovate in the marketplace,
which in turn brings about substantial reductions in greenhouse
gases. We likewise encourage small businesses to bring forward
creative solutions to other environmental challenges and help
small businesses understand and comply with environmental
regulations. We look forward to our continuing partnership with
small businesses and to benefiting from their creativity. Thank
you, Mr. Chairman.
Chairman Kerry. Thank you very much, Mr. Stolpman.
[The prepared statement of Mr. Stolpman follows:]
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Chairman Kerry. I appreciate your testimony and I
appreciate your coming up today. It is significant that we have
a representative here from EPA to discuss small business. If we
were to turn to the SBA to have had someone here, we would have
probably had to ask somebody from the Office of Advocacy. I am
not sure where else we would turn within SBA, which is a
statement in and of itself.
You do have a link. There is a link through the website,
but frankly, we had staff go to the link and try to work
through it and I think the lack of an energy site for small
businesses, particularly within the SBA, is a mistake. No. 1,
and we don't have time to discuss it fully now, but I want to
put it on the table that SBA needs to have an energy site.
No. 2, I think the Energy STAR program is a terrific
program. It is a great beginning. I think you are doing pretty
well with it, and certainly the numbers, the number of products
and so forth, is impressive. But, and here is the significant
``but,'' when you measure that against the numbers of consumers
and the numbers of small businesses in the country and the
numbers of opportunities, I think it is really fair to say that
our outreach is simply not where it ought to be.
The SBA outreach on this topic specifically is almost
nonexistent. Let me phrase it this way to be fair. I think it
is incidental. It is not a main mission, it is incidental, and
I don't think it should be parenthetical anymore. I think it
ought to be square, main mission, major effort, because, No. 1,
you can grow so much small business, and create so many jobs
through it. But, No. 2, obviously, you have the benefit of
enhancing participation and the environmental benefits also.
I hope we can work together to try to figure this out.
Maybe we will follow up on this, either publicly through a
hearing process without this kind of pressure, for which I
again apologize, or privately. We can meet on it and see how we
can do this, now that we have a new Administrator coming into
place at the SBA, and ultimately, I think pretty quickly, we
will have these jobs filled.
I would like to see how we could really create a much more
proactive outreach effort, and broadly speaking, how we can get
consumers across the country to be much more tuned in to what
Energy STAR is or means. I mean, I think if you asked anybody
on the street today, it would be the rare person who could link
the program to something meaningful in terms of their
purchases. I regret that, but I think that is probably the
reality. I don't know if you want to comment on that.
Mr. Stolpman. I actually would like to comment on that,
because, in fact, we have done customer surveys. Brand
recognition is dramatically increasing on Energy STAR, in part
because we are working very closely with companies like Sears
and Home Depot and others, because a lot of media is now
running public service ads on Energy STAR. We are getting brand
recognition in the order of 60 percent at this point in time--
--
Chairman Kerry. Well, that is good.
Mr. Stolpman [continuing]. Which is very high. Now, I agree
with you that more outreach is necessary. It is certainly a
goal of ours to increase that public awareness, so we look
forward to working with you, Senator, on that.
Chairman Kerry. We will follow up with you through staff to
try to do it. What I want to try to do is see how we could get
a link with EPA, DOE, and SBA so that there is a real synergy
there. I think it would be helpful to everybody if that were to
happen, a sort of automatic referral process that would take
place for certain kinds of inquiries. Perhaps we could even
develop some kind of working effort to figure out how we
respond to the first panel with respect to some of their
streamlining issues that we really only began to scratch the
surface. But if we could pursue that, I think that would be
very helpful.
I did want to pursue, and I am going to have to put these
questions into the record--I will just state them publicly and
we will follow up, Mr. Renberg--I think, again, what you are
engaged in is terrific and very, very important for us, just
enormously important for the country. Again--I think, as you
have noted, there is much further that we can go. We know that
foreign competitors are receiving a larger percentage of their
sales from exports from the United States. This is a huge
growth industry in Asia, Eastern Europe, Latin America, and
will be on a global basis. So I don't think we want to lag, and
I don't think you do, either.
Mr. Renberg. No.
Chairman Kerry. My sense is, and I think you share this,
that we could build the relationship between SBA and Ex-Im Bank
in positive ways that would really bring a lot of small
businesses to the marketplace--if even through the virtual
marketplace, through cyberspace in their ability to be able to
sell in places they have never thought they could. I think
there is much we could do to augment that, I look forward to
exploring that further with you.
Again, thank you for the preparation you put into your
testimonies. Thank you very much. We stand adjourned.
[Whereupon, at 10:34 a.m., the Committee adjourned.]