[House Hearing, 106 Congress]
[From the U.S. Government Publishing Office]





           THE NATIONAL OILHEAT RESEARCH ALLIANCE ACT OF 1999

=======================================================================

                                HEARING

                               before the

                    SUBCOMMITTEE ON ENERGY AND POWER

                                 of the

                         COMMITTEE ON COMMERCE
                        HOUSE OF REPRESENTATIVES

                       ONE HUNDRED SIXTH CONGRESS

                             SECOND SESSION

                                   on

                                H.R. 380

                               __________

                             APRIL 5, 2000

                               __________

                           Serial No. 106-133

                               __________

            Printed for the use of the Committee on Commerce


                     U.S. GOVERNMENT PRINTING OFFICE
64-064CC                     WASHINGTON : 2000





                         COMMITTEE ON COMMERCE

                     TOM BLILEY, Virginia, Chairman

W.J. ``BILLY'' TAUZIN, Louisiana     JOHN D. DINGELL, Michigan
MICHAEL G. OXLEY, Ohio               HENRY A. WAXMAN, California
MICHAEL BILIRAKIS, Florida           EDWARD J. MARKEY, Massachusetts
JOE BARTON, Texas                    RALPH M. HALL, Texas
FRED UPTON, Michigan                 RICK BOUCHER, Virginia
CLIFF STEARNS, Florida               EDOLPHUS TOWNS, New York
PAUL E. GILLMOR, Ohio                FRANK PALLONE, Jr., New Jersey
  Vice Chairman                      SHERROD BROWN, Ohio
JAMES C. GREENWOOD, Pennsylvania     BART GORDON, Tennessee
CHRISTOPHER COX, California          PETER DEUTSCH, Florida
NATHAN DEAL, Georgia                 BOBBY L. RUSH, Illinois
STEVE LARGENT, Oklahoma              ANNA G. ESHOO, California
RICHARD BURR, North Carolina         RON KLINK, Pennsylvania
BRIAN P. BILBRAY, California         BART STUPAK, Michigan
ED WHITFIELD, Kentucky               ELIOT L. ENGEL, New York
GREG GANSKE, Iowa                    TOM SAWYER, Ohio
CHARLIE NORWOOD, Georgia             ALBERT R. WYNN, Maryland
TOM A. COBURN, Oklahoma              GENE GREEN, Texas
RICK LAZIO, New York                 KAREN McCARTHY, Missouri
BARBARA CUBIN, Wyoming               TED STRICKLAND, Ohio
JAMES E. ROGAN, California           DIANA DeGETTE, Colorado
JOHN SHIMKUS, Illinois               THOMAS M. BARRETT, Wisconsin
                                     BILL LUTHER, Minnesota
                                     LOIS CAPPS, California

                   James E. Derderian, Chief of Staff

                   James D. Barnette, General Counsel

      Reid P.F. Stuntz, Minority Staff Director and Chief Counsel

                                 ______

                    Subcommittee on Energy and Power

                      JOE BARTON, Texas, Chairman

MICHAEL BILIRAKIS, Florida           RICK BOUCHER, Virginia
CLIFF STEARNS, Florida               KAREN McCARTHY, Missouri
  Vice Chairman                      TOM SAWYER, Ohio
STEVE LARGENT, Oklahoma              EDWARD J. MARKEY, Massachusetts
RICHARD BURR, North Carolina         RALPH M. HALL, Texas
ED WHITFIELD, Kentucky               FRANK PALLONE, Jr., New Jersey
CHARLIE NORWOOD, Georgia             SHERROD BROWN, Ohio
TOM A. COBURN, Oklahoma              BART GORDON, Tennessee
JAMES E. ROGAN, California           BOBBY L. RUSH, Illinois
JOHN SHIMKUS, Illinois               ALBERT R. WYNN, Maryland
HEATHER WILSON, New Mexico           TED STRICKLAND, Ohio
JOHN B. SHADEGG, Arizona             PETER DEUTSCH, Florida
CHARLES W. ``CHIP'' PICKERING,       RON KLINK, Pennsylvania
Mississippi                          JOHN D. DINGELL, Michigan,
VITO FOSSELLA, New York                (Ex Officio)
ED BRYANT, Tennessee
ROBERT L. EHRLICH, Jr., Maryland
TOM BLILEY, Virginia,
  (Ex Officio)

                                  (ii)


                            C O N T E N T S

                               __________
                                                                   Page

Testimony of:
    Allen, Don, President, E.T. Lawson and Sons..................     3
    Woosnam, Douglas, Director of Public Affairs, Allenergy 
      Marketing Company, LLC.....................................     6

                                 (iii)

  

 
           THE NATIONAL OILHEAT RESEARCH ALLIANCE ACT OF 1999

                              ----------                              


                        WEDNESDAY, APRIL 5, 2000

                  House of Representatives,
                             Committee on Commerce,
                          Subcommittee on Energy and Power,
                                                    Washington, DC.
    The subcommittee met, pursuant to notice, at 11:30 a.m., in 
room 2322, Rayburn House Office Building, Hon. Joe Barton 
(chairman) presiding.
    Members present: Representatives Barton, Shimkus, Wilson, 
Bryant, Ehrlich, McCarthy, Sawyer, Markey, Boucher, Pallone, 
Wynn, and Strickland.
    Staff present: Cathy Van Way, majority counsel; Jason 
Bentley, majority counsel; Elizabeth Brennan, legislative 
clerk; Sue Sheridan, minority counsel; and Rick Kessler, 
professional staff member.
    Mr. Barton. The subcommittee will come to order on the next 
hearing as soon as we get our witnesses in attendance. Members 
are strongly urged to stay for the next hearing.
    If we could, if, Mr. Ehrlich and Mr. Shimkus, if y'all wish 
to converse with our past panel, if you will leave the hearing 
room so we can start this hearing.
    Today we are going to hold a legislative hearing on H.R. 
380, the National Oilheat Research Alliance Act, introduced on 
January 19, 1999, by Congressman Greenwood of Pennsylvania, a 
member of the full committee, not a member of the subcommittee.
    I want to welcome our two panelists to the hearing on this 
legislation.
    This bill, as introduced by Mr. Greenwood, would allow the 
heating oil industry to establish an oilheat check-off fee to 
fund research, development and consumer education programs 
related to heating oil. As was brought home to Members of 
Congress this past winter, heating oil plays an important role 
in keeping homes and businesses warm in the winter in many 
parts of the country, especially in the Northeast.
    The purpose of the legislation before the subcommittee 
would be to give this industry greater resources to undertake 
research and development activities targeted at finding new and 
more efficient ways to use heating oil. Significantly, the bill 
which was proposed by the oilheat industry does not require the 
expenditure of significant amounts of Federal dollars.
    I want the panelists to know and the members of the 
subcommittee to know that the chairman of the subcommittee, 
myself, has very serious reservations about this legislation. I 
really don't see, if the heating oil industry wants to 
establish this type of fund, it needs Federal legislation to do 
so. If it is as widely supported by the heating and oil 
industry as it is claimed to be, there would be no need for 
legislation making contributions to the fund mandatory.
    I am also concerned that the fee becomes another surcharge 
that will be passed on to consumers. Although the amount of the 
fee is small, it does raise the price of heating oil at a time 
when some consumers are having difficulty meeting the price 
that they already have to pay.
    Finally, I would like to see as we take testimony what the 
assurances are that the money raised by the fee is going to be 
used as intended by the legislation. Recently, a Washington 
Post newspaper article highlighted the potential for abuse with 
these types of fees when there is not sufficient 
accountability. I understand supporters of the legislation are 
also concerned about the potential for abuse and that they are 
taking steps to address it.
    Today's hearing is an important hearing. A fair number of 
members of the subcommittee and full committee on both sides of 
the aisle have cosponsored this legislation, and Congressman 
Greenwood has been very cooperative in trying to address some 
of the concerns that I have raised, and the primary reason we 
are holding the hearing is because Congressman Greenwood has 
been such an advocate of this legislation and has been very 
cooperative in trying to work out some of the concerns.
    The chair would recognize Mr. Sawyer for an opening 
statement if he wishes.
    Mr. Sawyer. Mr. Chairman, I appreciate the opportunity and 
will forego it.
    Mr. Barton. Would the gentleman from Illinois, Mr. Shimkus, 
wish to be recognized for an opening statement?
    Mr. Shimkus. It is part of what I submitted for the first 
hearing.
    Mr. Barton. Gentleman from Maryland, Mr. Wynn, for an 
opening statement.
    Mr. Wynn. Thank you, Mr. Chairman.
    I am not going to make an opening statement, but I will say 
that I had a line of concerns similar to yours with respect to 
why this industry-based project needs a Federal imprimatur. So, 
with that, I yield.
    Mr. Barton. I thank the gentleman from Maryland.
    The gentleman from New Jersey, Mr. Pallone, who I believe 
is a sponsor of the legislation, would you like to be 
recognized for a opening statement?
    Mr. Pallone. Thank you, Mr. Chairman.
    Just briefly, as you mention, I am a cosponsor and 
supporter of the bill. The Act, the National Oilheat Research 
Alliance Act, would enable the oilheat industry to establish an 
industry-funded check-off program that supports industry 
research and development, safety training and consumer 
education without Federal funding. Just in my own district, we 
have about 815,000 households--that is State-wide, I should 
say--that use oilheat and about 215,000 occupied housing units 
in my district that use oilheat. And, of these, about 20 
percent--they amount to about 20 percent of the total, and 
there are about 409 oilheat businesses that employ about 4,000 
people. So I only mention these numbers because they represent 
substantial employment and heating consumption figures.
    The legislation before us today would not require any 
support from the Federal Government. It is only enabling 
legislation. The NORA legislation, as I understand it, also is 
virtually identical to legislation that was unanimously passed 
by the House and Senate Commerce Committees in 1996. That is 
the Propane Education and Research Act that this is modelled 
after. And, of course, that Propane Act was subsequently 
enacted by Congress and signed into law. So I think they are 
using that as a model, and that certainly has served us well, 
and I think we could do the same for this industry and help 
them in their research efforts.
    I would support the bill and thank you for the time, Mr. 
Chairman.
    Mr. Barton. I thank the gentleman from New Jersey.
    Welcome, gentlemen. It is always the case that the second 
hearing or the second panel doesn't have the attendance that 
the first. Plus, we are beginning to push the lunch hour, but 
there is actually quite a bit of interest and support for the 
legislation that you two gentlemen are here to testify. So 
don't take the lack of panelists as a lack of interest.
    We are going to put your statements in the record in their 
entirety. We will recognize Mr. Allen for 7 minutes to 
summarize his, and then we will recognize Mr. Woosnam.
    So, Mr. Allen, we want to welcome you to the subcommittee. 
Your statement is in the record in its entirety, and you are 
recognized for 7 minutes to elaborate on it.

    STATEMENT OF DON ALLEN, PRESIDENT, E.T. LAWSON AND SONS

    Mr. Allen. Chairman Barton and members of the subcommittee, 
my name is Don Allen; and I appreciate this chance to testify 
in support of H.R. 380, the National Oilheat Research Alliance 
Act. I am President of E.T. Lawson, a company based in Hampton, 
Virginia, that distributes heating oil. I also serve as cochair 
of the legislative NORA effort and am Vice President of the 
Petroleum Marketers Association, our national trade 
association.
    On behalf of PMAA and the heating oil industry, I am 
pleased to share with you our strong support for H.R. 380. The 
NORA legislation is modeled after the propane check-off program 
that was approved by this committee and enacted into law in 
1996. Like the propane bill, H.R. 380 would allow for an 
industry-funded check-off program in which a small portion of 
the wholesale price of oilheat will be used to support 
activities such as research and development, safety, training 
and consumer education, all without Federal funding or 
involvement.
    As in the case of the propane check-off, the NORA program 
will provide substantial benefits to our industry and its over 
30 million consumers. NORA will promote energy efficiency and 
consumer and worker safety, all of which will help to lead to 
lower fuel costs and a cleaner environment. The NORA 
legislation also will create parity for our industry.
    Unfortunately, the heating oil industrial, unlike our main 
competitors, currently does not benefit from a nationwide 
industry program. By way of explanation, our industry is made 
up of over 7,000 small businesses that employ almost a quarter 
of a million workers. These businesses are small, family owned 
enterprises that compete against each other and other sources 
of fuel to meet the energy needs of millions of consumers. The 
diverse nature of our industry means that no single company or 
no 10 single companies or no 50 single companies has enough 
market share to fund these needs.
    NORA is a fair, self-help measure that will enable our 
industry to compete on a level playing field with other energy 
sources.
    As you know, Mr. Chairman, the House of Representatives 
passed a measure almost identical to H.R. 380 in the last 
Congress, but the Senate did not consider the legislation 
before the 105th Congress adjourned. The Senate has now 
unanimously approved NORA in this session of Congress. As the 
NORA legislation goes through the House the second time, it 
continues to have the support of virtually every local, State, 
regional and national trade association affiliated with our 
industry.
    In addition to solid industry support, H.R. 380 has been 
endorsed by many notable third parties, including consumer, 
environmental and labor groups. H.R. 380 also has broad 
bipartisan support from 128 House cosponsors, including a 
majority of the members of this subcommittee.
    In summary, NORA will help create a level playing field by 
providing the heating oil industry with the same type of 
programs that competing energy sources enjoy. The program 
requires no Federal funding and essentially no Federal 
involvement, and the bill will benefit consumers as well as the 
environment. Given the broad-based bipartisan support for H.R. 
380 from both within and outside of our industry, we hope that 
the House of Representatives will act swiftly to pass this 
important legislation just as it did in 1998.
    Thank you, Mr. Chairman, for holding this hearing and 
allowing me to share my support for this bill.
    [The prepared statement of Don Allen follows:]
 Prepared Statement of Don Allen on Behalf of the Petroleum Marketers 
   Association of America and The National Oilheat Research Alliance
    Chairman Barton and Members of the Subcommittee, my name is Don 
Allen and I appreciate this chance to testify in support of HR 380, the 
National Oilheat Research Alliance Act. I am president of E.T. Lawson, 
a company based in Hampton, Virginia that distributes heating oil. I 
serve as co-chair of the Legislative Action Committee for the NORA 
Alliance, which is a coalition of marketers and distributers of heating 
oil who strongly support HR 380. I am also the regional vice chairman 
of the Petroleum Marketers Association of America (PMAA).
    On behalf of PMAA and the heating oil industry, I am pleased to 
share with you our strong support for HR 380. To summarize, HR 380 will 
help our industry compete on a level playing field with other energy 
sources that already national, industry programs like NORA; it is a 
fair, self-help measure that requires no federal funding or basically 
no federal involvement; and it will provide important benefits to the 
millions of American consumers of heating oil and it will benefit the 
environment.
HR 380 Is Based on a Successful Law and Has Solid Support from Every 
        Segment of the Heating Oil Industry and Respected Third Parties
    The NORA legislation is modeled after the propane check-off program 
that was approved by this Subcommittee and the House Commerce Committee 
before being enacted into law in 1996. Using that program as a model, 
we have tried to provide as much flexibility as possible to those who 
will participate in the NORA check-off program.
    Like the propane bill, HR 380 would allow for an industry-funded 
check-off program in which a small portion of the wholesale price of 
oilheat will be used to support activities such as research and 
development, safety, training, and consumer education--all without 
federal funding or involvement. As in the case of the propane check-
off, the NORA program will provide substantial benefits to our industry 
and its millions of consumers. NORA will promote energy efficiency and 
consumer and worker safety that will help lead to lower fuel costs and 
a cleaner environment.
    Our industry and legislators, including Chairman Bliley and 
Congressman Greenwood, have worked long and hard to craft a compromise, 
non-controversial bill. HR 380 is the product of these efforts. To 
reach a consensus on the NORA legislation, we have consulted 
representatives of every competing energy source, as well as both the 
U.S. Department of Energy and the Department of Justice.
    As you know, Mr. Chairman, the House of Representatives passed a 
measure almost identical to HR 380 in the last Congress, but the Senate 
did not consider the legislation before the 105th Congress adjourned. 
The Senate has now unanimously approved NORA in this session of 
Congress.
    As the NORA legislation goes through the House for the second time, 
it continues to have the support of virtually every local, state, 
regional, and national trade association affiliated with our industry 
including PMAA, 25 state trade associations, labor unions and many 
other industry groups. In fact, we have conducted surveys that show 
powerful industry support for an industry-financed check-off program. A 
professional polling firm conducted a nationwide survey of the industry 
in 1997 and found that 96% of the industry supports creation of a 
program like NORA. Our industry has long-held a strong desire to 
develop the means to support R & D, improve safety and training, and 
provide consumer education--all without unnecessary involvement of the 
federal government. The NORA check-off program is just the type of 
program that will accomplish our industry's objectives.
    In addition to the strong industry support for NORA, HR 380 also 
has been endorsed by many notable third parties, including the Consumer 
Energy Council of America Research Foundation, the National 
Environmental Policy Institute, the Fiberglass Tank & Pipe Institute, 
and the International Brotherhood of Teamsters. HR 380 also has broad, 
bipartisan support from 128 House cosponsors, including a majority of 
the members of this Subcommittee.
NORA Will Support Parity for the Heating Oil Industry
    Currently, the heating oil industry, unlike our main competitors, 
does not benefit from a nationwide industry program. Our industry is 
made up of over 7,000 businesses that employ almost 250,000 workers. 
These businesses are small, family-owned enterprises that compete 
against each other and other sources of fuel to meet the energy needs 
of millions of consumers. The diverse nature of our industry means that 
no single company has a large enough stake to fund such a program. NORA 
is a fair, self-help measure that will enable our industry to compete 
on a level playing field with other energy sources.
    Oilheat's main competitors have long-benefited from nationwide 
industry programs that the federal government has either established or 
supported. These programs support many of the same activities that we 
hope to undertake under NORA. The Gas Research Institute (GRI), for 
example, conducts a variety of industry activities, including R & D, 
that are designed to benefit gas consumers and the industry. GRI, which 
was traditionally funded and supervised under the Federal Energy 
Regulatory Commission's regulatory authority, has been very successful 
at helping the natural gas industry meet its important needs.
Operation of the NORA Check-off Program
    The NORA check-off program will support research and development, 
safety, training, and consumer education--all important activities that 
the oilheat industry greatly needs to address. These activities will 
help lower consumers' energy bills, and they will help create a cleaner 
environment.
    Under HR 380, the check-off program will only go into effect if 
industry support is fully documented through the referendum process. 
After the legislation becomes law, a referendum will be conducted among 
oilheat retail marketers and wholesale distributors to authorize the 
creation of the check-off and the ``National Oilheat Research 
Alliance'' to manage the program for the industry. The industry 
organization will cover the costs of the referendum, although it will 
be reimbursed with check-off funds if the Alliance is established.
    For the NORA check-off program to go into effect, two-thirds of 
those voting in both the retail marketer class and wholesale 
distributor class must vote their approval. The total volume of oilheat 
sold to consumers or the total volume of dyed distillate sold at the 
terminal rack during the previous year or other similar period will 
determine the voting rights among retail marketers and wholesale 
distributors respectively. Once the NORA check-off is established, a 
majority vote of both classes can terminate the program. If individual 
states do not wish to participate in the program, they may opt out of 
it.
    Following the approval of the industry, the qualified industry 
organization will select 61 members for the board of the National 
Oilheat Research Alliance. These members will represent all segments of 
the heating oil industry. No more than 11 Alliance members will be 
selected each year to serve as an Executive Committee which will manage 
the Alliance and coordinate the check-off operations.
    The NORA program allows a small portion of the wholesale price of 
oilheat to be collected and used to fund key industry activities. H.R. 
380 provides for an assessment of $.0020 per gallon of dyed distillate 
or number one distillate.
NORA Will Provide Important Benefits for Our Industry, Its Consumers, 
        and the Environment
    The NORA program promises to provide direct benefits for our 
industry, its consumers, and the environment. HR 380 outlines several 
key areas of focus including research and development, safety, 
training, and consumer education needs.
    In particular, check-off funds will support research and 
development of new technologies and more efficient equipment and 
appliances. It will also help our industry provide employee and 
consumer training and safety efforts, as well as key consumer outreach 
initiatives, including cooperative advertising with state associations 
and builder outreach.
    Under NORA, our industry will be able to cooperate with top 
research facilities--including universities and laboratories--to 
develop ground-breaking technologies. In turn, NORA will help our 
industry by enabling members to share research discoveries with the 
market through information, new products, and new systems. Advances in 
areas such as fuels and fuel quality, venting systems, heat transfer 
technology, and system engineering will help to increase efficiency and 
improve equipment usage. In turn, both American consumers and oilheat 
companies will benefit from lower costs. As R & D leads to cleaner 
fuels and more efficient equipment, the environment will also benefit 
from NORA and the important advances that this program will pioneer.
    In summary, NORA will help create a level playing field by 
providing the heating oil industry with the same type of program that 
competing energy sources enjoy, the program requires no federal funding 
and essentially no federal involvement; and the bill will benefit 
consumers, as well as the environment. Given the broad-based, 
bipartisan support for HR 380 from both within and outside of our 
industry, we hope that the House of Representatives will act swiftly to 
pass this important legislation, just as it did in 1998.
    Mr. Chairman, thank you for holding this hearing and for allowing 
me to share our strong support for HR 380.

    Mr. Barton. Thank you, Mr. Allen, and thank you for being 
brief in your testimony. We appreciate that.
    We would now like to recognize Mr. Woosnam. Your statement 
is in the record, and you are recognized for up to 7 minutes to 
elaborate on it.

   STATEMENT OF DOUGLAS WOOSNAM, DIRECTOR OF PUBLIC AFFAIRS, 
                ALLENERGY MARKETING COMPANY, LLC

    Mr. Woosnam. Thank you, Mr. Chairman.
    My name is Doug Woosnam. I live in New Hope, Pennsylvania.
    I presently work for ALLEnergy Marketing Company. Our 
company's retail operations serve approximately 73,000 
residential customers and seven of the Mid-Atlantic and 
Northeast States plus the District of Columbia. We deliver over 
95 million gallons of home heating oil, 4 million gallons of 
propane and over 200 million gallons of gasoline, diesel and 
other petroleum products. We also market natural gas to homes 
and businesses from New Jersey to New Hampshire and operate 
wholesale terminals that provide supply to other retail heating 
companies in our region.
    I am here to share our strong support for the NORA 
legislation, the National Oilheat Research Alliance Act, H.R. 
380, and to thank my Congressman, Jim Greenwood, for sponsoring 
this important legislation.
    We are also very grateful to Chairman Bliley for his 
continued support of our efforts and to you, Mr. Chairman, for 
holding today's hearing. We also appreciate the assistance that 
many members of this committee have pledged to H.R. 380, 
including the support of 17 subcommittee members who have 
cosponsored this legislation.
    This bill represents the years of hard work that our 
industry has spent in developing an industry-financed program 
to support research and development, safety, consumer education 
and other key initiatives. Through the NORA program, our 
industry will be able to meet its most vital needs through its 
own efforts, with minimal government involvement and no 
government cost. We are enthusiastic about the benefits that 
the NORA program will provide for our industry and the 30 
million Americans who use heating oil.
    H.R. 380 is essentially identical to a bill that the House 
passed unanimously in 1998 after being considered by this 
subcommittee and the full Commerce Committee but which, 
unfortunately, was not considered by the Senate before the end 
of the 105th Congress. In November, 1999, the Senate considered 
and unanimously approved its companion version of the NORA 
legislation. Now that the Senate has acted, we are hopeful that 
the House of Representatives will take swift action to pass the 
NORA legislation once again.
    The NORA program promises to benefit consumers in a number 
of ways. For example, one of the most important aspects of the 
NORA program is that it will enable our industry to fund 
important research and development efforts.
    A 1997 report conducted by Brookhaven National Lab for the 
United States Department of Energy outlined a comprehensive 
research agenda for the development of more efficient burning 
equipment, more effective heat transfer technology and other 
similar activities. As the report notes, the innovations that 
will help result from our R&D efforts financed by NORA will 
help reduce consumers' fuel bills by increasing energy 
efficiency through better fuel quality and more efficient 
burners. The BNL report also points out that these advances in 
fuel efficiency will help create a cleaner environment.
    As the National Environmental Policy Institute has also 
noted, NORA-financed research and development will lead to 
improved fuel quality, more efficient equipment and improved 
heat transfer devices, all of which will produce substantial 
environmental benefits.
    NEPI is one of the many diverse organizations--including 
the Consumer Energy Council of America, labor unions, the 
propane industry and other industries and organizations--that 
have endorsed the NORA legislation.
    As I have just noted, the NORA legislation has been 
endorsed by the Consumer Energy Council of America; and we are 
very pleased that the Nation's oldest public interest energy 
policy organization has recognized that NORA will lead to 
impressive benefits for consumers of heating oil.
    In the area of consumer education, NORA-financed outreach 
will help consumers in a number of ways--a simple reminder to 
customers to tune up their equipment each year or notifying 
them of new technology improvements that could save them a 
significant amount of money. Obviously, safety and training 
activities focused both on the industry employees and consumers 
will also provide significant benefits to the consumer and the 
industry and all States in which oilheat is utilized.
    With your permission, Mr. Chairman, I would like to include 
the Consumer Energy Council's endorsement letter into the 
record.
    To conclude, we believe that H.R. 380 will create tangible 
benefits for our industry--more importantly, its consumers and 
the environment.
    Thank you again, Mr. Chairman, for the opportunity to 
testify here today.
    [The prepared statement of Douglas Woosnam follows:]
  Prepared Statement of Douglas Woosnam, Director of Public Affairs, 
                      AllEnergy Marketing Co., LLC
    Mr. Chairman and Members of the Subcommittee, I am Doug Woosnam, I 
live in New Hope, PA and I presently work for AllEnergy Marketing Co., 
LLC. Our company's retail operations serve approximately 73,000 
residential customers in 7 of the Mid-Atlantic and Northeast states 
plus the District of Columbia. We deliver over 95 million gallons of 
home heating oil, 4 million gallons of propane and 200 million gallons 
of gasoline, diesel and other petroleum products. We also market 
natural gas to homes and businesses from New Jersey to New Hampshire 
and operate wholesale terminals that provide supply to other retail 
heating oil companies in our region.
    I am here to share our strong support for the National Oilheat 
Research Alliance (NORA) Act, H.R. 380, and to thank my Congressman, 
Jim Greenwood, for sponsoring this important legislation. We are also 
grateful to Chairman Bliley for his continued support of our efforts, 
and to you, Mr. Chairman, for holding today's hearing. We also 
appreciate the assistance that many members of this subcommittee have 
pledged to HR 380, including the support of the 17 subcommittee members 
who have cosponsored this legislation.
Background of HR 380: Both the House and Senate Have Already 
        Unanimously Approved NORA--But in Different Sessions of 
        Congress
    This bill represents years of hard work that our industry has spent 
in developing an industry-financed program to support research and 
development, safety, consumer education, and other key initiatives. 
Through the NORA program, our industry will be able to meet its most 
vital needs through its own efforts, with minimal government 
involvement and at no government cost. We are enthusiastic about the 
benefits that the NORA program will provide for the heating oil 
industry and the 30 million American consumers of heating oil.
    HR 380 is essentially identical to a bill that the House passed 
unanimously in 1998 after being considered and approved by this 
subcommittee and the full Commerce Committee. Unfortunately, time ran 
out in the 105th Congress before the Senate could consider the 
legislation. In 1999, the Senate considered and then unanimously 
approved its companion version of the NORA legislation. Congressman 
Greenwood reintroduced his NORA measure in January and HR 380 now has 
128 cosponsors, almost evenly divided between republicans and democrats 
from diverse geographic parts of the country.
NORA is Modeled on Established Law--The Successful Propane Check-off 
        Program
    HR 380 is nearly identical to the check-off program for propane 
which was enacted into law in 1996 (The Propane Education and Research 
Act of 1996 (PERA), Public Law 104284 (15 U.S.C. 6401, et seq.)). NORA 
is basically the same check-off legislation, with some slight 
modifications to account for the differences between the two types of 
fuel, and with some adjustments made to make the program more flexible. 
For example, the NORA check-off program is only intended to operate in 
the 24 states that have the highest levels of heating oil consumption. 
HR 380 calls for a referendum in each of these states in order to 
provide flexibility for those in the industry. If a state does not wish 
to participate in the NORA program, it can simply decline to conduct a 
referendum or it can defeat the referendum. In this way, industry 
participants and individual states can determine whether or not they 
wish to be participants in the NORA check-off program.
    The recent, substantial success of the propane check-off program 
provides further support for our view that the NORA program will help 
the heating oil industry provide direct, tangible benefits for 
consumers. After a vast majority of both the producer and retail 
marketer classes voted in favor of the propane check-off, the Propane 
Education and Research Council (PERC) went into effect in July 1997. 
After nearly three years in operation, the program continues to have 
overwhelming industry support, and for good reason. Funds from the 
propane check-off have been used to address many of the industry's most 
vital research, development, safety, training, and consumer education 
needs.
    PERC has used assessed funds to support a number of programs, 
including, for example, the production and widespread distribution of 
an educational video that is designed to ensure compliance with new 
safety guidelines for the propane industry. The video illustrates how 
to safely satisfy the new guidelines for overfilling prevention devices 
(OPD) which are devices that are intended to improve customer safety. 
Through programs such as this one, the propane check-off program has 
provided great benefits to the industry and propane consumers. There is 
every reason to believe that the NORA check-off program would enjoy the 
same success.
NORA Will Support Vital Industry Needs, Including Research and 
        Development Efforts, That Will Benefit Consumers and The 
        Environment
    One of the most important aspects of the NORA program is that it 
will enable our industry to fund much-needed research and development 
efforts. A 1997 report conducted by the Brookhaven National Laboratory 
for the U.S. Department of Energy outlines a comprehensive research 
agenda for the development of more efficient burning equipment, more 
effective heat transfer technology, and other similar activities. The 
BNL report identifies a number of fields of research that will help 
improve reliability, maintenance, and efficiency. In particular, the 
report identifies fuel quality research, equipment diagnostics-service 
tools, and venting research that would help improve equipment 
performance and efficiency. As the report notes, the innovations that 
will result from R & D efforts financed by NORA will help reduce 
consumers' fuel bills by increasing energy efficiency through better 
fuel quality and more efficient burners.
    In fact, the BNL report concluded that the NORA program ``will 
provide economic support to millions of American households by reducing 
fuel bills and thousands of small family businesses in the United 
States who will gain from having satisfied consumers and reduced 
operating costs.'' According to BNL, consumers will receive a high rate 
of return for each dollar spent since R & D will increase efficiency 
and improve heat transfer technology. Further, the NORA program will 
lower maintenance, repair, and service costs by improving training for 
service technicians. The BNL report also points out that these advances 
in fuel efficiency will help create a cleaner environment.
    The National Environmental Policy Institute has also noted that 
NORA-financed research and development will lead to improved fuel 
quality, more efficient equipment, and improved heat transfer devices--
all of which will produce substantial environmental benefits. NEPI is 
one of the many diverse organizations--including the Consumer Energy 
Council of America, labor unions, and the propane industry--that has 
endorsed the NORA legislation.
    The endorsement of the Consumer Energy Council of America (CECA), 
which is the nation's oldest public interest energy policy 
organization, is especially important to us. CECA has recognized that 
NORA will lead to impressive benefits for consumers of heating oil. In 
the area of consumer education, for example, NORA-financed outreach 
will help consumers in a number of ways. A simple reminder to customers 
to have their equipment tuned up, or notifying them of new technology 
improvements, could save customers a significant amount of money. 
Obviously, safety and training activities (focused both on industry 
employees and on consumers) also will provide significant benefits to 
the consumer and the industry in all states in which oilheat is 
utilized.
    To conclude, we believe that the NORA program contemplated in HR 
380 will provide the best means for allowing our industry to finance 
research and development, training, safety and consumer information 
without the use of tax dollars or a government bureaucracy. In turn, 
these activities will create tangible benefits for our industry, its 
consumers, and the environment.
    Thank you again, Mr. Chairman, for the opportunity to testify 
today.

    Mr. Barton. Thank you, Mr. Woosnam.
    If this were not a democracy, I could say there is a quorum 
and move the bill right now. That wouldn't be fair.
    I am going to recess briefly, go vote. I should be back 
within 10 minutes.
    We are in recess for approximately 10 minutes. I would ask 
our witnesses to stay close to the hearing room because as soon 
as we get back we will try to have the questions.
    [Brief recess.]
    Mr. Shimkus [presiding]. Okay. We will call this hearing 
back into session.
    I will begin with my 5 minutes of questioning, and we will 
see if any of my colleagues come back, and, if not, then we 
will be finished.
    Really, I have a series of four questions that I would like 
for you both to address, and we will see how far I get along in 
the process.
    First question, would you please explain how rural 
consumers of heating oil, including farmers and ranchers, would 
be affected by the NORA program?
    Mr. Woosnam. This program is only designed to affect those 
people who consume the product for heating fuels. So a farmer 
who uses diesel for their tractors or equipment and other 
nonheating purposes would not be included, would not be 
affected, would not pay.
    Mr. Allen. But those residents in rural areas who use home 
heating oil to heat would receive the same benefits as urban 
and suburban dwellers. They would receive benefits from the 
research and development that would create new products. It 
would be more efficient and better for the environment. They 
would receive benefits from the training that could be provided 
to small businesses that serve those rural farmers and 
ranchers. You know how small businesses are when it comes to 
training. There are no line items in their budget for that to 
consider that function. They will benefit just like our 
suburban and urban users.
    Mr. Shimkus. Very good.
    In the testimony that we had and some of the written 
testimony, it was stated that there is a substantial percentage 
of those in the industry who support the legislation that we 
have before us. Can you briefly tell me if you perceive any 
opposition and where that opposition is coming from?
    Mr. Allen. Congressman, I have been involved in this for 6 
years, and during that time we have gone around to 20 of the 24 
States personally to promote this program, and in that time we 
have addressed concerns and put together a bill before you 
that, to my knowledge, at this point has no opposition either 
from within the industry or outside of the industry. It has 
been a long process and what today is before you is something 
that is broadly supported, as evidenced by the number of 
cosponsors on this committee and in the House.
    Mr. Shimkus. And may be evidenced by the lack of people 
here.
    Mr. Woosnam.
    Mr. Woosnam. Just to support what Mr. Allen just said, I 
mean, we reached out to labor unions, again, the Consumer 
Energy Council, which I think is acknowledged as one of the 
most senior of consumer watchdog groups. Even our competition 
in the natural gas industry has weighed in, and we believe that 
the product you have before you has been very well vetted, so 
to speak.
    Mr. Shimkus. Give me a brief synopsis of how do we expect 
NORA funds will be spent.
    Mr. Allen. Just as this legislation prescribes. The 
legislation says it will be used for research and development, 
develop new products, more reliable products and cleaner 
products. We have great needs, and we will do that. The 
legislation says that we can use it for training our 
infrastructure, for improving their safety practices.
    As you know, there are 7,000 small family businesses who 
sell heating oil to the over 30 million American consumers. 
They vitally need the training that this bill would provide so 
we can compete in the 21st century. And then, finally, we have 
many publics that we must educate. We must educate architects, 
builders, regulators, people who deal with our business daily 
and our own consumer about the new oilheat we are going to 
create.
    Mr. Woosnam. Again, I would support what Don said. One of 
our critical issues right now is finding qualified technicians, 
and NORA funds could be used to work with local technical 
institutes to establish training programs to bring new people 
into the marketplace, employees.
    But the big thing I say is this is a consumer benefit 
because people will be better informed about the product they 
are using to heat their homes.
    Mr. Shimkus. And knowing and understanding the make-up of 
this committee and having friends from the northeastern 
States--I was outside the room, so I don't know if the question 
of price fluctuations came up. How do you perceive NORA to be 
helpful in addressing heating oil concerns and price 
fluctuations? Of course, with the oil shortage or the 
restriction of importation or actually processing that OPEC has 
done, is this going to be helpful or harmful in this whole 
address to my colleagues in the northeastern States on the 
issue of price?
    Mr. Allen. This legislation we view as a vehicle to prevent 
happening from what happened again. It cannot happen to our 
industry again. It destroys the confidence of our consumers 
within our industry. It destroys the confidence of our 
coworkers in what we do, and it destroys the financial aspects 
of a heating oil dealer. Your cash lines are exploded. Your 
margins are decreased. We cannot allow this to happen.
    NORA, we think, can cause solutions to occur. My own 
particular company has used price protection for its consumers 
for 10 years. This last year my 8,000 customers experienced no 
price spike. There are countless other dealers like myself 
throughout the oilheat industry who have offered these 
programs. NORA, we think, can provide consumers the awareness 
of that choice. It can through education bring more dealers, 
train them in how to manage this type of program. These are the 
types of things we think NORA can do to prevent this from 
happening again.
    Mr. Woosnam. I have nothing to add to Mr. Allen's 
statement.
    Mr. Shimkus. Having none of my colleagues return, what I 
will do is leave the record open for the requisite number of 
days if they want to submit questions to you all.
    And, with that, having no other members here and no other 
questions, I will adjourn this hearing.
    [Whereupon, at 12 noon, the subcommittee was adjourned.]
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