Energy Efficiency Must be Foundation of National Energy Policy, Alliance to Save Energy President Tells Senate Energy Committee

(The full text of David Nemtzow's testimony can be found at http://www.ase.org/testimony.htm)

WASHINGTON, March 11 -- Given that every oil price shock in U.S. history has been followed by a recession, Congress must tap the potential of energy efficiency to help the U.S. economy, the environment, and national security, Alliance to Save Energy President David M. Nemtzow told the Senate Committee on Energy and Natural Resources today.

Referring to recent large and growing price increases for oil, Nemtzow said, "Surely we can reduce demand for oil, and thus help to grow our economy, and that of the entire world. Lessening pollution and our deadly dependence on Middle East oil would seem a mere sideshow.

"Unnecessary and excessive oil dependence leads to oil price shocks which in turn slow the economy and send consumer confidence plummeting. They cut profits, put Americans out of work, and endanger the well-being of families and children." But even though enormous gains are within reach, when increasing fuel economy is proposed, "The auto companies just say no, while Americans take the economic hit."

While agreeing that national energy policy should strike a balance between energy production and energy efficiency, Nemtzow said the energy bill that died in Congress last year did not meet this standard, nor does President Bush's current energy plan include adequately strong energy efficiency measures.

Addressing the need to reverse two damaging trends -- the 22-year decline in U.S. vehicle fuel economy and the past decade's 15 percent increase in U.S. oil consumption -- Nemtzow declared, "OPEC is driving our oil dependence, and we gave them the keys."

He urged Senators to increase vehicle fuel economy standards and to pass a tax credit this year for the purchase of highly-efficient, environmentally friendly vehicles.

Nemtzow said Corporate Average Fuel Economy (CAFE) standards represent a "proven, effective way of reducing our oil dependence" -- currently saving 2.8 million barrels of oil a day. Without higher CAFE standards, Nemtzow said, "technological and marketplace progress will be intermittent at best and will not lead to improvements across the fleet of cars, SUVs, pickup, and minivans."

"We are certainly not asking automakers to stop selling SUVs," Nemtzow assured Senators. "Just put the technologies currently available into these vehicles so that consumers who want to purchase a light truck can purchase an efficient one. It's that simple. Manufacturers are currently using high efficiency technologies that could significantly and cost-effectively increase the fuel economy of their passenger cars and light trucks."

Nemtzow said an Oak Ridge National Laboratory study estimates that oil market turmoil and its economic fallout had cost the U.S. $7 trillion by 1998. And, he continued, this "incomprehensible figure doesn't even include the downturn that began with the gasoline price shock of 2000, nor does it count the losses that are mounting daily as prices at the pump and fuel oil terminals have shot up to all-time highs throughout the nation."

Other efficiency measures that Congress could take to reduce oil dependence include: requiring replacement tires to be as efficient as tires on new cars or setting tire labeling standards to guide consumer choices; ensuring that fuel economy credits for dual fuel vehicles actually represent dual fuel usage; requiring fuel economy testing procedures to represent real- world driving and calling for "truth in testing" of vehicle mileage ratings; and allowing automakers more flexibility by ending the light truck loophole and establishing a single standard for all of a manufacturer's vehicles.

  On other energy issues, Nemtzow made these recommendations:

  *     Tax incentives -- Congress should incorporate in new energy
        legislation the Senate Finance Committee's 2002 package of tax
        incentives for energy efficient products and practices.

  *     Federal appliance energy efficiency standards -- The program begun
        in 1987 has been a huge success in saving energy and consumer costs
        and reducing pollution.  Congress should include in new energy
        legislation the package of standards agreed to last year by House
        and Senate conferees.

  *     Federal energy efficiency -- The federal government must continue to
        lead by example, implementing energy efficiency in its own
        facilities and operations.  It also should extend federal energy
        efficiency requirements beyond the building sector in order to
        tackle the remaining two-thirds of the federal government's total
        energy usage.

  *     Electric sector -- Last year, Congress failed to consider energy
        efficiency in the debate on electricity policy.  This time around,
        it must address how to help capture potential savings in this
        sector.

The Alliance to Save Energy is a coalition of prominent business, government, environmental, and consumer leaders who promote the efficient use of energy worldwide to benefit consumers, the environment, economy, and national security.