```

[Senate Hearing 114-382]
[From the U.S. Government Publishing Office]

                                                        S. Hrg. 114-382

                 CHALLENGES AND OPPORTUNITIES FOR SMALL
     BUSINESSES ENGAGED IN ENERGY DEVELOPMENT AND ENERGY INTENSIVE 
                             MANUFACTURING

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

                                 HEARING

                               BEFORE THE

                      COMMITTEE ON SMALL BUSINESS
                          AND ENTREPRENEURSHIP
                          UNITED STATES SENATE

                    ONE HUNDRED FOURTEENTH CONGRESS

                             FIRST SESSION

                               __________

                             JULY 14, 2015

                               __________

    Printed for the Committee on Small Business and Entrepreneurship
    
    
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]    

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            COMMITTEE ON SMALL BUSINESS AND ENTREPRENEURSHIP

                    ONE HUNDRED FOURTEENTH CONGRESS

                              ---------- 
                              
                   DAVID VITTER, Louisiana, Chairman
             JEANNE SHAHEEN, New Hampshire, Ranking Member
JAMES E. RISCH, Idaho                MARIA CANTWELL, Washington
MARCO RUBIO, Florida                 BENJAMIN L. CARDIN, Maryland
RAND PAUL, Kentucky                  HEIDI HEITKAMP, North Dakota
TIM SCOTT, South Carolina            EDWARD J. MARKEY, Massachusetts
DEB FISCHER, Nebraska                CORY A. BOOKER, New Jersey
CORY GARDNER, Colorado               CHRISTOPHER A. COONS, Delaware
JONI ERNST, Iowa                     MAZIE K. HIRONO, Hawaii
KELLY AYOTTE, New Hampshire          GARY C. PETERS, Michigan
MICHAEL B. ENZI, Wyoming
                Meredith West, Republican Staff Director
               Robert Diznoff, Democratic Staff Director
                            
                            
                            C O N T E N T S

                              ----------                              

                           Opening Statements

                                                                   Page

Vitter, Hon. David, Chairman, and a U.S. Senator from Louisiana..     1
Shaheen, Hon. Jeanne, a U.S. Senator from New Hampshire..........     6

                               Witnesses

Mr. Toby Mack, President & CEO, Energy Equipment and 
  Infrastructure Alliance, Washington, DC........................     9
Dr. Neil Aspinwall, Chancellor, SOWELA Technical Community 
  College, Lake Charles, LA......................................    16
Ms. Kateri Callahan, President, Alliance to Save Energy, 
  Washington, DC.................................................    22
Mr. Tyson Slocum, Director, Public Citizen Energy Program, 
  Washington, DC.................................................    29

          Alphabetical Listing and Appendix Material Submitted

American Sustainable Business Council
    Letter dated July 13, 2015...................................    84
Aspinwall, Neil
    Testimony....................................................    16
    Prepared statement...........................................    19
    Responses to questions Submitted by Senator Enzi.............    87
Callahan, Kateri
    Testimony....................................................    22
    Prepared statement...........................................    24
Mack, Toby
    Testimony....................................................     9
    Prepared statement...........................................    11
    Responses to questions Submitted by Senator Enzi.............    88
Shaheen, Hon. Jeanne
    Opening statement............................................     6
    FY14 Scorecard Summary by Prime Spend Subk and Plan Progress 
      Scores 2015................................................    50
Slocum, Tyson
    Testimony....................................................    29
    Prepared statement...........................................    31
Vitter, Hon. David
    Opening statement............................................     1
    Letter Dated May 8, 2015, from the Small Business 
      Administration Office of Advocacy..........................     3
    Hearings on ``Non-Jurisdictional'' Issues under Democratic 
      Leadership.................................................     8
    Report titled ``Macroeconomic Impacts of LNG Exports from the 
      United States''............................................    55
    Report titled ``Updated Macroeconomic Impacts of LNG Exports 
      from the United States''...................................    60
    Report titled ``The 2015 Economic Report of the President''..    61
    Article titled ``Democrats Increasingly Backing Oil and Gas 
      Industry''.................................................    70
    Report titled ``What They're Saying: Labor Groups Support LNG 
      Exports''..................................................    75

 
                      CHALLENGES AND OPPORTUNITIES
                      FOR SMALL BUSINESSES ENGAGED
        IN ENERGY DEVELOPMENT AND ENERGY INTENSIVE MANUFACTURING

                              ----------                              

                         TUESDAY, JULY 14, 2015

                      United States Senate,
                        Committee on Small Business
                                      and Entrepreneurship,
                                                    Washington, DC.
    The Committee met, pursuant to notice, at 2:35 p.m., in 
Room 428A, Russell Senate Office Building, Hon. David Vitter, 
Chairman of the Committee, presiding.
    Present: Senators Vitter, Fischer, Gardner, Ernst, Enzi, 
Shaheen, Markey, and Coons.

 OPENING STATEMENT OF HON. DAVID VITTER, CHAIRMAN, AND A U.S. 
                     SENATOR FROM LOUISIANA

    Chairman Vitter. Good afternoon, everybody. I will call the 
committee to order.
    We are here for an important hearing entitled, ``Challenges 
and Opportunities for Small Businesses Engaged in Energy 
Development and Energy Intensive Manufacturing.'' This hearing 
is particularly important and timely because of the 
significance of the energy industry to our economy and how many 
small businesses are involved.
    Before the drop in the price of oil relatively recently, 
energy jobs in America were the difference between our being in 
recovery and actually remaining in a recession. Were it not for 
those energy-related jobs, we would still be in a technical 
recession. Thankfully, that is not the case because of these 
significant jobs.
    And, as I said, it is also important and why we are talking 
about it in this Small Business Committee that many energy-
related businesses are small entities. To quantify that, I will 
use my home state of Louisiana as an example. A majority of 
Louisiana businesses in four of the five energy-defined sectors 
had less than 20 workers. Specifically, businesses with fewer 
than 20 employees made up about 77 percent of the oil and gas 
extraction businesses, 71 percent of oil and gas operations 
businesses, over 68 percent of oil and gas wells businesses, 
and about 57 percent of oil and gas field machinery and 
equipment-related businesses. These illustrate just how 
important the industry and the sector is to small business.
    The purpose of this hearing is to delve a little deeper 
into opportunities and challenges that these small businesses 
face in the energy sector. One of our witnesses, Toby Mack, is 
President of the Energy Equipment and Infrastructure Alliance, 
which represents the shale supply chain, and he will speak to 
that phenomenon, including LNG exports.
    The opportunities from this new era of American energy 
abundance are tremendous, but there are also challenges. One 
long-term challenge is that the demand for skilled workers is 
outpacing their availability, and so the question becomes how 
do we help train our workers to step into these high-skill, 
high-demand jobs in the energy sector.
    Part of the answer lies with our community and technical 
colleges that are stepping up to provide tailored programs and 
services for that training. Our second witness, Dr. Neil 
Aspinwall, Chancellor of Southwest Louisiana Technical 
Community College, will discuss some of these challenges and 
opportunities in depth.
    And, of course, there are other challenges, as well. I have 
been very outspoken about the Obama Administration's energy and 
environmental regulations, which are overly burdensome, in my 
opinion, and really hold down a lot of great potential industry 
sector job creation. This committee recently held a hearing to 
examine how the EPA violated the Regulatory Flexibility Act by 
certifying that its rule to redefine Waters of the United 
States will not have a significant economic impact on a 
substantial number of small entities. And in particular, if you 
will remember, we heard testimony from the Small Business 
Administration's Office of Advocacy and it was very clear on 
that point.
    Now, while EPA did not make as blatant of a mistake when it 
came to its proposed federal implementation plan for regulating 
carbon emissions, I think it clearly fell short there, as well. 
EPA's efforts were so inadequate, in fact, that they earned a 
rare letter of rebuke from the SBA's Office of Advocacy, which 
I will insert into the record. If there is no objection, and 
hearing none, we will insert that into the record.
    [The letter follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT] 
    
    Chairman Vitter. There are many other examples of the EPA's 
refusal to responsibly consider small business impacts, and we 
have talked about those on other occasions, as well.
    For all of these reasons, and because of all aspects of 
this hearing, I am working with others on a small business 
energy bill and will be finalizing that in the coming days. 
But, certainly, today's discussion will help shape that 
legislative solution to reduce federal burdens for small 
businesses specifically involved in the energy sector. I 
believe that is important to fully maximize the job creation 
potential of this important sector of our economy.
    And now, I want to welcome and turn to Senator Shaheen, the 
committee's Ranking Member.

  OPENING STATEMENT OF HON. JEANNE SHAHEEN, RANKING MEMBER, A 
                U.S. SENATOR FROM NEW HAMPSHIRE

    Senator Shaheen. Thank you very much, Chairman Vitter.
    Welcome, everyone. Welcome to our witnesses. I look forward 
to this opportunity to discuss the energy challenges that face 
small businesses. I do have some concern that we may get into 
some energy issues that are under the jurisdiction of the 
Senate Energy and Natural Resources Committee, but nonetheless, 
small businesses are facing critical cost issues because of 
energy challenges, and so we should have a good discussion.
    Having owned and operated a small business, like I am sure 
all of us know, every cost counts and every cost has to be 
managed as smartly as possible, and this is certainly true for 
energy consumption. We are seeing in New Hampshire, where I am 
from, that rising costs of energy are having a real impact on 
the business environment.
    Now, as I think about energy, I think about energy 
efficiency, because it is the cheapest, fastest way to address 
our nation's energy needs. I have joined with Senator Rob 
Portman to advance major legislation to ramp up energy 
efficiency in manufacturing, in buildings, and in the federal 
government. I think this is a particularly important way to 
address energy because it is something that we can all agree 
on, regardless of what part of the country we are from or what 
particular area of energy we support, whether it is fossil 
fuels or solar and wind. Everybody benefits from energy 
efficiency.
    We had the opportunity to bring Shaheen-Portman to the 
floor last year, but despite overwhelming support, it was not 
able to advance because of disputes over an unrelated partisan 
amendment. However, the President did sign into law a mini-
version of the bill earlier this year, which we think helps 
provide significant efficiency savings.
    Every small business, whether in manufacturing, in retail 
services, or even agriculture, can benefit from energy 
efficiency. But, of course, there is a problem, and that is 
that small businesses, especially in energy-intensive sectors, 
face unique challenges and barriers when it comes to addressing 
their energy needs and increasing their energy efficiency. I 
think the Small Business Administration can play an important 
role, particularly when it comes to the financing that they 
often need to be more energy efficient.
    Today, I have introduced legislation that will ensure that 
small businesses who want to undertake energy efficiency 
projects can qualify for the 504 loan program. As members of 
this committee, we know that the 504 program helps small 
businesses purchase their own real estate or equipment. That 
makes it easier for them to invest in expanding their 
companies. By helping small businesses take full advantage of 
energy efficiency, we reap a wide range of benefits, everything 
from reducing costs, to enhancing competitiveness, to reducing 
greenhouse gas emissions.
    So, again, I want to welcome our witnesses, and I want to 
take this opportunity to give a special welcome to Kateri 
Callahan, who is President of the Alliance to Save Energy and 
who I have had the great opportunity to work with now for 
almost six years ago. For more than a decade as President of 
the Alliance, Kateri has provided extraordinary national 
leadership in the field of energy efficiency and I look forward 
to her testimony today and to her continued efforts to help 
businesses become more efficient.
    Thank you, Mr. Chairman.
    Chairman Vitter. Great. Thank you, to our Ranking Member.
    Regarding the jurisdiction issue, let me just note that 
this committee has always, on a bipartisan basis, had hearings 
on a number of topics that were not within our narrow technical 
jurisdiction, including certainly energy discussions and 
hearings. And, just for instance, under Senators Landrieu and 
Kerry, two previous Chairs, there were five energy discussions 
like that, and I will just submit that list for the record.
    [The information follows:]
    [GRAPHIC NOT AVAILABLE IN TIFF FORMAT] 
    
    But, I know we will have a productive discussion.
    Let me introduce our four witnesses and then they will 
testify, in turn.
    Toby Mack is President and CEO of the Energy Equipment and 
Infrastructure Alliance based in Washington, D.C.
    Dr. Neil Aspinwall is Chancellor of Southwest Louisiana 
Technical Community College in Lake Charles, Louisiana.
    Kateri Callahan is President of the Alliance to Save Energy 
in Washington, D.C.
    And Tyson Slocum is Director of the Energy Program at 
Public Citizen.
    Welcome to all of you, and we will be eager to hear from 
all of you in turn, starting with Mr. Mack.

STATEMENT OF TOBY MACK, PRESIDENT AND CHIEF EXECUTIVE OFFICER, 
          ENERGY EQUIPMENT AND INFRASTRUCTURE ALLIANCE

    Mr. Mack. Thank you, Chairman Vitter and Ranking Member 
Shaheen, for the opportunity to comment on the impact of energy 
development on small business.
    EEIA is an organization of companies, trade associations, 
and labor unions that represent the businesses and workers of 
the shale oil and gas supply chain. Policies that support 
increased production will result in a great number of new, 
high-paying jobs and strong growth in the supply chain, 
especially for its small businesses.
    Equipment, products, and services provided in support of 
shale energy operations come from all 50 states. They are found 
in 60 different industries in six major sectors. These are 
depicted on the diagram included in my written statement, which 
appears as this. They are, briefly, equipment and machinery, 
construction, logistics, materials and supplies, information 
technology, and professional services.
    To illustrate the supply chain, I offer the example of a 
piece of construction equipment used to prepare a production 
site or build energy facilities such as pipelines, storage, or 
an LNG processing plant. Consider what goes into making that 
machine. There is raw steel, fabricated steel plate, and 
forgings; the machine tools that cut, bend, machine, and weld 
components; buckets, teeth, and attachments; a high-horsepower 
engine and transmission; hydraulic cylinders and components; 
steel sprockets and tracks or huge rubber ties; electronic 
controls and components; plus hoses, valves, filters, gaskets, 
lubricants, and fuel.
    To obtain these components, the machine's manufacturer has 
thousands of its own suppliers, and their suppliers have 
suppliers, and so on down the line until you get to raw 
material. The vast majority of these businesses are smaller 
local and regional firms. They are all essential to building 
the machine, and they are ultimately dependent on energy 
production to create the demand for it and the jobs that go 
with it.
    Now, let us turn to the supply chain's economic and 
employment dimensions. EEIA estimates that there are at least 
120,000 energy supply chain businesses, more than 100,000 of 
which are small. According to IHS, in 2015, the shale supply 
chain workforce consists of 615,000 jobs, growing to 757,000 by 
2025. Output in 2015 is $173 billion, growing to $206 billion 
by 2025.
    Energy supply chain workers earn, on average, $79,000 per 
year, vs. $68,000 for all American workers. For every direct 
job in energy production, three jobs are created in the supply 
chain, and, in fact, six more are created in the communities 
where workers live and shop.
    Consider the new supply chain jobs created when additional 
natural gas is produced for export. IHS reports that supply 
chain industries will have 515,000 jobs supporting shale gas 
production in 2015, growing to 655,000 jobs by 2020. EEIA 
estimates that shale gas production at 44 billion cubic feet 
per day in 2015, to reach almost 60 billion cubic feet per day 
by 2020. This calculates to about 11,000 supply chain jobs for 
each new BCF per day.
    Recent approvals of applications to export LNG anticipate 
that between now and 2020, capacity will reach about 10 BCF per 
day, requiring that much additional natural gas production from 
shale. Thus, we can look forward to over 100,000 new supply 
chain jobs to be generated by LNG exports alone over the next 
five years. That means $8 billion of additional annual income 
to American workers which will be spent locally as these 
workers consume, pay taxes in, and contribute to their local 
communities.
    Using the SBA estimate that half of American workers are 
employed by small business, we project that over the forecast 
job gains, small businesses will be responsible for creating at 
least half of them.
    Much of this job growth will be concentrated in skill areas 
that require technical training, but not four-year or higher 
degrees. Supply chain companies will be challenged to fill 
positions in high-growth occupations, the need for which will 
as much as double between 2012 and 2025. High-growth 
occupations include truck drivers, construction laborers, 
equipment mechanics, engine technicians, equipment operators, 
machinists, welders, and many more.
    The energy supply chain is truly national and not confined 
to oil and natural gas producing areas. We see this effect by 
looking at the geographic distribution of job gains that occur 
when crude oil production grows. Of the top 15 states by job 
gains if crude oil production were increased for export, 10 are 
states in which little or no crude oil is produced. In fact, 
Illinois, because of the prominence of equipment manufacturing, 
ranks third behind Texas and California in supply chain jobs 
gained.
    In summary, exports of LNG, and, indeed, of all energy 
products, including crude oil, will support additional domestic 
energy production from our large and growing reserves for our 
innovative and increasingly productive energy sector, supported 
by the supply chain's small businesses. American shale energy 
production renaissance has been the principal contributor to 
our emergence from the deep recent recession. It has the 
potential to spur substantially more job creation throughout 
the country, and particularly with small business, if Congress 
adopts policies that facilitate exports. Thank you.
    [The prepared statement of Mr. Mack follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT] 
    
    Chairman Vitter. Thank you very much, Mr. Mack.
    And now, we will hear from Dr. Neil Aspinwall. Doctor, 
welcome.

   STATEMENT OF NEIL ASPINWALL, CHANCELLOR, SOWELA TECHNICAL 
              COMMUNITY COLLEGE, LAKE CHARLES, LA

    Dr. Aspinwall. Thank you, Mr. Chairman, members of the 
committee.
    Southwest Louisiana has been blessed with an abundance of 
expansion activities related to the petrochemical, liquified 
natural gas, LNG, and gas to liquids, GTL, industry. In fact, 
there are currently 85-plus billion dollars in planned 
industrial expansions directly related to LNG/GTL energy 
sector, and approximately $30 billion in construction is 
already underway.
    These massive and historical expansions in the 
petrochemical industry create the need for highly skilled 
workers for the oil and gas industry. Southwest Louisiana 
Technical Community College, or SOWELA, as it is known, is one 
of the 13 institutions that comprise the Louisiana Community 
and Technical College System, and we have been given the 
opportunity and responsibility to provide the training programs 
and services needed to produce the workforce necessary to help 
construct these massive industrial expansions and operate the 
new petrochemical plants once they begin production.
    According to the Louisiana Workforce Commission, the annual 
completers of workforce programs necessary to fill the 
occupations of highest need for the industry sector expansion 
in the region are: construction crafts field, 9,360 workers; 
industrial production, 4,955 workers; welding, 4,810 workers. 
Since 2012, SOWELA has begun to design, create, implement, and/
or expand training programs to help meet the demands of these 
oil and gas industrial expansions.
    Programs focusing on skilled crafts such as pipefitting, 
millwright, welding, insulators, scaffolding, concrete forming, 
machining, electrician, lab analysis, and non-destructive 
testing have been added to the instructional program options at 
the college. Enrollment and high-demand programs directly 
related to the oil and gas industry, such as process technology 
and industrial instrumentation, have literally doubled in the 
past couple of years.
    According to the Energy Sector Jobs to 2030, a global 
analysis published by the Institute for Sustainable Futures in 
2009, the 2020 global energy sector is expected to employ an 
estimated 10.5 million workers. By 2030, global energy sector 
jobs are expected to grow by an additional 800,000 workers, 
totaling an estimated 11.3 million employees.
    Therefore, SOWELA Technical Community College, whose 
mission is to provide the skills and training needed to prepare 
the workforce to help grow and sustain the regional, state, and 
national economy, must be prepared with the programs, services, 
and financial resources necessary to help produce this massive 
workforce.
    In order to get the students into the workforce quicker and 
satisfy the hiring demands of industry, many higher education 
institutions are beginning to offer programs in shorter 
condensed formats. In fact, SOWELA created a compressed process 
technology program to provide the opportunity for students to 
earn an Associate of Applied Science degree in just 16 weeks. 
The first FastTrack P-Tech cohort contained 18 students, all of 
which already earned advanced degrees and were placed into the 
workforce within six months after completion. This 
substantiates the fact that these energy sector jobs are highly 
sought after positions that have and will continue to attract 
individuals to the region for better employment opportunities.
    As the workforce needs for the oil and gas industry become 
more acute, the petrochemical industry has requested and SOWELA 
has implemented various short-term training programs, many less 
than six months in length and ranging from 80 to 900 contact 
hours. These programs have been developed in the craft areas, 
such as machining, millwright, electrical, structural welding, 
pipe welding, scaffolding, cement forming, and HVAC, and as an 
example, an individual who enrolls in and successfully 
completes the structural welding program can immediately be 
hired at an hourly wage of at least $26. So, a time commitment 
of six months and a program cost of approximately $2,200 can 
provide the means for an individual to earn a middle class wage 
with great benefits which helps strengthen the local, state, 
and national economies.
    However, this method of placing students into the workforce 
quicker through condensed instructional delivery formats does 
have a downside. Although shorter programs provide skill 
training in predetermined critical competency areas and reduces 
the number of contact hours or seat time a student needs to 
spend in the classroom or lab. It is this reduction in contact 
hours that prevents the programs from being eligible for 
federal financial aid. According to the U.S. Department of 
Education guidelines, these types of short-term condensed 
workforce development programs are not eligible for federal 
financial aid because they are not at least 600 clock hours and 
15 weeks in length.
    But, despite the ease at which these training programs can 
be created and offered and the demand from industry, the 
program costs still present an obstacle that prevents many of 
our citizens from taking advantage of the training needed to 
prepare them for the opportunities available through the 
petrochemical industry expansions. Since 84 percent of 
community college students work, and 60 percent work more than 
20 hours per week, our students cannot afford to quit their 
jobs and take advantage of skills training programs in which no 
financial aid is available.
    SOWELA, as well as other community colleges whose primary 
mission is workforce development, struggles to find options to 
help students cover the costs of enrolling in and completing 
these condensed industry-specific training programs and 
services. Fortunately, various private industries have stepped 
forward to provide scholarships for students seeking entry into 
these programs. Although greatly appreciated and highly sought 
after, these private business and industry scholarships are not 
the long-term solution to sustaining the training programs 
necessary for building the oil and gas industry workforce.
    A more permanent and guaranteed funding source needs to be 
created so that the oil and gas industry and the energy sector 
overall can continue to be competitive and help the national 
economy grow and improve. Legislation on the federal level 
could help provide the funding solution needed, and I hope this 
committee will investigate all options for federal funding 
assistance.
    In closing, SOWELA and the Louisiana Community and 
Technical College System have a golden opportunity to shape the 
future of Louisiana and the nation as a whole by producing the 
workforce needed to ensure that America continues to produce 
the energy necessary to fuel an economy that will provide 
financial and economic stability, vitality, and prosperity for 
generations to come. Thank you.
    [The prepared statement of Mr. Aspinwall follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT] 
    
    Chairman Vitter. Thank you very much, Doctor.
    And now, we welcome again Ms. Kateri Callahan. Welcome.

   STATEMENT OF KATERI CALLAHAN, PRESIDENT, ALLIANCE TO SAVE 
                             ENERGY

    Ms. Callahan. Thank you, Mr. Chairman and Ranking Member 
and members of the committee. I truly appreciate the 
opportunity to testify to you today on the important role that 
energy efficiency can play in making small businesses more 
productive, more competitive, and greater jobs generators.
    My organization, the Alliance to Save Energy, is a 
nonprofit coalition of 140 different businesses across the 
entire economy and institutions that are dedicated to advancing 
energy efficiency. We were formed way back in 1997 by Senator 
Chuck Percy, a Republican from Illinois, and Hubert Humphrey, a 
Democrat from Minnesota, and we are honored to continue the 
Alliance's history of bipartisan leadership.
    I am particularly proud that three members of this 
committee serve as honorary members of the Alliance. Jeanne 
Shaheen is our first ever elected female Honorary Chair of the 
Alliance. Senator Ed Markey is the longest-serving 
Congressional member on our Board of Directors. And Chris Coons 
is our newly elected First Vice Chair. But, I would also note 
that we are fortunate to have Energy Committee Chair Lisa 
Murkowski, Senator Portman, and Senator Collins providing 
leadership from the other side of the aisle.
    Energy efficiency is America's greatest energy resource. 
Since the 1970s and our founding, we have doubled energy 
productivity. That means we are getting twice as much GDP from 
each unit of energy that we consume, and this translates into 
real savings for America's businesses, whether they are big or 
small.
    But, Americans can do better. We still waste over half of 
the energy that we consume. This means that the opportunity to 
double our energy productivity once again lies before us, and 
the rewards if we achieve that goal are enormous. We could 
reduce our national energy bill by a full $527 billion while 
creating 1.3 million jobs. And we could lower our energy 
imports to represent only seven percent of our total 
consumption.
    And, no sector of the economy has more to gain from energy 
efficiency than small business. As Senator Shaheen said, small 
businesses, and most especially small manufacturers, energy use 
is one of the top costs of doing business. Yet, small 
businesses remain a largely untapped market, as she mentioned, 
when it comes to energy efficiency, and there are two major 
reasons why.
    First is knowledge. Energy is not the core business of most 
small enterprises, notwithstanding those that Mr. Mack talked 
about, and laser-focused entrepreneurs often do not have the 
information about technologies, programs, and incentives that 
could help them to reduce their energy waste.
    The other big problem is capital. Small businesses rarely 
have investment dollars to spare, and the up-front costs for 
energy efficiency upgrades often inhibit investment.
    Fortunately, innovative companies, utilities, and 
government agencies are finding ways to tackle these barriers. 
The Small Business Direct Install programs are a great example 
of how government and businesses are cooperating to eliminate 
barriers and create real value. In New York, these SBDI 
programs have improved the facilities of over 100,000 small 
businesses, reducing their energy operating costs by more than 
a billion, and that is money that is getting poured back into 
the State of New York.
    The programs are themselves being carried out by innovative 
small businesses, like Lime Energy, EnerPath, SmartWatt, and 
welding companies you have probably not heard of, but these 
companies are job generators. Just in New York, these companies 
have hired nearly 200 new employees and also have helped to 
create thousands of indirect jobs.
    Across the nation, state energy offices, the industrial 
assessment centers, the Department of Energy, and small 
businesses are joining together to create these successes. One 
quick example is ECT Industries, which is a four-generation 
family-owned business that took advantage of Wisconsin's Focus 
on Energy Program. ECT put in efficient lighting that reduced 
their energy intensity in lighting by 46 percent. The project 
paid for itself in only eight months and they are saving over 
$55,000 a year in avoided small business costs.
    There are lessons that come from these successful programs 
that can help in scaling up energy efficiency across the entire 
small business sector. First, we need greater outreach to small 
businesses to ensure that they know about the technology, 
resources, and most of all, about the bottom-line benefits to 
cutting energy waste.
    Second, building relationships with business owners and 
developing solutions that fit their specific needs is critical.
    And, finally, leveraging existing resources, from tax 
incentives to loan programs to technical assistance. The 
federal government, through the Small Business Administration, 
the Department of Energy, the Department of Agriculture, and 
other agencies, has a significant role to play. For example, 
the Small Business Administration's Section 504 program that 
Senator Shaheen mentioned can be used as a very effective tool 
for overcoming the first cost and financing issues surrounding 
efficiency upgrades, and we look forward to working with the 
Senator on that program.
    In addition, she has legislation pending, S. 1054, the 
Smart Manufacturing Leadership Act, that would direct the 
Department of Energy to provide assistance to small and medium-
sized manufacturers in implementing smart manufacturing 
programs that will make them more efficient, more energy 
productive.
    So, in closing, I want to thank the committee for allowing 
me this opportunity to discuss the important role of energy 
efficiency in increasing the competitiveness of our economy's 
backbone, our small businesses and our entrepreneurs. Thank 
you.
    [The prepared statement of Ms. Callahan follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT] 
    
    Chairman Vitter. Thank you very much, Ms. Callahan.
    And now, we will hear from Tyson Slocum. Welcome.

  STATEMENT OF TYSON SLOCUM, ENERGY PROGRAM DIRECTOR, PUBLIC 
                            CITIZEN

    Mr. Slocum. Thank you very much, Chairman Vitter, Ranking 
Member Shaheen, members of the committee. My name is Tyson 
Slocum. I direct the Energy Program at Public Citizen. We are 
one of America's largest consumer advocacy groups and we 
receive most of our funding from individual contributions of 
over 400,000 members across the United States, many of whom 
either own their own small businesses or are employed at small 
businesses.
    So, we have been hearing a lot from certain representatives 
of the natural gas industry that they are in a type of crisis, 
that unless they are able to receive some form of legislative 
or regulatory relief, primarily in the form of being able to 
expedite natural gas exports, LNG exports, that unless they are 
able to get this relief, there are going to be problems ahead.
    But, when I look at the data, when I look at the numbers, 
the natural gas industry has never been doing better, right. 
This past winter, the natural gas industry broke all sorts of 
records in terms of production. We have never produced more 
natural gas every day than we did this winter, and kudos to the 
men and women of the natural gas industry and all the small 
businesses and large businesses associated. We are producing so 
much natural gas that we just passed last year Russia to become 
the largest natural gas producer on the planet.
    So, I can understand why the natural gas industry wants to 
be able to more easily sell natural gas abroad, because the 
last time I checked, natural gas sells for under $3 here in the 
United States, whereas it is double, triple, or even five times 
higher than that in parts of Europe and Asia and elsewhere. So, 
the natural gas industry and its associated small businesses 
that provide important services to them, I can understand why 
they would want to advocate for that.
    But, when I look at there are more small businesses out 
there that are very concerned about the prices they pay for 
natural gas, and there is no question that if we ramp up 
natural gas exports, we are going to see higher domestic prices 
for American consumers and American businesses, and that is not 
just Public Citizen saying that, that is the U.S. Energy 
Information Administration that has come to that very clear 
conclusion.
    So, rather than accelerate the ability of the industry to 
ramp up exports, I would like to see Congress and the executive 
branch work to prioritize the protection of consumers and small 
businesses that are sensitive to natural gas price increases, 
and there are several things that Congress and the executive 
branch can do in this regard.
    One is, in 1975, Congress passed a law called the Energy 
Policy and Conservation Act. That law did many things. One 
thing it did is that it directed the President to ban the 
export of crude oil and natural gas unless the President made a 
public interest determination that it was in the public 
interest to export that. We have got rules that the Department 
of Commerce put together in its short supply regulations that 
significantly limit the ability of the United States to export 
domestically produced crude oil. The Department of Commerce 
never put together rules on natural gas, probably because in 
1975, no one was talking about exporting natural gas. So, I 
think that is something that I think Congress ought to 
communicate, and I know that some members, like Senator Markey, 
have done just that.
    I think that Congress ought to ensure that the public 
interest determinations being made right now by the Department 
of Energy about whether or not to export gas are more concrete, 
meaning that we need to ensure that exports are not going to 
result in higher prices for consumers. Like I said, there is no 
question that allowing and expediting LNG exports is going to 
boost elements of the natural gas production industry and 
associated small businesses that assist them. But, there are a 
lot more small businesses out there that would be harmed by the 
increase in prices, and we need to make sure that a public 
interest definition clearly states that prices cannot go up on 
consumers as a result of exporting natural gas.
    A third thing that Congress can do is revisit efforts back 
in the 2005 Energy Policy Act that I was working on, along with 
a bunch of others, where we called for governors of states 
where LNG facilities are located to be able to have equal say, 
along with FERC, about whether or not a permit for siting an 
LNG facility is granted. I believe that states have a great 
opportunity to hear from their constituents, just as FERC does, 
and they ought to have a prominent role.
    Thank you very much for your time, and I look forward to 
any questions you may have.
    [The prepared statement of Mr. Slocum follows:]
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    Chairman Vitter. Okay. Thank you very much.
    I am going to reserve my time for later and invite Senator 
Shaheen for questions.
    Senator Shaheen. Thank you very much, Mr. Chairman.
    The U.S. industrial sector uses about 30 percent of all 
energy, and it is more energy than is used by any other sector 
of our economy. As we think about how do we address the costs 
of economy for small businesses, I wonder, Ms. Callahan, if you 
could talk about some of the market barriers that exist to 
deploying more energy efficiency in the manufacturing sector 
and why we should think about policies that can help fix these 
roadblocks.
    Ms. Callahan. Thank you very much, Senator. One of the 
things that is interesting about small business and small 
manufacturing, the challenges are really twofold, and the first 
challenge is that while they are huge consumers--they use about 
50 percent, the small businesses, of that energy that is 
consumed--but it is very diffuse and it is used in very, very 
different ways. So, it makes it kind of a tough market to 
tackle. So, that is a big challenge.
    And then the second that is correlated to that is that 
these businesses are focused largely on doing other things, and 
so if they have spare capital or they have access to capital, 
they are tempted to spend it in other ways, and so you need to 
talk to small businesses in terms of, well, if you can save 
$55,000 a year, how many cups of coffee would you have to 
manufacture, or how many dresses would you have to sew and sell 
in order to get that kind of bottom line profit.
    So, it means that you have to get really personal with the 
business owner, the man or the woman that is running the 
business, and understand. So, we are at a point in time where 
we are seeing that be able to happen through these programs 
like SBDI, because the data analytics are getting there. The 
people that are offering services are able to go in on an iPad 
and show folks what kind of savings are going to be realized.
    So, in order to get it more at scale, we have got to be 
able to take it out of the five or six states that are doing 
that kind of work and put it nationwide, and a key to it and 
the data analytics, also, is getting standard offerings for 
financial assistance. So, your program, the 504(b) program, the 
Department of Agriculture's REAP loan program, those kind of 
things are going to be essential, because we have got--banks 
are lining up, but they are not willing to take the risk and 
they do not have the data necessary to do the deals and the 
deal flow. So, we have got to work on that.
    Senator Shaheen. So, you talked a little bit in your 
testimony about ways in which we can help small businesses get 
access to some of the efficiency programs. Do you have any--
what has been the experience of the Alliance in what is the 
best way to get the attention of small businesses and provide 
that help?
    Ms. Callahan. Again, I think that it is--unfortunately, it 
has to be done at the local level and through local partners 
and one-on-one. But, the role that government can play can be 
in helping to make sure that information, tools, technical 
assistance is provided, and we can train the trainers, if you 
will. So, when you have the small business counselors in 
states, when you have these manufacturing extension 
partnerships, making sure that they understand how to talk to 
folks about energy efficiency, what is available, what the 
resources are that are already there, whether there are state 
tax incentives or, hopefully again someday, federal tax 
incentives, that will allow people to get the job done.
    So, I do think there is a role for federal government, but 
you have got to meet these folks where they live.
    Senator Shaheen. Thank you.
    Mr. Slocum, living in New England, we have some special 
challenges with respect to access to gas, natural gas in 
particular. Right now, we are experiencing real difficulties. 
We have gone from 15 percent dependence on natural gas in New 
Hampshire to almost 50 percent dependence, and getting the gas 
there is challenging.
    So, can you talk about what the projections are for the 
impact on us in New England if we start exporting LNG. Will 
that have an impact on the cost of gas, which is already very 
high?
    Mr. Slocum. Yes, absolutely. There are some exports to 
Canada. You know, we export about a trillion and a half cubic 
feet of gas, which is less than five percent of our total 
annual production, mainly to Canada and Mexico, and there is a 
significant amount of that coming out of the New England area 
as well as other areas.
    New England has a lot of special challenges. I do agree 
that there are some infrastructure constraints. But, there are 
also some power market regulatory problems in New England. For 
example, last year, I, along with the Connecticut Attorney 
General, helped to uncover a billion and a half dollar market 
manipulation by a Cayman Islands private equity firm called 
Energy Capital Partners that intentionally shut down a power 
plant in order to game the New England ISO's capacity auction.
    So, that was a billion and a half dollars in increased 
cost, not because of problems of natural gas infrastructure 
constraints, but because of incredibly poorly written market 
rules. And, so, this is something we are currently involved in 
litigation with the Federal Energy Regulatory Commission to get 
them to actually do something about that issue. But, I think 
that some big challenges with New England in the power market 
lie with the ability to have a more transparent and accountable 
independent system operator there.
    Senator Shaheen. Well, I look forward to hearing some of 
your ideas about the regulatory challenges, because, certainly, 
I think we can benefit from that.
    And, Mr. Chairman, if you would give me just a few more 
seconds to point out that the SBA scorecard on how federal 
agencies are doing in reaching their small business contracting 
goals has just come out, and I note that one of the Departments 
that has been way below its contracting goals and actually 
received an F was the Department of Energy. And, so, I would 
hope that all of us can try and work on that as we think about 
how we encourage small businesses with their use of energy, 
because, certainly, making sure that they get access to those 
contracts is a very important piece of what we need to do.
    Thank you all very much.
    Chairman Vitter. Absolutely, and that will be made part of 
the record.
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    Chairman Vitter. Now, Senator Enzi.
    Senator Enzi. Thank you, Mr. Chairman, and thank you for 
holding this timely hearing with a real discussion about how 
the nation's small businesses are accomplishing things in the 
energy sector, how they are stymied by some of the regulations, 
and what can be done to make things more productive and more 
efficient in a timely way.
    I want to thank our distinguished panel, too, for taking 
the time to come and share your expertise. I hope that you will 
be open to written questions. I am the accountant on here and I 
try to reserve my number questions for written questions. That 
way, people do not go to sleep in the audience.
    [Laughter.]
    But, energy is one of the main drivers of our nation's 
economy and it is a major driver of Wyoming's economy. We 
produce 40 percent of the nation's coal, and let me just take a 
moment to let that sink in. That is the sector that we are 
trying to discourage from producing any low-cost energy.
    In fact, in Colorado, there was just an attempt, and 
Senator Gardner was here earlier, a company that got permitted 
and has been producing coal successfully within their permit 
for eight years was just told that they have to redo their 
Environmental Impact Statement because they failed to take into 
consideration the impact where the coal is burned. At the time 
that you apply for a permit for a coal mine, you do not know 
where the coal is going to be burned. You are hoping for 
customers. You are planning on customers. You are counting on 
customers. But, you do not know where they are going to be. 
Now, the power plants themselves have to go through an 
Environmental Impact Statement, and that is where the local 
impacts of burning coal would be taken into consideration and 
have to be ameliorated.
    So, this looks like a major attempt to just shut down all 
energy, and they picked on a small business to begin with, 
which, of course, does not have the resources, probably, to 
fight it. I am hoping that some of the bigger companies will 
join into that.
    But, I am in favor of all of the energy and all of the 
energy efficiency and really believe that we are a country of 
innovators. We can do anything. We can do it better. We have to 
do it better. But, it cannot be better if it gets shut down.
    On the Health, Education, Labor, and Pensions Committee, we 
had a problem with an underground, now two underground mines in 
West Virginia collapsing and taking some lives, and one of the 
things we had discovered during that was that for quite a 
while, the underground mining was going downhill, and when it 
went downhill, nobody invented anything for underground mining, 
let alone safety equipment. So, when the economy came back and 
that was necessary and they started producing it again, they 
did not have the latest equipment for being able to do it.
    In Wyoming, General Electric wanted to do a big project to 
have clean coal, and they postponed it because they said coal 
is going to be done in. There is not going to be any coal 
production. And, so, what use would it be if we found a better 
way to burn coal. Fortunately, the University of Wyoming did 
not buy into that. They have a solar project that will separate 
hydrogen from water, burn it with coal, and make coal better.
    We believe in solar and wind. Denver is the Mile High City. 
You have got to go uphill to get to Wyoming. So, we are high 
plains and the wind really blows. In fact, the wind turbines 
there have to be designed so that when the winds get above 80 
miles an hour, they turn into the wind and shut down. 
Otherwise, the whole tower blows apart.
    But, we are having trouble getting power lines to them. You 
know, the power has to get to a customer before it is of any 
use, and most of our state is federal land and they are not 
interested in getting right-of-ways for power lines or 
pipelines. Of course, that is probably part of the reason why 
there is a problem getting natural gas to New England, getting 
pipelines that would get it there.
    So, I am hoping that out of this we can come up with some 
solutions that will make all business improve and be better.
    I have a question on the export policy. If the price goes 
below the cost of producing natural gas, it will not be 
produced. In fact, we are kind of at that situation right now. 
There will not be more wells, and eventually, we will be back 
in a situation of needing more and we will not have the talent, 
so we will be relying on the community colleges to quickly 
train people to do that, but it is hard to get somebody to go 
into a sector where the jobs have decreased.
    And, I see that I am going to run out of time before I can 
ask the question, so I will submit the questions to you, and I 
have another one on workforce training, too. I watched the 
effect of OPEC, who can manipulate our prices without changing 
their production at all, just rumoring their production. And 
then after they have killed off all of the workers that have 
the technical capability to do what we need to do, they raise 
the price with the same rumors, no change in their production, 
and they make a lot of money off of us.
    I remember when we were saddled with the--we said some 
comments about Saudi Arabia and they cut us off for a while, 
and there are gas lines all over the United States and 
everybody said, we need to have energy independence. Well, we 
are on the verge of energy independence, but we are doing 
everything we can to stifle it.
    I yield. Thank you.
    Chairman Vitter. Thank you very much, Senator.
    Now, Senator Markey.
    Senator Markey. Thank you, Mr. Chairman, very much.
    The Department of Energy has determined that if even less 
than half of all of the LNG that has been approved by the 
Department of Energy to be exported gets exported, it could 
lead to a 50 percent increase in the price of natural gas for 
people in America. It is just supply and demand 101. The less 
supply we have because we send it overseas, the higher the 
prices are going to go here.
    And, of course, if you are an oil company or a natural gas 
company, you want to sell it. Mr. Slocum mentioned this. In 
Europe, it is three or four times higher, the price you can 
get. In Asia, it might be five times higher, the price you can 
get. So, send it to China, they say.
    But, the truth is that the less there is here, is the 
higher the price is going to be for the utility industry, the 
higher the price is going to be for consumers, the higher the 
price is going to be for manufacturers here in the United 
States. We have created 700,000 new manufacturing jobs in the 
United States in the last four years, and there are more on the 
way, but not if you increase by 50 percent the price of natural 
gas. That is the feedstock.
    And, so, Mr. Slocum, can you talk about that and what the 
potential impact could be on the utility and manufacturing and 
consumer sector in America.
    Mr. Slocum. Absolutely, Senator Markey. There is no 
question that if you accelerate or ramp up the rate of 
exporting natural gas overseas, you are forcing U.S. consumers 
in the power sector and the industrial sector and in the 
household sector and in the commercial small business sector to 
compete with foreign markets where the price of natural gas is 
significantly higher than it is in the United States. And, so, 
if you are in the oil and gas industry, you are going to, 
understandably so, prioritize infrastructure investment to move 
your fracked natural gas to LNG terminals for export rather 
than, say, investing in additional pipeline capacity to serve 
power plants in New England or elsewhere.
    And, so, that is why the Energy Information Administration 
concludes that if you significantly increase the rate of 
natural gas exports, it is absolutely going to raise domestic 
prices for American consumers.
    Senator Markey. Now, the more that we use the natural gas 
here in our manufacturing sector, the more likely that the 
products that are created with it will be made here and will be 
exported rather than letting the natural gas get into the hands 
of the Europeans and the Chinese. Then they will sell the 
finished product back to the United States. So, what is that 
relationship, between low-priced natural gas as a feedstock 
into the manufacturing sector of America and the wealth, the 
jobs that are created here?
    Mr. Slocum. Yes. I am a big believer that the dynamic 
features of the U.S. economy are the value added and the role 
of technology in adding to that value. And, simply exporting 
raw materials--I understand that fracking has been an 
unbelievable revolution of technology and industriousness by 
American ingenuity, but at the end of the day, you are simply 
exporting a raw material that there is robust demand for 
domestically to use as a feedstock or to use as a more 
environmentally and climate-friendly fuel in the power sector--
--
    Senator Markey. So, Mr. Slocum, so a lot of the advocates 
for exporting natural gas or exporting oil--even though we are 
not energy independent, we are talking about exporting oil and 
we are not energy independent. We are still importing five 
million barrels of oil a day. How crazy is that, to export the 
oil we have when we are still importing five million barrels a 
day.
    But, they keep saying, well, it is like any other product. 
It would be like exporting a widget or a computer chip, that 
oil and natural gas should be the same. But, we do not send 
young men and women over to the Middle East to protect the 
widget market or to protect the silicon chip market. We do it 
because we want oil to come in from the Middle East.
    Now, Mr. Slocum, if we just converted seven million big 
trucks and buses over to natural gas vehicles, it would be the 
equivalent of all of the oil which we still import on a daily 
basis from the Persian Gulf. But, if we increase the price by 
50 percent, you know for sure that is not going to happen. So, 
would that not be a high objective that we should have, given 
the headlines above the fold on Iran and Iraq and all the other 
Middle Eastern countries on a daily basis?
    Mr. Slocum. Absolutely. There is no question, even with the 
record amounts of domestic production that the United States 
has had in crude oil, we are still vulnerable to international 
factors, because oil, unlike natural gas, is priced due to 
global benchmarks and what is going on in the Middle East or 
China. And, so, as a result, it would be beneficial, I believe, 
for the U.S. economy, particularly in the transportation 
sector, to see an increased use of natural gas. It has got 
certain environmental benefits relative to petroleum products 
as a transportation fuel. And the bottom line is making sure 
that the transportation sector has access to affordable prices.
    Senator Markey. Massachusetts consumers right now are 
paying $2.76 a gallon for gasoline at the height of the summer 
driving, which is down 95 percent from last summer, 95 percent 
down. Now, what if we start exporting oil out of our country? 
What would that mean for consumers in Massachusetts in terms of 
an increase in the price of gasoline?
    Mr. Slocum. Well, I actually testified before the House 
Small Business Committee last month specifically around oil 
exports, and again, there, the data is very clear that undoing 
this 1975 virtual ban on exporting crude oil will result in 
higher prices for American consumers.
    Senator Markey. So, we finally get a surplus. We finally 
have oil and gas here domestically, and the first thought of 
the oil and gas industry is export it out of the country before 
our consumers, our manufacturers, our utilities get the benefit 
from it. It is just wrong. It is bad policy. It will help our 
economy dramatically if we keep it here at a low price.
    Thank you, Mr. Chairman.
    Chairman Vitter. To balance the record, let me just hit a 
few things. First of all, the Obama Administration's Department 
of Energy has conducted two studies over the last few years 
looking at potential price impacts of exporting LNG and those 
studies have very different conclusions than what Senator 
Markey was describing. So, we will make those part of the 
record.
    [The information follows:]
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    [The second study, titled ``Updated Macroeconomic Impacts 
of LNG Exports from the United States'' can be found at http://
www.nera.com/publications/archive/2014/updated-macroeconomic-
impacts-of-lng-exports-from-the-united-sta.html.]
    And, also, I would just note and make part of the record 
significant bipartisan support for LNG exports. That includes 
an Obama Administration review and its conclusions regarding 
its benefits. That includes political support from Democrats 
like House Minority Whip Steny Hoyer. And that certainly 
includes labor union support from Laborers International Union, 
AFL-CIO, United Association of Plumbers, Fitters, and HVAC 
Techs, the Building Trades Council, and Insulators and Allied 
Workers Local Union 24. We will submit that for the record.
    [The information follows:]
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    Okay. Senator Fischer.
    Senator Fischer. Thank you, Mr. Chairman.
    I would like to thank all the panel members for being here 
today. I appreciate your input on this.
    Mr. Mack, as you probably know, Nebraska is very unique. We 
are a 100 percent public power state, and as we look at the 
clean power plan that is out there, we will be hit especially 
hard. Nebraska utilities are going to face reliability issues 
and small businesses are going to see price increases in their 
electricity bill. Can you explain what impact the increases in 
electricity rates would have on energy intensive small business 
operations like manufacturing and agriculture, which are both 
very, very important to my home state of Nebraska.
    Mr. Mack. Thank you, Senator. The increase in the cost of 
electricity that may be experienced because of a number of 
different factors, I think, have to be put in context with the 
dramatic decreases we have seen in electric power generation 
costs over the last several years because of the remarkable 
abundance of natural gas, particularly. If we look back five or 
six years, natural gas was about, I think, $8 or $9 per million 
BTU. Today, it is about $2.75.
    And, so, to the extent that power generation is converted 
to natural gas-fired appliance you are going to see a 
significant benefit to the ratepayers, not just in Nebraska, 
but to everywhere. So, I think the shale revolution and the 
abundance that it has created has had a tremendously beneficial 
impact to companies that depend, companies and people who 
depend on cheap electricity.
    Senator Fischer. As you look at the clean power plan, 
however--are you familiar with that?
    Mr. Mack. Somewhat. Not in great detail, but----
    Senator Fischer. And as we look at those proposed 
regulations, the impact they have, and as I said, especially on 
a state like Nebraska, where we have 100 percent public power, 
we have two-thirds of our electricity supplied by coal-fired 
electric plants, coal from our neighbors in Wyoming, and to 
retrofit those plants, it is going to be a cost, and it will be 
a cost to the owners of those plants who are the citizens of 
Nebraska. We are a public power state. We are going to see 
costs to businesses in the products that they produce and the 
services that they provide. That is going to be passed along to 
consumers, as well. And then when you go home and you turn on 
your light switch and you pay your electric bill in Nebraska, 
you are going to be hit again.
    What is the impact of that on families, when we have 
regulations like that? What is the impact, and what kind of 
decisions do you think we ought to be looking at when we make--
when we consider changes in policy?
    Mr. Mack. Well, clearly, anything that raises costs of 
electricity to the consumer are not a good thing for either the 
consumer or business or the economy. So, I fully agree that if 
you are in the mode that you are dependent on coal, and we 
certainly think coal is an excellent and plentiful and 
affordable fuel, that that is going to--that is certainly going 
to have an impact on your state and your citizens. So, I 
certainly sympathize with that and I--you know, it is outside 
of our scope to advocate for some of those policies or against 
some of those policies, but we certainly think that any 
policies that increase the availability of all forms of energy 
are going to ultimately have a favorable impact on all 
citizens, all countries--all states, rather, and all companies.
    Senator Fischer. Thank you, Mr. Mack. Thank you, Mr. 
Chairman.
    Chairman Vitter. Thank you.
    I have been reserving my time. I am going to go ahead and 
use it now, if that is okay with members, in part because Dr. 
Aspinwall is going to have to leave for the airport before too 
long and I wanted to get a chance to ask him a couple things.
    Doctor, you see this booming part of our economy back home 
and you see the enormous need it has created for skills 
training in certain areas. You highlighted in your testimony 
the fact that present federal law and federal policy, for 
instance, regarding Pell Grants actually cuts off access to 
tuition support to a lot of the most efficient and most 
productive training programs on the ground now because the 
programs are too short. I mean, essentially, they are too 
efficient. They give people really good skills that lead 
directly to a great job. They just do not take long enough for 
federal bureaucrats' liking.
    Can you expand on that? And, I assume that means you would 
encourage us to re-look at those Pell Grant and other related 
requirements.
    Dr. Aspinwall. Yes. Thank you, Senator. I go back to some 
of my written testimony. Many of the programs that we develop, 
industry have, I would say, requested, that they have demanded 
these. We are having such a strong expansion in such a short 
period of time that we are having trouble supplying the 
workforce, and the reason we are having trouble supplying the 
workforce is we are trying to put them through our standard 
diploma or degree programs that are set up for at least one 
year to two years.
    So, what they have requested us to do is condense those 
programs and only use the competencies that they know they need 
when they get on the job. But, when we do this, by being so 
efficient and effective, then the federal guidelines from the 
Department of Education do not allow for the use of federal aid 
because they are not the correct number of seat hours or 
contact hours and they do not meet a certain length as far as 
weeks and guidelines.
    So that--many of our students, as I said before, they work, 
so if they are working--and 84 percent of community college 
students work--they cannot quit their jobs and come out and 
take advantage of those. So, we still rely on private 
businesses and private industries to provide scholarships, but 
that is not the long-term solution, because after a while, the 
private industries and private business, we are all going to 
them asking for money and those scholarships run out.
    Chairman Vitter. Right.
    Dr. Aspinwall. So--and again, as I said, some of these 
programs, for instance, the welders, they can go through a 450-
hour program and start out at basically the lowest $26 per 
hour. And before this energy expansion, our welders were making 
$10, $11, $12 an hour. So, the more the need, the acute the 
need gets, the higher the workforce rate gets and the higher 
wages that these companies pay.
    Chairman Vitter. Right. And, just to be clear, the jobs 
that are associated with these accelerated focus programs, they 
are not at the lower end of the spectrum. I mean, they are very 
good paying and good benefit jobs, correct?
    Dr. Aspinwall. Absolutely.
    Chairman Vitter. Can you give us some flavor for what we 
are talking about?
    Dr. Aspinwall. Absolutely. Two of the highest demand jobs 
are process technology and industrial instrumentation, and as I 
said briefly in my written statements, we had to create a 
program that puts students through an Associate of Applied 
Science in just 16 weeks. That is how much we condensed that, a 
two-year program down to 16 weeks. That is an eight-hour-a-day 
program, but those individuals who go through that, they leave 
that program at a minimum salary of around $85,000 a year. That 
is a pretty good return on your investment for around $6,000 
for training.
    Chairman Vitter. Sure. Absolutely. Okay.
    Mr. Slocum, a lot of your testimony is about the price of 
energy related to, say, LNG exports and other export 
opportunities. As I said a minute ago, I disagree with claims 
that we are talking about huge, 50 percent, etc., or even 
double-digit increases, and there are a lot of studies that go 
to that point. But more broadly, would Public Citizen support 
the same sort of rule you enunciated for other American 
produced goods or stock? In other words, if banning exports 
decreases the price to the American consumer, should we ban 
those exports, because surely you can make an argument that 
that would be the case in a wide variety of things, starting 
with, say, food.
    Mr. Slocum. Right. Very good question, Mr. Chairman. I 
think that the unique history and role of energy commodities--
the 1975 Energy Policy and Conservation Act was passed in 
direct response to acute physical shortages of energy 
commodities, particularly petroleum products, that resulted in 
punishing price increases that threw this country into very bad 
economic times. And, so, I think that there is merit for the 
unique nature of certain energy commodities. The inherent 
volatility of----
    Chairman Vitter. Can I ask you--I do not want to cut you 
off----
    Mr. Slocum. Yes, sir.
    Chairman Vitter [continuing]. But my time is running out. 
Surely, you would agree that our understanding of American 
energy resources has been turned upside down since 1975.
    Mr. Slocum. It has been, and it has been turned upside down 
from just a few years ago.
    Chairman Vitter. Right.
    Mr. Slocum. I mentioned in my written testimony----
    Chairman Vitter. So----
    Mr. Slocum. Yes, sir.
    Chairman Vitter [continuing]. What I am suggesting is, 
surely, the premise that Congress used in 1975, I mean, that 
has completely changed, right? That is out the window.
    Mr. Slocum. For now, but there are a number of variables 
that could happen that we cannot predict, disruptions in supply 
and demand across the globe, disruptions here in the United 
States. That is the thing about commodities, and particularly 
with energy commodities. There is no economist that will be 
able to credibly safely predict what the price of a given 
commodity is going to be in the future because of all of these 
unknown variables that go into affecting the price.
    Chairman Vitter. Sort of like corn, maybe?
    Mr. Slocum. I am an energy policy guy. I do not know as 
much about agricultural markets----
    Chairman Vitter. Should we ban those exports?
    Mr. Slocum. If there is a Congressional or data-driven 
determination that there are acute agricultural shortages that 
threaten the American consumer and the American farmer, then I 
do think we should contemplate that, but it is not my 
understanding that that is the scenario today.
    Chairman Vitter. Okay, well, it is not my understanding 
that is the scenario with energy, thanks to abundant American 
energy, either, but I understand.
    Senator Coons.
    Senator Coons. Thank you, Chairman Vitter. Thank you for 
convening this hearing.
    And thank you to the witnesses for your testimony today. It 
is great to see you, and I appreciate your highlighting the 
important role that energy costs, and in particular energy 
efficiency, play in reducing the bottom line cost that small 
businesses face.
    In your testimony, several of you said that for most small 
businesses, energy usage is their single largest business 
expense. The problem is that many small businesses do not have 
the expertise in-house to really analyze, understand, and 
reduce their energy usage, nor do they have the resources or 
capability to hire an outside energy resource expert. And, 
these would be the types of challenges I think we could address 
through the passage of the bipartisan Shaheen-Portman bill and 
through other legislative means.
    As some of you may know, in Delaware, we have a terrific 
resource that helps small- and medium-sized manufacturers 
reduce their energy costs. It is one of the sites of the DOE-
sponsored Industrial Assessment Centers. It is run by the 
University of Delaware and is a terrific resource. I have had 
the pleasure of touring some of the Delaware-based 
manufacturers that they have helped and that have received one 
of the more than 100 energy efficiency assessments that the IAC 
has conducted since 2006. These make a big difference in a 
manufacturing company's bottom line, reducing greenhouse gas 
emissions, as well, and helping to train the next generation of 
engineers and scientists in the field.
    Just one quick example. Hirsh Industries, which 
manufactures storage products--I think that is also called 
filing cabinets--for the office and home, they do a great job 
at it, but they saved $217,000 a year in energy costs through 
the IAC review.
    I would also just like to briefly mention, as Co-Chair of 
the Manufacturing Jobs for America Initiative, I am pleased to 
see support among a number of Senators who have introduced 
bills related to energy efficiency and green tech and the 
future of our manufacturing sector. I, in particular, would 
like to call out Senator Shaheen's leadership on the bipartisan 
Smart Manufacturing Leadership Act, and to highlight Senator 
Hirono's Clean Technology Manufacturing and Export Assistance 
Act, and Senator Merkley's Job Creation Through Energy 
Efficient Manufacturing Act. I think it is great a number of 
Senators have recognized the value of being proactive in energy 
efficiency.
    To Kateri Callahan, if I might, great to see you again. 
Just tell me for a minute, if you would, about energy 
efficiency programs at the federal level that also connect with 
state and local resources like the Industrial Assessment 
Centers or the Weatherization Assistance Program. How can we 
make sure that more small and medium businesses are aware of 
these resources, and what sort of long-term and compounding 
benefit do you see them get from an investment in energy 
efficiency of this type.
    Ms. Callahan. Great. Thank you very much for the question. 
I want to back up a little bit to the talk that so many have 
engaged in on the volatility--potential volatility of price of 
natural gas. One thing that has not been mentioned, and you can 
take out the Alliance to Save Energy, maybe I should note, is 
fuel neutral. We do not talk about it. We just want whatever 
you use, to use it smarter.
    One of the ways that small businesses, in particular, I 
think, can insulate themselves from the volatility in the 
marketplace is to become as efficient as possible. Consumers 
and businesses do not care about the per kilowatt hour cost of 
electricity. They care about what their bill is every month. 
So, if they can make investments, lower those bills, become 
more productive and more competitive, that is what is 
important.
    And, I think that the federal programs are connecting in a 
lot of ways. The Department of Energy funds the State Energy 
Offices, which do a lot of this work through either the Energy 
or the Economic Development Offices. As I said earlier, 
Senator, when you were not in the room, we really need the 
federal government to work at the state and local level and 
with partners and trade allies and organizations that are 
working on the ground, because that is the best way to connect 
with the small businesses, to meet them where they live, to 
talk in the terms that they understand about building and 
growing their businesses and generating jobs and adding to the 
bottom line.
    So, the Industrial Assessment Centers are great. You 
mentioned Pennsylvania. My written example has an example in 
Tennessee, working through the University of Tennessee in 
Murfreesboro and a company that was able to compete better than 
all of its competitors during the downturn in the recession 
because of the energy audits that were done there and the 
improvements made. Those are all across the landscape.
    The Department of Agriculture, through its Renewable Energy 
Assistance--or its Rural Energy Assistance Program and loan, 
they are helping out, too.
    I think one thing that really needs to happen at the 
federal level is a convergence and a one-stop shop, if you 
will, of all the different resources that are available. Folks 
try to do that. The SBA has some of that, but more needs to be 
done and we need a central location for small businesses to 
come and get the help that they need.
    Senator Coons. Well, thank you, Kateri, and I will just 
mention, Senator Shaheen has just introduced a bill, the Small 
Business Energy Efficiency Act, that would expand the eligible 
functions for the SBA 504 loans to include energy efficiency 
work studies, retrofits. I have joined as a cosponsor. I think 
it is a great way to expand some of the reach of the SBA into 
this field.
    I have a bipartisan bill with Senator Moran, the Master 
Limited Partnerships Parity Act, that would make accessible an 
existing financing vehicle that is mostly used for pipelines in 
oil and gas, but it would make it accessible for energy 
efficiency investments, as well. I think we have got a lot of 
work to do together to make sure that energy efficiency is part 
of the menu of trying to reduce the total energy costs of 
American manufacturing.
    Thank you all for your appearance today and for your 
testimony. Thank you, Mr. Chairman.
    Chairman Vitter. Thank you very much.
    Thank you all very much, and certainly this discussion will 
inform in a very important way my work and others' work 
regarding energy legislation affecting small businesses.
    I know Senator Markey has additional questions. I am going 
to invite everybody to submit those for the record, because, 
unfortunately, I cannot stay, and at least one of our witnesses 
cannot stay. But, certainly, everyone is invited to expand on 
questions, and, of course, we will get appropriate answers for 
the record.
    Senator Markey. Mr. Chairman, could I just be recognized 
for 30 seconds?
    Chairman Vitter. Sure, 30 seconds.
    Senator Markey. Thank you, Mr. Chairman.
    I could envision a situation where the negotiation between 
Iran and the United States and the other countries in the world 
go sour, it is rejected in Congress, and one of the options is 
to bomb Iran and its nuclear programs, and I could then 
envision the price of oil going to $5 a gallon, $6 a gallon, 
and I could see American oil here and natural gas here 
protecting us against that, that we were not exporting.
    And, as well, in terms of the economic studies, yes, there 
are some studies that say that there are winners and losers, 
but the winners are the oil and gas companies and the losers 
are the manufacturers, the utilities and consumers and the 
natural gas vehicle industry. So, maybe you can say that, whoa, 
well, look at the tremendous job creation over here for oil and 
gas, but look at all the losers that are left in their wake 
because the price of natural gas has gone up so much.
    So, I just wanted to kind of throw that in, and I will 
submit my questions, Mr. Chairman. Thank you for the 
opportunity.
    Chairman Vitter. Okay. Well, I am sure this debate will 
continue, I have no doubt, so I will look forward to it.
    Thank you all very, very much, and the hearing is 
adjourned.
    [Whereupon, at 3:48 p.m., the committee was adjourned.]

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