WASHINGTON, D.C., May 2004 – Witnesses representing the U.S. metals industry today endorsed H.R. 3890, a bill introduced by Representative Melissa Hart (R-PA) that would reauthorize the Metals Initiative, a research and development (R&D) program at the Department of Energy (DOE) that supports energy efficiency efforts of the domestic metals industry. Testifying at the same hearing, the Administration did not take a position on the bill, but said it did not oppose continued funding for the underlying program.

The witnesses at today’s hearing were Mr. Douglas Faulkner, Principal Deputy Assistant Secretary for Energy Efficiency and Renewable Energy at DOE; Mr. Richard Shulkowsky, Vice President of INTEG Process Group, Incorporated; Ms. Lisa Roudabush, General Manager for Research for United States Steel Corporation; and Dr. Ronald Sutherland, an independent consulting economist.

“We have a strategic national interest in helping our metals industry remain competitive,” said Energy Subcommittee Chairman Judy Biggert (R-IL). “For any industry, energy efficiency means that you achieve increased production without increased energy consumption or costs. Improving energy consumption helps improve the bottom line, making American metal products more competitive on the global market. That means more jobs here at home.” Biggert continued, “But energy efficiency is more than just lower costs. Reducing energy use means reducing our emissions of pollutants and greenhouse gases, and increasing our energy security. In this way, energy efficiency just makes sense – dollars and cents – for the nation.”

Representative Hart said, “It is vital that we give every advantage possible to our steel industry, ensuring that it remains competitive and innovative. This legislation is not just concerned with improving the industry, however, it also seeks to improve energy efficiency and the environment through partnership with federal agencies and funding for research.”

Subcommittee Ranking Minority Member John Larson (D-CT), said, “It is no secret that our domestic manufacturing capabilities, much of which rely on high quality metals, are quickly heading overseas. Once they are gone, these are jobs that we won't get back. I believe that the federal government has an obligation to utilize its vast resources to facilitate cooperative research and development with industry. Through initiatives like the Metals R&D Program at DOE, we ensure that U.S. manufacturers remain not just competitive, but leaders in this field.

Describing the implementation of the Metals Initiative, Faulkner said, “The program promotes collaborative, cost-shared, public-private research and pre-competitive development, bringing together the expertise and experience of the metals industries, the DOE national laboratories, universities, states and others.” Explaining the significance of the program, Fulkner added “[S]teel production is one of the most energy-intensive industries in the United States…. While the steel industry has made significant progress in reducing energy intensity over the past several decades, the U.S. steel industry consumes approximately two quadrillion Btu’s of energy each year, accounting for about two percent of all U.S. energy consumption. The cost of purchasing this amount of energy represents about 15 percent of the total manufacturing cost for steel.”

“I believe the Metals Initiative must be re-authorized and continue to be funded,” said Shulkowsky. “We need the U.S. steel industry and we need it to be competitive through innovative research.” He continued, “Steel companies collaborate to develop new technologies, which will provide them with a competitive advantage versus foreign steelmakers. By developing new technologies, they can lower their cost and improve the performance of the steel they produce, which in turn lowers their customer’s cost.” Shulkowsky told the Subcommittee that the U.S. metals industry needs to maximize its competitiveness in terms of energy efficiency to remain internationally competitive.

Offering her endorsement of the legislation, Roudabush said, “The Metals Initiative is the only federal program I am aware of that specifically cites competitive advantage as a goal. The results of our Metals Initiative research propagate through the entire supply chain of materials – higher performing steels equal higher performing consumer goods and a cleaner environment.” Citing examples of such programs, Roudabush described the development of Advanced High Strength Steels (AHSS) that “enable the design of automobiles that are lightweight while retaining all the safety and affordability of a basic carbon steel.” She added that the automotive industry is rapidly deploying such metals and said that nearly 50 percent of the steel used in the 2004 Chevy Malibu and Chrysler Pacifica vehicles is AHSS.

Sutherland offered suggestions to improve the program including: ensuring benefits accrue only to U.S. companies; more clearly specifying long-term goals of the program; and mandating greater external review.

The DOE efficiency R&D program was first authorized by the Steel and Aluminum Energy Conservation and Technology Competitiveness Act of 1988 and was reauthorized in the Energy Policy Act of 1992. H.R. 3890 would reauthorize the Metals Initiative through fiscal year 2009 and would make other minor modifications to the current law such as provisions to: include the potential for technologies to reduce greenhouse gas emissions as a consideration in research planning; repeal a section related to programs at the National Institute of Standards and Technology that have been inactive; and reestablish a requirement for an annual report to the President and Congress on R&D activities carried out under the program.”

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