118 



tunities slip by. And it is imperative that FAS be ready to aggres- 

 sively pursue these exciting market possibilities. 



Thank you, Mr. Chairman, for giving me this opportunity to tes- 

 tify. 



[The prepared statement of Mr. Walker appears at the conclusion 

 of the hearing.] 



Mr. Penny. Thank you, Mr. Walker. 



Mr. O'Connell, welcome. 



STATEMENT OF PAUL F. O'CONNELL, DIRECTOR, ALTER- 

 NATIVE AGRICULTURAL RESEARCH & COMMERCIALIZATION 

 CENTER, U.S. DEPARTMENT OF AGRICULTURE, ACCOM- 

 PANIED BY JOSEPH C. ROETHELI 



Mr. O'Connell. Thank you. Mr. Chairman and members of the 

 subcommittees, as Director of the AARC Center, I value the oppor- 

 tunity to discuss the activity underway in USDA's Alternative Ag 

 Research and Commercialization Center. And per your instruc- 

 tions, I will abbreviate my verbal presentation and enter my pre- 

 pared statement. 



I envision considerable potential to expand the commercial use of 

 ag materials and industrial products for both domestic and export 

 markets. The result will be that farmers and other businesses will 

 generate jobs and economic activity. Much of the ag and forestry 

 material will be processed in rural areas because of the bulky na- 

 ture of the ag materials to be processed, hence providing sustain- 

 able rural development based on the natural and renewable re- 

 sources of rural communities. 



Over the past 7 years, I have helped establish and administer 

 programs as the sustainable ag research and education program. 

 Regional Aquaculture Centers, the work of the Office of Ag Mate- 

 rials, and the AARC Center, all of which received high marks at 

 the grassroots level. I have seen the tremendous progress that can 

 be made by working cooperatively with private entrepreneurs. 



I won't go into the background on why this area is so important 

 and why it is changing around. I would just make a few comments 

 along this line, though. 



In the 1980's and 1990's, we discovered the disvantages of rely- 

 ing primarily on fossil fuels. From an environmental perspective, 

 all kinds of pollution, from acid rain to global warming, from smog 

 to ground water pollution, have been linked to using fossil fuels. 



From a political perspective, rel5n[ng on distant lands for our en- 

 ergy needs imposes very high national security costs. 



From an economic perspective, relying on imported raw materials 

 when local alternatives are available at competitive prices weakens 

 local and regional economies. 



In the 1990's, we may be witnessing a historic turn around in the 

 fortunes of renewable materials. The comparative economics of car- 

 bohydrates and hydrocarbons are changing. Advances in the mate- 

 rials and biological sciences are reducing the cost of manufacturing 

 renewable materials while environmental regulations are increas- 

 ing the cost of hydrocarbon based products. Moreover, the growing 

 environmental consciousness has prompted many customers to pay 

 a green premium for these kinds of products. 



