TESTIMONY BY JIM MARTIN, VICE PRESIDENT MARTIN'S FAMOUS PASTRY SHOPPE, INC.
BEFORE THE SUBCOMMITTEE ON CLEAN AIR, WETLANDS, PRIVATE PROPERTY AND NUCLEAR SAFETY, COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS
OCTOBER 22, 1997, ON S. 1084, THE OZONE AND PARTICULATE MATTER RESEARCH ACT OF 1997

Good day and thank you for the opportunity to be here. I am Jim Martin, an owner of Martin's Famous Pastry Shoppe, Inc. We have bakeries in Chambersburg and Shippensburg, Pennsylvania. Ours is a family business started in 1955 by my parents -- perhaps you have seen our "Martin's Famous Potato Rolls" in the grocery store bread aisle.

Today I am speaking for myself and for the members of the American Bakers Association. The American Bakers Association represents 80% of the wholesale baking business which includes small businesses like ours and the companieswith national brand names that you may know. Bakeries are captured by the Clean Air Act because the natural process of yeast fermentation used to make bread and rolls produces ethanol, an alcohol, which is considered a volatile organic compound (VOC). Ethanol from bakeries is nontoxic and low reactive, probably eaten by bacteria in the atmosphere.

The American Bakers Association strongly supports S.1084. This bill will ensure that sound science and good planning have the time to develop before costly and potentially inappropriate controls are required. The baking industry has already spent $28 million to comply with existing requirements. We estimate that the baking industry will spend $236 million to implement the new standard. The equipment to control bread aroma from a bakery costs about $500,000 to install and costs between $35,000 and $100,000 each year to operate. That is about $12,000 per ton of VOC controlled, not the $1400 per ton estimated by the US EPA.

The American Bakers Association has worked with the bakers in each state and with the state officials to develop reasonable rules to bring the states and industry into compliance. The states have worked hard to implement the Clean Air Act under demanding and often changing EPA policies. We offer our compliments to Pennsylvania and many of the other states where hard work has put the most cost-effective control requirements in place. However, state officials are struggling to further reduce emissions and are being forced to look at smaller and smaller sources, that is, small businesses.

Bakeries are low volume, low profit margin businesses. Let me give you an example of how a small baker might be affected by control requirements. Imagine Joe's Bakery in your state. Joe is operating the white bread bakery he inherited from his father. The bakery has been in business for 80 years with a profit margin of 1.7%. His bakery, like others, is labor intensive, providing jobs at a relatively high pay rate and supporting many families in the neighborhood. No one is getting rich but everyone is being paid and the local area has good tasting fresh bread. His potential emissions of ethanol trigger control requirements. Joe goes to his bank and asks for a loan for the $500,000 to install controls and cut his profit margin by 24%. The bank denies his request, which is good business practice for the bank. If he can find a buyer, he can sell his bakery or Joe can close. Sadly, some bakeries have closed during the implementation of the current standard.

Now let me share with you the situation at our bakeries. We emit enough ethanol to trigger control requirements. Stack testing, permitting, engineering reports, communication, and costs associated with investigating new technology have exceeded $250,000 to date at our bakeries. Our engineers calculate that adding a control device will increase our production energy consumption by 50% per package of rolls. However, rather than purchase the control equipment we have chosen to limit our production and the growth of our business. This means our ability to serve the region with the maximum variety of product or to respond quickly to changes in consumer taste and demand is limited. This is not my understanding of free enterprise. And I've wondered, is less bread on the table a good trade for no measurable improvement in air quality?

I and the bakers I represent urge you to pass S.1084 to make clear legal statements about the funding of the research and science and the timing of the implementation of the air quality standard. Please help us do the right thing to protect our air quality and the earth!

Thank you for this opportunity to speak. I will be glad to answer any questions.