The EGR system recirculates exhaust gases (carbon dioxide) back into your intake system, reducing the amount of fresh oxygen entering in the cylinders thus reducing the combustion in the cylinders. Blocking off/ by-passing this system keeps that extra and unnecessary CO2 out of the cylinders, thus netting more oxygen, thus allowing more fuel to burn for better and more complet combustion, thus more power. Also getting you better gas milage. But if you do this you will result in a faliure during emissions inspections.
There are one of two ways to do this. One is to buy EGR blockoff plates. Or for free you can remove it then use the O2 housing flange you already have and find a bolt to put in it then weld it. I'll explan. There is a pipe (about 1/2" diameter) that runs from the rear turbo O2 sensor housing, to the firewall facing side of the intake plenum. This pipe is the "heat riser" tube for the EGR system. Since I removed the EGR control solenoid, and the EGR valve, this pipe had no purpose. What I did, was to hacksaw the center out of the pipe, just leaving the flanged ends, connected by 10mm bolts to the rear turbo O2 housing, and the back of the plenum. I then used an epoxy resin to make a ball, which I jammed into the flanges and smoothed and allowed it to dry. This worked fine on the back of the plenum flange, (it isn't subjected to the extreme heat of the exhaust and turbine side of the turbo)...but the rear turbo O2 housing flange gets hot enough over time to break down the epoxy, and pop it out. So my suggestion is to take a 1/4" drive ratchet with a 10 mm socket, (3/8" drive will work as well, but may be a tight fit in the heat shield) and take out the (2) 10mm bolts, remove the flange from the top of the rear turbo O2 houosing, and either, have the hole welded shut, or clamp it in a vise, and drill and tap the hole for a pipe plug which I would seal with pipe dope (no teflon tape) and reassemble.
Here is a pic of what i did.
Just fine a bolt that fits the flange with out any gab around it. Then cut off the end of the bolt so its flush with the flange. The take a grinder the grind it down flush as posable. Then take a file and file it down the get it to the best shape. Then weld that way the bolt doesn't pop out the top just like i did. Its really easy.
Nate.