President Carter, who repeatedly has called for initiative to develop alternate energy sources, this week killed a $368 million package of incentives that Energy Secretary James Schlesinger had promised to Congress and the oil industry.
On Tuesday, Carter overruled Schlesinger's personal appeal for the increase in this year's Energy Department budget, which is now before Congress. The money would have gone to assist private companies in developing such new energy sources as synthetic oil and gas.
"Carter had decided he does not want the overall DOE budget going up . . .," one senior administration official said yesterday. "He doesn't want a bigger deficit or more spending."
The decision is a sharp defeat for Schlesinger, who had made the budget increase the centerpiece of an Energy Department plan to accelerate commercial development of alternate energy sources.
And it has most administration officials without any clear idea of the ultimate fate of the department's plan.
An administration source said Schlesinger is working to ask Carter to reconsider the decision, and conceeded there is a possibility Carter could reverse himself.
A draft of the plan obtained by the The Washington Post calls for up to lion was the first step - in additional lion waw the first step - in additional federal funding by 1985. This would include funding for such incentives as loan guarantees for plants to convert coal to natural gas and money for new research on photovoltaic cells.
The package also contains incentives that would not result in increased federal spending but would raise prices to consumers. They include a program requiring refiners to buy a set percentage of high cost synthetic oil, and a $3-a-barrel tax credit for oil shale.
The president's decision Tuesday also ruled out Schlesinger's request for about $119 million in new funding this year for solar energy and other renewable-energy-source programs such as small hydroelectric dams.
During a Sun Day speech in Golden, Colo., on Wednesday, Carter announced that he was adding $100 million to EOE's solar energy program.
OMB and some senior administration officials now say these funds will be "reprogramed" from within DOE's current budget.
The administration has said it will send Congress the second phase of its overall energy program next year. Called the National Energy Supply Strategy, it is to be a follow-up on the tax and conservation package now stalled in Congress and to concentrate on increasing supplies.
Schlesinger, meantime, had promised to have an interim supply proposal to Congress in May, but the president now appears to have shot that down.
Incentive programs still being weighed by the Energy Department include:
A limited $3-a-barral tax credit for oil shale. plus DOE or Defense Department purchase guarantees, and regulatory rulings affording shale oil the same treatment imported oil gets under DOE's oil regulations.
A combined loan and price guarantee program for expensive oil recovery operations worth $200 million by 1985.
Funding commercial demonstration solvent refined coal plants, that make coal a "clean-burning fuel," proposed by Gulf Mineral Resources on a so-called sole supplier contract basis.