The chairman of a special Senate budget task force said yesterday a workjble synthetic fels program might be developed for less than half the $88 billion proposed by President Carter.
Sen. Gary Hart (D-Colo.) suggested the price of a synfuels program might be cut down to as little as $40 billion if more emphasis were placed on guaranteed price floors and tax credits to pull industtries into energy exploration.Hart offered these incentives as a substitute for "pushing" industries into the energy field through government-financed loans and construction plans, as the administration has recommended.
Hart is chairman of a synthetic fuels task force recently appointed by Budget Committee Chairman Edmund S. Muskie (D-Maine) to evaluate the impact of Carter's energy independence strategies on the budget.
The task force is meeting with outside consultants and plans to report to the Senate the first week of September. Sen. Majority Leader Robert Byrd has set a starget date of September 15 for floor action on synthetic fuels legislation.
Hart warned reporters yesterday tat the energy security corporation proposed by the president might destabilize the economy. He quoted from a recent Congressional Budget Office study that said the net accumulation of revenues through the corporation "would act as a brake on the economy" in the short run and might be inflationary in the long run.
"Even by conservative estimates," treport went on, "the size of the capital investment by the late 1980s should create bottlenecks in certain sectors of the economy and shortages of materials and skilled labor."
Hart said both the technology and cost involved in a synfuels program are unknowns. He recommended that different methods of producing the fuel be explored through prototype plants.
The administrtion has proposed using the $88 billion it estimates it can collect from the windfall profits tax to reduce national dependence on oreign oil by about three million barrels a day by 1990. It intends to reach this goal by such measures as extracting oil from shale and producing liquid fuel and synthetic natural gas from coal.
Estimates for the price of one synfuel barrel have run as high as $45. The operating price for each plant, according to Hart, may be about $2 billion, and as many as six different plants might have to be built for each extractive process to explore the costs and benfits of alternative technologies. "If you're willing to spend $2 billion a plant, it's fairly easy to come up with answers," Hart said.
Some of the task force goals are to:
Examine the short-and long-term costs to the federal government of the various proposals to explore synfuels production.
Determine the extent to which the activites in each proposal would be "on" or "off" budget, and how the financing mechanisms of each would affect congressional oversight and the need for annual appropriatins.
Determine the extent to which each type of roposed synfuels industry would be dependent on federal subsides and gauge how much government regulation or intervention in the marketplace each proposal would require.
The committe envisions a synfuels industry of 20 to 30 plants, each producing the equivalent of 50,000 barrels of oil by 1990.
Probably only 10 to 20 oil companies would have the economic and managerial resources to explore synfuels production, the budget office report noted.