The administration won another energy round in Congress yesterday as the Senate defeated attempts to water down a synthetic fuels bill.
The administration's bill, reported by the Senate Energy Committee, would create a Synthetic Fuels Corp. that would have $20 billion to begin a crash program of synfuel development.
President Carter originally wanted to spend $88 billion on synfuels, with the money coming from a windfall profits tax on oil, but Congress has lowered that figure to $20 billion funded, temporarily at least, from general revenues. After five years, the corporation would submit plans for a $68 billion Phase Two, which would require further approval from Congress to take effect.
By a 57-37 vote, the Senate rejected an alternative proposed by the Senate Banking Committee and backed by the oil industry, business and environmentalists limiting both the size of the program and the government's role.
The Banking Committee bill would have limited synfuel development to 12 plants, 6 in oil shale and 6 in coal liquifaction or gasification. Government financing would have been held to about $3 billion, for loan and price guarantees. No independent corporation would have been created, and the government could not have owned plants, which the Energy Committee bill allows as a last resort.
Another "compromise" alternative offered by Sens. Paul Tsongas (D-Mass.) and Gary Hart (D-Colo.) also failed. It would have set aside $14 billion on synfuel development, but allowed no government-owned facilities and would have created an Office of Energy Security in a federal agency rather than a semi-independent corporation.
The Senate voted to table the Hart-Tsongas bill by a 55-to-37 vote.
Events in Iran were "very helpful" in passing the administration-backed proposal, the proposal's floor manager, Sen. Bennett Johnston (D-La.) said. Although he couldn't attribute any vote switches directly to the Iranian crisis, he said Iranian developments were "having a massive effect on public psychology" and lent a sense of urgency to the administration bill on the floor.
Jackson said adoption of what he called the "puny" Banking Committee bill would send the wrong signal about America's determination to fight the Organization of Petroleum Exporting Countries and become energy-independent."As of yesterday, there was a cutoff of oil delivered by Iran. I suggest we send a strong signal we are making a beginning and a strong beginning, not a puny beginning," he said.
Banking Committee Chairman William Proxmire (D-Wis.) argued he was not antisynfuel, but a "crash program would be less efficient," more inflationary and would compete with the private sector.
Jackson said the $20 billion to be spent over several years wasn't costly in light of the fact that the United States is spending $70 billion to import foreign oil each year.
Senate Major Leader Robert Byrd (D-W. Va.) predicted gas lines would be back and added, "the American people are watching to see if Congress is going to commit the country to a program" which would develop more fuel.
The Energy Committee's bill provides for price guarantees, purchase agreements, loan guarantees, direct-loan, and joint government-private ventures to stimulate investment in developing costly and risky synthetic fuel. If all else fails, the bill allows three government-owned, contractor-operated facilities (COCOs) to be built.
Business and oil interests don't want the threat of COCOs, which they say would amount to government interference in energy producers' business. An attempt to knock out this portion is the last major fight left over the synthetic fuels program.
A second portion of the bill providing for conservation measures for home and commercial weatherization will be taken up later.
Meanwhile, a House-Senate conference on an Interior Appropriations bill approved the funding of $20 billion for synthetic fuels.