The Maryland House Appropriations Committee will take up two unusual bills today to help the state increase its domestic fuel production.
The bills, both introduced by Montgomery County legislators would:
Set up a fund for the state to build its first manufacturing plant -- to produce alcohol for gasohol, the controversial 90-percent gasoline and 10-percent alcohol fuel.
Provide a $5 million incentive for private companies to construct a coal liquefaction plant, a new and costly way of turning coal into liquid synthetic fuel.
The bills will be the subject of public hearings in Annapolis today.
The alcohol fuel plan, introduced by Del. Sheila E. Hixson (D-Montgomery) is unusual because if would give the state ownership of an alcohol fuels plant funded by $4 million in state bonds and a one-cent-per-gallon levy on state fuel sales, according to Hixson's administrative assistant, Chris Weisiger. The levy alone would generate about $21 million a year, Weisiger said.
If passed, the legistlation would establish a fund for the plant which would be the first manufacturing facility owned by the state.
"It's unusual, but there isn't anything wrong with it," said an official of the state attorney general's office. Public funds can be used "if there's some public purpose for it."
Weisiger said the bill was modeled after one passed by the Nebraska legislature. She also said that two Maryland counties are planning to build their own plants.
Hixson's legislation also would reduce the state tax on gasohol sales by 5 cents, Weisiger said. Last year the tax on gasohol was cut by one cent.
The plant would produce about 10 million gallons of alcohol a year which would be used to make about 100 million gallons of gasohol, about one-thirtieth of the state's automobile fuel needs. About 3 million gallons of gasohol were sold in the state last year compared with about 2 billion gallons of gasoline.
Hixson introduced the legislation for the state to own the plant because private companies haven't rushed to produce alcohol, Weisigern said. "If the state had its own plant, it would speed up production," she added.
If 10 percent of the state's corn crop were diverted to alcohol production, it would produce the equivalent of 7 percent of gasoline used in the state, a state study said.
Another alternative fuel bill was introduced by De. Robin Ficker (R-Montgomery). It would authorize the sale of $65 million in state bonds to acquire plan, design, construct and equip a coal liquefaction plant to be built by a private company.
Ficker said that the Maryland plant would have the potential of producing 50,000 barrels of liquid fuel a day.
In contrast, a coal liquefaction plant in Cattletsburg, Ky., designed to be the largest in the country, cost $200 million and is intended to turn 250 tons of coal a day into 625 barrels of "syncrude" that can be refined into gasoline and heating oil. The 625 barels, however, would make barely enough gasoline to supply a single service station.
Ficker said at least 400 million tons of coal would be needed to support the proposed plant. Allegany and Garrett counties in Western Maryland, have one billion tons of coal reserves, he said.
The coal reserve are "being used very little, if at all," Ficker added. They are "just sitting there."
If the bill is passed, Maryland would be the first state to offer such an incentive. But a U.S. Department of Energy study on where synthetic fuels plants might be located indicates that Western Maryland isn't a likely site. Building a billion-dollar coal liquefication plant in the mountains of Allegany or Garret counties would cause far more serious environmental problems than locating the plants in other places, the study concluded.
President Carter has set a goal of producing one million to 1.5 million barrels of coal-derived synthetic fuels a day by 1990.