House and Senate conferees agreed on broad outlines yesterday of a $20 billion program to develop synthetic fuels, as proposed by President Carter.
The conferees tentatively adopted an eight-point plan, proposed by House Majority Leader Jim Wright (D-Tex.), that would establish an independent synthetic fuels coporation to run the program. The Wright plan sets a goal of not less than 2 million barrels of synthetic fuels production a day by 1992 and would authorize $20 billion for this as the first phase of the program.
"I think we've come to a tentative agreement that . . . will give us a bill soon," Senate conference leader J. Bennett Johnston (D-La.) said. Wright said the synthetic fuels part of the pending bill should be finished by the beginning of the Christmas recess next Friday.
However, work on a second part of the bill, a $6 billion conservation proposal, probably will go over until next year. So far, the Senate has been reluctant to break up the two parts and pass a synthetic fuels bill separately, so final action on the bill might have to wait for next year.
Wright said yesterday's action "sends a message" to the Organization of Petroleum Exporting Countries, meeting this weekend to discuss oil price increases, and to Iran "that we are going to have a strong synthetic fuels program and we are going to have it soon."
Wright said the bill "ought to stimulate an enormous amount of private investment" in synthetic fuel production.
The proposal the conferees adopted is drawn from the Senate bill and would set up a hierarchy of mechanisms to stimulate production. First would come loan guarantees, price guarantees and purchase guarantees.
Wright said these three mechanisms should be first because they can stimulate production without "calling down a penny of the taxpayer's money."
Three other mechanisms in the heirarchy would require government spending. They include joint ventures, cooperative ventures and, as a last resort, government-owned and contractor-operated synthetic fuel plants.
Until the synthetic fuels corporation became fully operational, a House-passed bill providing for loan, purchase and price guarantees under the Defense Production Act would be in effect. This would allow the government to purchase synthetic fuels for defense needs. Once the corporation was operational, these activities would be merged into the corporation.
The corporation would have a 12-year life with an annual ceiling for administrative expenses of $35 million, adjusted for inflation. It would have a limit of 300 full-time professional employes.
Plans for a second phase of snyfueld development costing up to $60 billion could be submitted to Congress by the corporation not later than four years after enactment of the first part.
Carter planned to finance this synthetic fuels proposal out of his proposed oil tax. The bill in conference does not address financing.
Meanwhile, conferees on another major energy bill -- a proposal to establish an energy mobilization board to cut red tape for synfuel production and other projects -- began debate on the main issue in disagreement between the House and Senate.
That issue is whether to allow the board to waive federal laws, subject to the approval of Congress.The Senate version would not allow such a waiver; the House version would.