President Reagan yesterday was urged at a Cabinet council meeting to set up a commission under Energy Secretary Donald P. Hodel to study the future of government subsidizing the development of a synthetic fuels industry.
Reagan made no decision but took the suggestion, which came from administration officials, under advisement.
Officials of the largest remaining synthetic fuels project, the half-completed, $2 billion Great Plains coal gasification plant in Beulah, N.D., which was subsidized by the Energy Department, have been considering whether to seek additional government aid because falling oil prices have undercut original economic assumptions.
Officials of the Synthetic Fuels Corp., which was established by Congress in 1980 to award $17 billion in price subsidies and loan guarantees to synfuel projects, are preparing to make initial commitments and have indicated they hope to spend most of this over the next year.
One White House aide said the idea of a presidential commission was spawned by concern that a closer look be made at the synfuel subsidies before the money is spent.
Also yesterday, Rep. Vin Weber, (R-Minn.) introduced legislation to abolish the Synthetic Fuels Corp., saying it was "a wasteful government entity promoting, with $17 billion in tax dollars, a technology that is not, and will not soon be, commercially viable."