You might think that President Reagan, the unsleeping enemy of government subsidies, the would-be slayer of free-spending federal agencies, would be leading the charge to eliminate the Synfuels Corp.
You might also think that the chairman of the Senate Budget Committee, Pete V. Domenici (R-N.M.), who is crouched over the federal budget trying to squeeze out every dime not worthily spent, would fall upon Synfuels as a candidate for extinction.
Budget director David A. Stockman, gimlet-eyed monitor of profligate farmers, welfare cheats and greedy seniors, thinks the Synfuels Corp. is a "waste" -- but he negotiated its survival last year.
You would assume, perhaps, that the House Democratic leadership, ever ready to pounce on Reagan for partiality to the rich, would be poised to strike at an agency that doles out billions to corporations, many of which pay no taxes.
That is not the case. House Speaker Thomas P. (Tip) O'Neill Jr. (D-Mass.) wrote the president last year of the support the program enjoys among House members. And Majority Leader James C. Wright Jr. (D-Tex.), who rails that the agency's performance is "abysmal," is its most vociferous and important champion in the House.
Synfuels is like the MX missile. It deserves to die, its strongest advocates don't have a good word to say for it and the arguments made for it are not made on the merits. In a "dear colleague" letter stressing "energy independence," Wright and the other signers said "Synfuels is an American option, using American energy sources, American workers and American coal." Like the MX advocates who took the argument to Geneva, they are making the case for Synfuels in the Strait of Hormuz, which might close because of the Iran-Iraq war.
Synfuels was conceived by President Jimmy Carter in the depths of his malaise over the gasoline lines during the Iranian hostage crisis. It was intended to be a crash project to overcome America's dependence on imported oil and to produce cheap alternative energy. Congress voted an initial authority of $20 billion for a goal of 500,000 barrels of oil a day by 1987. But while world oil prices sank to $36 a barrel, the cost per barrel of synfuel went to $90 because of insufficient research and inadequate technology.
In the first four years of its existence, Synfuels has produced a thin trickle of alternative energy (from a project that was 90 percent complete when Synfuels stepped in) and barrels of scandal -- five members of the board had to resign because of conflicts of interest.
Horror stories about high salaries, high living and bad judgment abound. One example: Synfuels gave a letter of intent for $42.6 million in loan and price guarantees to an entrepreneur for a tar sands project, only to discover that the richest deposits lay at the bottom of a lake and the enterprise would require strip mining in a state park.
If the same kind of means test proposed for student loans were applied, the Synfuels faucet would go dry. Dow Chemical was awarded price guarantees of $620 million for a plant that cost $150 million. Dow's profits for 1981 through 1983 were $776 million, tax-free.
Last year, a couple of determined House Democrats, Mike Synar (Okla.) and Howard E. Wolpe (Mich.) managed to cut the agency's allowance by $5 billion, leaving it $13 billion to bestow on corporations.
This year, with the help of two influential committee chairmen, John D. Dingell (D-Mich.) of Energy and Commerce and William H. Gray III (D-Pa.) of Budget, Synar and Wolpe are going in for the kill.
One of their principal opponents is the new vice chairman of Synfuels, Tom Corcoran, who, as an Illinois representative, was an eloquent ally. In an open letter to the Synfuels Board in 1982, Corcoran said: "The idea of a commercial synthetics fuels industry is the kind of fantasy from which government boondoggles are born."
But Corcoran was appointed vice chairman of the board by Reagan and is now lobbying hard to keep Synfuels afloat. He claims that with a scaled-down mandate and budget Synfuels will do what it should have done in the first place: conduct research into the technology rather than trying to rush synfuels products into the marketplace.
In a debate with Corcoran last week, Wolpe said the "new reality" outlined by Corcoran will provide no comfort for the taxpayer. "By offering price supports to small-scale projects that may never be economically viable, you run the risk of creating a corporate entitlement program."
Wolpe contends that everything Synfuels is supposed to do can be accomplished, better and more economically, in the Department of Energy, which is, by the way, one of the pestilential federal agencies that candidate Reagan vowed in 1980 to send to the chair.