The House Energy and Commerce Committee voted yesterday to abolish the remains of what once was a $20 billion synthetic-fuels program to wean the nation from imported foreign oil.
By voice vote, the 42-member committee approved a bill that would abolish the Synthetic Fuels Corp. in 90 days and take back most of the $7.9 billion it still has for subsidizing projects to convert coal and shale to liquid and gas fuels.
The Department of Energy would retain $500 million of that money for a much smaller synfuels demonstration program.
The bill also would limit government price supports for the synthetic oil or natural gas that a project might produce to 125 percent of the market price for conventional fuels.
A primary criticism of the Synfuels Corp. the past two years was its willingness to guarantee developers two to three times the current market prices for oil and natural gas.
The legislation will provide "a sound and reasonable synthetic-fuels program while saving taxpayers more than $6 billion," said Rep. Mike Synar (D-Okla.), a vehement critic of the quasi-governmental corporation.
Congress set up the corporation in 1980 after the Iranian revolution caused oil prices to double. Oil prices have dropped about 30 percent in the last two years, however, and many analysts predict that they will go even lower before they begin rising again in two, three or four years.
The legislation now moves to the House Banking Committee, which shares jurisdiction over the synfuels program. However, that panel's economic stabilization subcommittee does not plan to hold a hearing on it until at least September.