The House voted yesterday to strip $6.6 billion from the U.S. Synthetic Fuels Corp.'s budget, leaving the agency with no money to fund new projects.
The 312-to-111 vote sets the stage for a likely House vote to abolish the problem-plagued agency early this fall, according to synfuels critics. But the five-year-old Synfuels Corp. still has powerful allies in the Senate, so the agency's future and its funding level remain up in the air, according to congressional staffers.
The House vote came on an amendment to an Interior Department appropriations bill, which was passed late last night, 270 to 143. It was the second major blow this week to the nation's synfuels program. On Tuesday, Energy Secretary John S. Herrington pulled the plug on the country's biggest synfuels plant, the $2.1 billion Great Plains, N.D., coal gasification plant, by vetoing a Synfuels Corp. plan to pump an additional $720 million into the plant to keep it running.
A spokesman for Tenneco Inc., the largest of the Great Plains plant's owners, said yesterday that the consortium plans to meet here today. It is expected to vote to abandon the project. Facing the prospect of more than 1,000 of his constituents losing their jobs immediately, North Dakota Gov. George A. Sinner, a Democrat, flew to Washington yesterday to ask Herrington to reconsider his decision or at least to let the plant shut down more slowly. But Herrington refused to change his mind, according to participants.
Although the Great Plains project was started by the Energy Department, it was taken over three years ago by the Synfuels Corp. and has since come to symbolize many of the problems with that agency. As energy prices have fallen dramatically, the subsidies required to run synfuels plants have escalated. In addition, the agency has been repeatedly criticized for mismanagement and conflicts of interest.
The Synfuels Corp. is "the most wasteful and unproductive agency in the government today," said Rep. Mike Synar (D-Okla.), a prime sponsor of yesterday's amendment to cut off funds for the agency.
Under the amendment, the Synfuels Corp. would be stripped of all its funding authority except for $500 million that agency supporters and opponents have already agreed to transfer to the Energy Department for a program of smaller synfuels projects. In addition, the amendment would not affect three existing synfuels projects that have already received agency contracts.