THE BOARD OF the U.S. Synthetic Fuels Corp. is in an awkward position. It is supposed to be fostering further efforts to produce synfuels even as some in Congress are moving to shut it down. The question for the board members is whether to keep soliciting proposals and committing funds or wait a while. They have decided to go ahead with business pretty much as usual. That is not the right way to proceed.

The corporation was born of the energy shortages of the 1970s. The idea was to create an entire new industry to supplement the nation's dwindling reserves of oil and natural gas. In a world of tight supplies and rising prices the idea seemed to make sense. In the present world energy market it doesn't. Several large synfuels projects have been folded up in recent years, and the agency has had great trouble finding further worthy applicants for the loan and price guarantees it has to offer. Last year Congress, seeking budget cuts, sharply reduced its funding authority. This year the House has voted to eliminate the authority entirely, and the House Energy and Commerce Committee has voted to abolish the corporation.

In the Senate, however, the corporation has strong defenders, including Energy and Natural Resources Committee Chairman James McClure. A proposal by Sen. Howard Metzenbaum to abolish the agency was defeated in the energy committee, 12 to 6. The board, meanwhile, voted late last month to give $60 million in loan and price guarantees to a heavy oil extraction project in Texas. It has also scheduled votes this month on two projects to extract oil from shale. The largest of these involves $500 million in guarantees for Union Oil Co. for a project in Colorado. That would be on top of $400 million in guarantees already given Union.

The agency says it has scaled down its ambitions from earlier days. It now has four projects funded, on which its total exposure is $1.2 billion. It would like to test other technologies by funding some more, but says that by historical standards, these would be modest in size and cost. Thus officials say that about $3 billion in funding authority would probably see the agency through -- and that this is a cheap price to pay for what amounts to a national energy insurance policy.

The argument on the other side -- made by Energy Secretary John Herrington among others -- is that synfuels ought to await both a different oil market and different budget season. The critics say that the synfuels dream is not realistic, and the possible benefits not worth the cost.

They are right. The Senate should go along with the House and shut the program down. It also ought to act quickly, whatever it does, to dispel the present uncertainty. The board, meanwhile, should await congressional guidance, instead of shoveling more money out a closing door.