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Synfuels Just Telling Its Story, Not Lobbying for Its Survival, Official Says

August 23, 1985

WASHINGTON (AP) _ The Synthetic Fuels Corp. isn’t really lobbying for its survival, but it isn’t just going to quietly fade away either, a top official of the embattled agency says.

Synfuels Vice Chairman Thomas Corcoran told reporters Thursday he has been meeting with members of the House and Senate and western governors. Asked if he was lobbying, Corcoran replied, ″No. I think like anybody else they’re entitled to know what’s going on here.″

The government-owned corporation, founded five years ago to support development of synthetic fuels, is closer than ever to abolition. The House last month voted 312-111 to reclaim $7.4 billion of the $7.9 billion the agency has left, but the Senate has not yet acted.

Among the influentials whose support Corcoran claims is the Reagan administration. The vice chairman released a July 15 letter from John Svahn, head of policy development at the White House, to chairman Edward Noble in which Svahn said the administration believed the corporation would be justified in supporting ″small-scale synthetic fuels facilities that would not become permanent wards of the U.S. taxpayers.″

Meanwhile, minority Republican members of the House Energy and Commerce Committee released a letter to President Reagan asking him to support the effort to abolish the corporation, as he tried to do last year.

The president’s efforts in 1984 led to a compromise with key Senate synfuels supporters that resulted in trimming of the corporation’s funds from $13 billion. The administration has stayed out of this year’s battle.

White House spokesman Albert R. Brashear said Thursday the House members’ letter had not been received. He said the White House was aware of news reports of alleged irresponsible spending by the corporation and would look into them. Corcoran’s briefing about Wednesday’s closed board meeting followed publication in Energy Daily of an internal memo which the trade publication said was a ″plan to build support during August.″

The memo was written by a staff member to present ideas and never was adopted as policy, Corcoran claimed.

″We have no plan to lobby the Senate. We have plans to do our job here,″ Corcoran said.

The memo, which Corcoran released, was written before the House vote. It listed as assumptions ″Senate position weakening - during August recess budget fears will sharpen,″ and outlined several visits aimed at gathering support, such as ″TC works Simpson in Wyoming on naval oil shale reserves during August recess,″ a reference to Senate Majority Whip Alan Simpson, R- Wyo.

As the directors see it, their job includes awarding $774 million in new subsidies for three projects by Sept. 13, the target they set on Wednesday for the staff to reach contracts with project sponsors. The Senate is scheduled to reconvene Sept. 9.

Wednesday’s actions, as revealed by Corcoran, included a decision to kill the second phase of the Parachute Creek shale oil plant in Colorado run by Union Oil Co., which already has $400 million in loan and price guarantees.

The second part of Parachute Creek had been planned for $2.7 billion to quadruple production on a nearby site with different technology.

The first part has never worked correctly, with the cooling chutes for spent shale always clogging after at most a day and a half of operation. The directors voted to collapse the second part of the project into the first, under a new limitation of $500 million on additional aid, and bring a so- called fluidized bed combustor from the second part to replace the cooling chutes.

This will use air instead of water to cool the spent shale, and will employ the heat recovered by the air for greater efficiency.

The other target projects are the Seep Ridge shale oil project in Uintah County, Utah, sponsored by Geokinetic Inc., and Greenwich Oil Co.’s Forest Hill heavy oil project in Wood County, Texas.

Seep Ridge is to get $184 million in aid, up from $45 million originally envisioned. Forest Hill is to get $60 million.

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