'Synfuels' bill passage gives Carter a victory -- and a problem
Congressional agreement on legislation to spur development of synthetic fuels gives President Carter a victory -- and a problem. The victory is a compromise that probably clears the way for enactment of one of the last two major elements of the President's year-old national energy plan.
The problem is the inclusion of an unasked-for provision ordering Mr. Carter to resume filling the nation's strategic petroleum reserve -- and risk a retaliatory cut in Saudi Arabian oil production.
The petroleum reserve, a 750-million- barrel supply to be stored in salt domes in Louisiana and Texas -- enough oil to fuel the nation for roughly four months in case of a future cutoff -- has remained seven- eighths empty for nearly a year because of market instability and Saudi objections.
The Saudis and other foreign oil producers oppose the American petroleum reserve as a device to blunt the power of the oil cartel.
The congressional provision, agreed to June 16 by Senate and House of Representatives conferees in resolving the differing versions of legislation passed by the two houses, directs the President to "commence crude oil acquisition immediately" and pump it into the reserve at the rate of at least 100,000 barrels a day starting in the fiscal year beginning oct. 1.
Compounding the political problem for Mr. Carter, the cost of filling the salt domes with oil may be borne in this election year by American motorists.
Gasoline prices could rise by nearly a half-cent per gallon as refiners pass along the cost to consumers under the payment arrangements worked out by the conferees.
The "synfuels" legislation to which the oil reserve provision is affixed also is designed to lessen American dependence on imported oil.
It would provide, through a federal corporation, billions of dollars in subsidies for private development of nonpetroleum fuels -- using everything from coal to garbage.And the corporation also would make grants to stimulate solar energy and conservation projects.
The goal is enough synthetic fuels to offset 8 percent of current oil imports by 1987.
The bill, over which the conferees had labored since December, is expected to be enacted by both houses by the end of this month and sent to the President for his awkward decision on whether to sign it.
That will leave just one major ingredient of the Carter energy program still to clear Congress: the President's proposal for an Energy Mobilization Board to cut the time it takes priority energy projects to get approval at the local, state, and national levels.