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Hazleton Standard-Speaker, Thursday, Sept. 13, 1979 11 ynthetic fuels: Would crash effort be riding for a fall? By EDWARD NICHOLS poration to support risky energy ventures. Simon's proposal never materialized. Ford's program was slashed by congressional committees to a total of 13.5 billion in loan guarantees and S500 million in price supports. A year after its introduction, the Idea died in the House.
Thus, President Carter is the third chief executive since the Arab oil embargo of 1973 to propose a crash energy program with a heavy emphasis on synthetic fuels. All previous proposals died after bumping into some hard facts. First, synthetic fuels, which range from the distillation of alcohol to making an oil-like product from shale or coal, are inordinately expensive. And the expense is the greatest for those synthetic fuels that can be produced in enough volume to end permanently the stranglehold of the OPEC cartel. Back In 1975, for example, Rockefeller was accused of succumbing to his "Edifice Complex" his penchant for doing things on a grand scale.
President Carter, on the other hand, was mildly applauded by many when he proposed a $140 billion crash energy program. Like Rockefeller, Carter would put most money into a synthetic fuels program to produce million barrels a day by 1990. A warm Congress and potential waiting lines for gasoline probably account in part for the different receptions. Even so, President Carter warned his audience in Kansas City, in advance that the figure be was about to drop was enormous (140 billion! It is. To meet the oft-cited synthetic rubber crisis during World War the United States spent $750 million to build -27 plants.
The United States spent $25 million on-tbe Apollo program to get men to the moon. The entire space program has absorbed $97.5 billion in; tax funds, the Interstate highway system $110 billion through 1977, the Alaska pipeline $7.7 the ill-fated supersonic transport program $1 billion. And the United States spent only $130 million for its share of the St. Lawrence Seaway (Canada's share was $366.5 million) It is not an exaggeration to say that the billions President Carter proposes to spend on a synthetic fuels program would be the most expensive undertaking in national history. And the truth is that nobody is sure what technology is best or what the ultimate cost will be.
Copley Newsservice The United States needs a crash $100 bUllon program to cut tts petroleum umbilical cord to the Middle East. And it should be administered by a new corporation whose goal would be, among other things, to help create synthetic fuel plants that could produce one million barrels of "oil" a day. No, the, -proponent was not President Carter speaking in the Oval Office on July 15, 1979, but President Ford talking to the AFL-CIO Building and Construction Trades in San Francisco on Sept. 22, 1975. And, to give credit where it is due, Ford's idea was not original.
On Feb. 11, 1974, Secretary of Treasury William Simon advocated "undertaking a crash program" to produce three million barrels of oil a day from coal by 1985. Subsequently, President Ford's State of the Union speech in January 1975 asked Congress to finance 20 synthetic fuel plants. And by fall of that year Vice President Rockefeller said that the federal government ought to establish a $100 billion Federal Energy Resources Finance Cor The largest commercial coal-to-liquid-fuel plant in the world today, in South Africa, produces 20,000 barrels a day, or about 5 percent of that country's needs of 84 million barrels a year. South Africa is constructing two more similar plants that will add 80,000 barrels.
Based on that experience, James Mullaway, an official of the Fluor Corp. In Irvine, estimated that it would cost $50-blllion or more to build refineries in the United States that could produce one million barrels a day. Fluor is building the South African plants. On the other band, Walter S. Baer, director of the Rand Corporation's energy policy, said that a plant could cost from $1 billion to as much as $2 billion.
Among the unknowns are bow much the confusion of regulations and strict environmental restrictions in the United States will add to costs. In general, experts agree that oil from shale may be economically competitive if the price of petroleum reaches an average of about $22 per barrel. Oil from coal won't compete until the price of fossil oil is $30 per barrel or more. 'Obviously, building a plant to test technology and costs is not the kind of crash program that the President envisioned. The Fluor and Rand executives said Mr.
Carter's plan is tantamount to a wartime footing, which neither favors. "You've got to walk before you run," Baer said. "We like to sequence plants because you learn from the earlier ones. The more you push, the more you try to compress, the more the costs run up." Mullaway recommends that the program begin with a plant, an Industry standard. After it is a few years into construction, a second identical plant should be started.
That way, the contractor can make the best use of labor and engineering. "That's exactly what we did in South Africa and we are getting that plant built in less than three years," Mullaway said. Experimentation to produce liquid fuel from marlite, or shale, as it is called, is not new in the United States. A consortium of companies beaded by Occidental Petroleum Corp. is constructing a commercial plant in Colorado to extract oil from shale by beating it in underground chambers and pumping out the fluid that seeps to the bottom of the excavation.
It will cost an estimated $1 billion to $3 billion for a plant capable of producing 50,000 to 100,000 barrels a day. A controversy is developing over the large amount of water the plant will need, and environmental problems are troublesome. Gulf, Exxon, Ashland and Mobil oil companies and Southern Company and Dynelectron are experimenting with coal liquification. The Energy Department has funded two prototype plants in Washington and Alabama. Two other plants are under construction in Texas and Kentucky.
A plant capable of producing as much as 100,000 barrels of oil a day may cost $3 billion. In addition to pollution worries, some think that coal liquids may be carcinogenic. Best use of tax revenues isn't the only reason many experts favor a go-slow approach to esoteric fuel substitutes. Another of the dangers of an all-out crash program is that when it's over, the United States may learn that it put the bulk of its energy eggs into the wrong basket. There are other serious reservations.
Economists question whether or not a crash program for synfuel, or synthetic fuel, would divert detrimentally too many of America's economic resources into a single program when there are other pressing needs. Some academics, think tanks and professional engineers are asking if it isn't a mistake to divert so much of the United States' professional talent into one program at the expense of others. Editorialists, political scientists, politicians and others are asking how the addition of two more massive federal bureaucracies the Energy Security Corporation and the Energy Mobilization Board can solve anything. If the Department of Energy, Amtrak and the Postal Service are examples, they may have a point. Environmentalists are fretting over potential shale mining tailings, which are alkaline, salty and hard to restore.
They also are concerned that synthetic fuels from shale or coal will double the output of carbon dioxide that either mineral alone would produce if burned. The National Academy of Sciences says that a carbon dioxide blanket around the earth could warm the atmosphere and lead to severe climate changes. And even President Carter himself has questioned whether the powers that he is proposing for the Energy Mobilization Board are constitutional. There is no doubt that if his program is approved the board could ride roughshod over state and local governments as it cuts red tape to push energy programs. Save Time Pickup Your Airline Tickets At Our Office At Airline Prices.
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