Launched by President Carter with fanfare in 1980, SFC's mission was to shepherd in a new industry -- one that would tap unconventional resources like coal, tar sands, oil shale and heavy crude to meet future U.S. oil and natural gas needs.
As a sign of its commitment to this mission, Congress had empowered the new investment bank to spend up to $88 billion. While the price tag was high, public sentiment in the wake of Arab-oil embargoes suggested that the independence from foreign oil supplies that it promised was worth every penny.
But dissatisfaction with SFC developed quickly. The Reagan administration complained that the new agency's charter -- providing subsidies to private industry for commercial-scale projects-ran counter to free-market principles. Congressional supporters of the agency in turn challenged the good faith of officers President Reagan nominated to run the bank. (For example, prior to chairing the agency, Edward Noble is widely reorted to have advised President Reagan to abolish the agency.)
Before long, complaints developed over SFC's sluggish activity. The agency had initially been expected to approve up to $20 billion in financial backing of loans and product prices to reach its first milestone: the production of 500,000 barrels of crude-oil equivalent daily by 1987. As of July 1985, however, SFC had committed only $1.2 billion toward three projects--and they would yield less than 2 percent of that 1987 production target Congress had set. Then there were scandals, charges of lavish spending and mismanagement by SFC officials (SN: 8/4/84, p. 74).
Congress kills the U.S. Synfuels Corp | Science News | Find Articles at BNET
