Oversight of the Management of the U.S. Synthetic Fuels Corporation

Staff present: Susan M. Collins, staff director; Mary B. Gerwin, counsel; Rachel D. Harlan, assistant chief clerk; Linda J. Gustitus, minority staff director and chief counsel to the minority; Carla Kish, professional staff member; and Nancy Evans, intern.

OPENING STATEMENT OF SENATOR COHEN

Senator COHEN. The subcommittee will come to order.

The Subcommittee on Oversight of Government Management is holding 2 days of hearings this week on the management of the Synthetic Fuels Corporation.

Created in 1980, in response to widespread concern about the country's dangerous dependence on imported oil, the Synfuels Corporation fosters the development of the commercial synthetic fuels industry through the use of purchase agreements, price and loan guarantees and joint ventures. In the Energy Security Act, Congress established a national goal of achieving a synthetic fuels capability equivalent to 500,000 barrels of crude oil a day by 1987, increasing to 2 million barrels per day by 1992.

During the first phase of its existence, the Corporation is empowered to obligate up to $20 billion in financial assistance to worthy projects. Potentially, the Synthetic Fuels Corporation may place at risk $88 billion through investments in synthetic fuels production. Congress viewed the Corporation's task as so urgent and the energy crisis as so severe, that it exempted the Synthetic Fuels Corporation from many of the usual statutory restraints that govern-and limit-the authority and operations of Federal agencies, despite the fact that the Corporation is funded entirely from the Federal Treasury. The Synthetic Fuels Corporation, for example, is not subject to the Administrative Procedure Act or the Federal procurement laws, and its directors can only be removed from office for neglect of duty or malfeasance.

The Corporation was given this enormous latitude and freed from the standard ties that bind most Federal departments, so it could function more like a private entity, an investment bank.

Congress, in essence, gambled that the Board of Directors of the Corporation would be competent, bold, decisive and efficient, and could be trusted to invest billions of dollars wisely in synfuels projects that would help our Nation to be energy self-sufficient and no longer dependent on the whims of a Colonel Qaddafi or the machinations of an oil cartel.

Although the Synthetic Fuels Corporation is largely unfettered by statutory restrictions, Congress never intended that it should be immune from public scrutiny and accountability. Indeed, the debate on the Energy Security Act reflects considerable congressional concern over the unique nature of the Corporation, the lack of limitations on its powers and the extent of its accountability to Congress. A vigorous congressional oversight is all the more essential, precisely because the normal statutory safeguards and guidelines are lacking.

Our hearings today will examine how well the Corporation has met the test of congressional confidence and whether our high expectations have been fulfilled. The subcommittee's primary focus is on the operation of the Board of Directors, which governs the Corporation, and on the economy and efficiency of the Synthetic Fuels Corporation's administrative practices.

Before signing off on the second phase of the Corporation's activities, Congress must insure that the Synthetic Fuels Corporation's actions to date warrant the release of billions of tax dollars that could be available for synfuel projects in the 1980's. We must determine whether the promise of the Energy Security Act has been fulfilled and whether the public interest has, in fact, been protected. My personal belief is that the development of a viable synthetic fuels industry should remain a top priority. While the current oil glut may have dulled our memories of the long gas lines and home heating oil shortages of the 1970's, we simply cannot ransom our Nation's future by failing to develop dependable, alternative domestic sources of energy. The Middle East is too unstable and our oil resources too limited for us to ignore the inevitable realilty of future energy shortages.

Troubling questions, however, have been raised about the management of the Synthetic Fuels Corporation, and they range from charges of extravagance to contentions that the Board of Directors is so polarized that it is paralyzed. I have no interest in any personal disputes or animosities among the Board members. Divisions of the Board concern me, only if they have impaired the ability of the Board to carry out its statutory responsibilities, and that is a legitimate concern for this subcommittee.

I have followed the Board since I voted for its creation in 1979, and during the past year I have watched its activities particularly closely and discussed its problems with a number of my Senate colleagues.

The mandate of the Oversight Subcommittee is to examine the "economy, efficiency and effectiveness of government operations." These hearings follow a number of extensive subcommittee investigations into such issues as "hurry-up spending" by Federal agen

« 이전 계속 »

도서

Oversight of the Management of the U.S. Synthetic Fuels Corporation ...