Robert A.G. Monks Ram Island Farm Cape Elizabeth Maine 04107 environment, success is not a matter purely of money. We don't yet know whether direct negotiations will be successful; or indeed if there is any inducement sufficient to develop a coal liquifaction project. Nor do we know whether any financial package less costly than our Convertible Loan Guarantee / Price Guarantee ("We loan you the money, and then we give you the money to pay back the loan.") will elicit private sector interest. Only when these questions are answerable can I feel comfortable in addressing myself to the major requirement of the ESA the production goals, mandated in $125. The statute is unequivocal, it is repetitive, it is undeniable that Congress has specifically established production goals from synthetic fuels as the nation's policy. It is not within the power of the SFC Board to modify or to fail to comply with this mandate. Notwithstanding our commitment to exploration of diversity, both in technologies and resources, we must address $125. We know enough now to be able to conclude that shale and coal based plants will not importantly contribute to the goals. We are driven to consider the cost, timing and volumes producible from heavy oils and tar sands. We should even utilize the power to get access to Western Hemisphere reserves like Canadian tar sands and Venezuelan heavy oil ($179). My comments above are not complete, but may serve to illustrate my feelings that we collectively must decide on the basic philosophical character of the RCS, before we can definitively understand necessary precedent steps and timing. On the assumption that we will want to be able to report something based on our own experience about (1) coal and (2) direct negotiations, we should not hesitate to make the findings set forth in $131 (b) (4) so that the Energy Committee of the Senate and the Speaker of the House can authorize us to proceed. We also will need to determine whether to transmit to Congress a "Corporation synthetic fuel action " authorizing Western Hemisphere projects. I feel that we should aggressively use the financial mechanisms authorized by statute so as to give us market place experience in their receptivity. Robert A.G. Monks Ram Island Farm Cape Elizabeth Maine 04107 The most important open question in my mind is whether a government sponsored entity can ever acquire a degree of legitimacy or credibility in the private sector so as to permit efficient interaction. Project Indigo suggests that SFC has failed to do so. If we cannot realisticly conclude that a cooperative relationship is feasible, aren't we driven to conclude that government must directly finance and/or operate special purpose facilities in areas that it considers to be in the national interest? When we have decided on a philosophy and on the steps necessary to test it, then we will be able to conclude timing. If SFC is permitted a succession of one year extensions, it is clear to me that an RCS that is responsive to the requirements of Subparagraphs ¶¶ A through F will need several years. If on the other hand, the choice is "84" or "85" I would prefer directly to confront the limited scope of what our experience permits us to conclude and save the operating expenses post June 30, 1984. I feel that deferral up to June 1985 will not really give significant additional operating experience as a basis for the RCS. Of course, more time is always desirable. The only question is balancing costs and benefits. #4 - Organization Because the RCS is required to emanate from the Board of Directors, it would be preferable to have its preparation supervised by a committee of the Board. However, I fear that no Director has the time necessary to provide the leadership for such an undertaking (If any one does, I would support their chairmanship of an RCS Committee). It seems to me therefore practical to have the Chief Operating Officer develop a staff and program for this aspect of SFC's responsibilities, keeping in mind the particular needs for continuing involvement by the Board as a whole in developing the final plan. I find at the present time that my experience at SFC gives me no unique knowledge as to ¶¶ B,C,D & F. I can't believe that the public interest is served by continuing our present levels of overhead so that I can hire consultants to give me a basis on which to develop insights to pass on to the Congress. Surely Congress can do that for itself, without the cost of our operation. Our management challenge has been to Robert A.G. Monks Ram Island Farm Cape Elizabeth Maine 04107 organize the resources of SFC so as to develop a practical experience basis for the conclusions we are required to draw in the RCS. If we have not done so, we should recognize this shortcoming directly and (1)either submit a report frankly acknowledging the limitations of our experience or (2) commit ourselves to a process that will last substantially longer than June of 1985, but that will provide the kind of "hard" data that Congress probably intended (maybe, a little impractically). I really am very much opposed to trying to pass off second hand expensive speculation as a helpful contribution to the nation. Finally, I very much enjoy the lecture series we're now engaged in. past and I would like to hear from the Congressmen, Senators and staff present most involved in the ESA who can share with us all a wider perspect Best Regards, R.A.G.M. I want to thank you for excusing me from hearings to be held by is most appreciated. Your consideration and thoughtfulness I expect to attend the Corporation's Board meeting Thursday, I considered my appointment to this position of part-time The Energy Security Act establishing the United States Synthetic 24-125 0-83--16 The Honorable William S. Cohen Page 2 Next month will be the first anniversary of the full Board of Directors, the Fall of 1981 being the time of confirmation of a sufficient number of directors to be a quorum. When one thinks of assembling a staff of scientists, engineers, financial professionals, and lawyers necessary to meet the challenges mandated by the Act in such a short period of time it presents quite a challenge. I think the foundation has been laid. I think a few mistakes have been made as it is not possible to avoid imperfection. I think the diversity of thinking on the Board combined with the qualified talent assembled has and will continue to correct mistakes and progressively strengthen the Corporation. I would like to give credit for this to our Chairman and Chief Executive Officer. I have absolute confidence in his capacity, integrity, dedication, and loyalty. The responsibility of molding a business Goliath that by law must have in place a diversity of resources, diversity of technology, geographic distribution along with suggested production goals--all of which must be achieved with little or no impact on the environment--is unique. I believe communication with industry in general and current project sponsors in particular is improving. This carefully molded Goliath has taken shape and is ready for its first steps. It appears the first award is imminent with subsequent awards practically mature and our comprehensive strategy due to Congress next Spring is underway and progressing in a timely manner. I believe the development of this industry is vital to the welfare of our country and the law providing for this is the least Government intervention possible under present economic conditioning. I further believe the encouragement provided private enterprise is essential as economic conditions, tremendous capital outlays, and long lead times required would never be undertaken without this Congressional foresight. |