The Federal Fiasco on Energy Goes On and On

September/28/2011 16:33PM
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I read this somewhere:

They said it couldn’t be done.

So I went right to it-that thing they said

Couldn’t be done.

And, I couldn’t do it.

This was written in Time Magazine on Monday, May 14, 1984.


Portrait of a Federal Fiasco

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The Synthetic Fuels Corporation is mired in mismanagement

In the dark days of the Iranian Revolution in 1979, Jimmy Carter left a week-long retreat at Camp David with a plan to free the U.S. from its bondage to OPEC oil. He proposed creating an $88 billion Energy Security Corporation that would encourage alternative energy projects, primarily through loan and price guarantees. The ambitious goal to produce the equivalent of 2.5 million bbl. of oil per day by 1990. When Carter signed the Energy Security Act on June 30, 1980, he declared, “The keystone of a national energy policy is finally being put into place.”

Four years later, the Synthetic Fuels Corporation is in a shambles. Bankrolled by a onetime $15 billion congressional appropriation, the SFC has financed only two projects. In the past year, charges of gross mismanagement and top-level resignations have plagued the 175-member SFC staff. Michigan Democrat Howard Wolpe has gathered 188 House signatures on a bill to block the SFC from spending any more money until Congress figures out what the agency should be doing. Says Wolpe: “We have created a fiscal Frankenstein that is beyond the control of the Executive and Legislative branches.”

The latest chapter in the synfuel saga began two weeks ago with the resignation of Victor Thompson, 59, who had been the SFC’s $135,000-a-year president for just two months. Thompson’s departure means that the SFC board does not have enough members to conduct business legally. Thompson had replaced Victor Schroeder, the organization’s first president, who resigned from the post in August amid a flurry of allegations, among them that he had charged $25,000 in home interest payments to the corporation. Just days after Thompson accepted his new job, the Securities and Exchange Commission filed a complaint against Utica Bankshares of Tulsa, a bank holding company that Thompson had recently headed. The SEC charged that Utica had violated federal securities laws in 1982 by underreporting its estimated losses. Thompson had failed to let other board members know that his bank was the target of a securities probe. It has also been disclosed that while serving on the SFC board, Thompson tried to sell Utica stock to Texas Oilman Belton K. Johnson, even as Johnson sought multimillion-dollar subsidies from the SFC for two tar-sands projects. Last week the agency asked the Justice Department to look into bringing criminal charges against Thompson.

Lost amid the continuing turmoil is the SFC mandate to increase the U.S. energy supply. So far it has granted $120 million for the Cool Water Coal Gasification Project in the Mojave Desert and $620 million for a coal gasification project in Plaquemine, La. The agency has issued letters of intent to four other projects, including one for $365 million to Signal Energy Systems’ Northern Peat Project in Maine and another for $790 million to the Great Plains Coal Gasification Project in North Dakota, which has received $2 billion in loan guarantees from the U.S. Energy Department. Energy Secretary Donald Hodel acknowledges that “drilling in America would produce much more oil” than the SFC will get for its $15 billion.

Read more:,9171,955274,00.html#ixzz1ZCH1efwQ

Look up these investments: Cool Water Coal Gasification Project in the Mojave Desert($120MM), Signal Energy Systems Northern Peat Projet n Maine($365M), Great  Plains Coal Gasification Project in North Dakota($2B).  All told Carter, a piker, blew $15B right out of the box on trying to pick winners in energy. Proof that he’s the only president worse than Carter, Obama will far exceed that number.
Every president since Carter has tried this. Nixon had the commerce secretary, Peter G. Peterson( now extremely wealthy) announce “initiatives” but Nixon was gone before they could be implemented. 
Ford created ERDA to jump start what was called the  Manhattan Project and Apollo 11 combined. Nothing happened
Obama went to Brazil and fell in lust with ethanol. But, always overlooking the obvious he didn’t see the differences. Brazilians have lots of sugar cane and cheap labor. We have corn and using it drives up food prices. Obama will mandate conservation by fuel mileage requirements. But, Detroit, as always, will make a lot of small cars and lots of luxury SUV’s and nothing will happen. Obama wants us to cut imports by a third. No plan, just a goal.
Here’s the answer, President Obama, read paragraph one of this blog. It ends, ” I couldn’t do it”. 
P.S. Here’s an update on Cool Water Coal Gasification:

Despite its technical success, the process is fairly expensive. Edison said Cool Water electricity costs between 10 cents and 11 cents per kilowatt hour, contrasted with the 6 cents per kilowatt hour to produce electricity by burning oil or natural gas.

Edison, however, is paying market rates for the Cool Water electricity. The 4- to 5-cent-per-kilowatt gap between market rates and what it costs to produce Cool Water electricity is covered by a five-year, $120-million U.S. Synthetic Fuels Corp. grant. Cool Water used $9.1 million of the grant money through May to help cover the difference, said Vernon Shorter, a Cool Water spokesman

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