Carter's road to synfuels may face a Reagan detour

Is the US Synfuels Corporation about to run headlong into a Reagan administration roadblock? On the bright June day that President Carter signed the corporation into law, he said that it would "launch this decade with the greatest outpouring of capital investment, technology, manpower, and resources since the space program."

The road for synfuels seemed as smooth as a new stretch of Interstate. But then Mr. Carter exited in the slow lane, and the corporation's future -- like that of many government programs -- was suddenly uncertain.

No one has yet been named to drive the organization. Its seven directors have indicated they will step aside for a new team, but they haven't yet been replaced.

John C. Sawhill, the corporation's current head, got his job through a recess appointment by Mr. Carter. He still comes in to work, but there seems little doubt he will soon have a successor. The real question is whether the new administration will park the synfuel programs and throw away the key.

"The sense I get is that the corporation is going to continue pretty much at the pace it's been going,' says Bill Rhatican, the Synfuels Corporation's vice-president for government affairs.

Reagan's "budget judge" has made no public pronouncement on the synfuel corporation's fate. "We haven't made a firm decision on that," said Office of Budget and Management director David A. Stockman during a recent Senate hearing.

"Well, I hope you won't cut it," said Sen. J. Bennet Johnston (D) of Louisiana, who helped write the bill forming the corporation.

Mr. Stockman indicated that the administration was considering "folding" related programs into the Synfuels Corporation, thus streamlining government operation.

A Senate source indicated Mr. Stockman was probably referring to certain Department of Energy programs that deal with synfuels. Legally, these prorams could be hitched onto the corporation if the corporation agrees to accept them.

"There's been some discussion back and forth, but no decision made," said the source.

When the budget-cutting smoke clears, it seems the Synfuels Corporation will still be going somewhere. Who will be behind the wheel is another matter.

"I think there's more controversy over the officials than over the future of the corporation," says William Reinsch, an aide to Sen. John Heinz III (R) of Pennsylvania.

The board of directors appointed by Mr. Carter will continue operating until a slate of successors is nominated and confirmed -- as will Mr. Sawhill. but with many key government posts still unfilled, naming the new board is not high on the list of the administration's priorities.

"Right now we're in this hiatus where they've indicated they're going to nominate their own slate," said one Senate source.

Not overyone will necessarily be asked to step aside. Sources say several on the current board of directors may be asked to stay.

"They want to make sure they treat [AFLCIO president and board member] Lane Kirkland right," said a Washington source. "And [banker and board member] Catherine Cleary's a Republican."

Tentative world on who will replace John Sawhill has not yet leaked out. The Syn Fuels Newsletter published a report that Victor Schroeder, head of Omni Corporation, would get the nod -- an idea which government sources say was floated by Omni, not the administration.

A piece of legislation affecting the Synfuels Corporation which did not pass through the 96th Congress will have another chance in the 79th. Sponsored by Senator Heinz, the bill would require the corporation to purchase only American equipment -- though exceptions would be made in the case of extreme price differences or lack of availability. As Senate Bill 3233, the legislation didn't become law last year. But Mr. Reinsch indicates the bill will be reintroduced this session.

Other sources indicate the corporation will continue spending at its present appropriation level and that the Reagan administration will push for programs which don't require boosting spending above that level, as proposed by the Carter administration.

"I'm fairly confident they're going to say, 'OK, you've got your four years, but don't come back to the till for your $68 billion,' " says one Washington source.

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