DAVID Stockman may have drawn the ire of scores of Americans when he criticized military pensions and farm subsidies. But what should not be surprising is the notable lack of public consternation about his latest subject of attack: federal support for synthetic fuels production. There's good reason for the relative absence of uproar: Mr. Stockman, as many members of Congress recognize, is on target in his fundamental analysis.
At a time when Washington is considering deep budget cuts in a number of social programs, it seems slightly inconsistent that taxpayers should be underwriting an $8 billion program to further synthetic fuels production.
Granted, continued research into synthetic fuels is necessary. There is justification for funding in that area. But as Mr. Stockman argued in testimony before a congressional committee this week, earmarking up to $8 billion in federal funds to produce synthetic fuels is a ``waste,'' at a time when private industry is unwilling to stake out the vast amounts of dollars that would be necessary to make the development of synthetic fuels commercially viable.
The Synthetic Fuels Corporation was created back in 1980 to provide federal subsidies for nonconventional fuel production.
At that time, the Carter administration looked to the possibility of future oil shut-offs or embargoes, as well as continuing increases in oil prices. Since then, of course, the world has been awash in oil.
The Reagan administration predicts that the synfuels corporation will make awards totaling $4.1 billion in 1985 and $3.6 billion more in '86. Since its inception it has only made two awards, totaling $740 million. The corporation has a fund of $8 billion available for various loan assistance programs to private industry.
What's wrong with such a loan assistance program? Cost. World oil prices have been dropping. Thus, the cost of manufacturing synthetic fuel is excessively high by comparison.
If private corporations saw any real economic gain, they would leap into synfuels as quickly as possible.
Clearly, that is not happening.
The corporation is now working out a report setting forth a comprehensive US strategy for synthetic fuels production. Lawmakers are expected to get the report sometime this year. At that time Congress should raise some hard questions -- as Budget Director David Stockman has just done -- about why an $8 billion federal program is being continued at a time when private industry itself does not seem eager to fund synfuels production.