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Your letter dated October 2, 1980, requested two reports.
(See enc. II.) The first report on the Department of Energy's
(DOE's) Alternative Fuels Program was issued on December 8, 1980,1
(EMD-81-36). As agreed with your office, this report examines
changes in DOE's synthetic fuels programs for coal liquefaction,
coal gasification, and oil shale.
During the period March 8, 1981, through July 20, 1981, we
reviewed the administration's proposed synthetic fuels program
by examining authorizing legislation, the previous and current
administration's respective budgets, budget testimony, and
various relevant program documents. Budget estimates in the
report are current, according to DOE officials, as of July 20,
1981. We also obtained information on the proposals by inter-
viewing DOE program officials in the Office of Energy Research
and in the Offices of the Assistant Secretaries for Fossil
Energy and Environmental Protection, Safety, and Emergency
Preparedness. Pertinent officials at the Office of Management
and Budget, the U.S. Synthetic Fuels Corporation (SFC), and
Environmental Protection Agency (EPA) were also interviewed to
obtain information on the proposals from their perspectives.
We did not evaluate the individual merits of the administration's
proposals but rather focused on aspects of the synthetic fuels
program which may require congressional oversight if the
proposals are adopted.
The DOE, under a congressionally sanctioned interim synthe-
tic fuels program, has recently reached agreement to support
three industry proposals aimed at commercial production of syn-
thetic fuels. The Reagan administration proposes to eliminate
DOE's synthetic fuels commercialization activities and transfer
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