Statement on Signing Executive Order 12242 - Synthetic Fuels

The rapid development of a viable synthetic fuels industry is an essential part of my overall program to reduce our dependence on imported oil. This program must include both increasing domestic energy supplies and reducing demand through conservation. Great strides have been made in the past year in both of these areas, but much remains to be done. Our program to increase the supply of domestic energy includes:

-Increased reliance on our vast coal deposits;

—Use of renewable resources;

—Greater exploration, development, and production of domestic oil and gas;

—Development of alternate fuels.

The United States Synthetic Fuels Corporation (SFC) was created by the Energy Security Act. It will be the principal Federal instrument to ensure that the synthetic fuels industry becomes a reality. That same legislation recognized that it would take time for the SFC to become operational and therefore provided interim authority under the Defense Production Act for a "fast-start" program for the development of synthetic fuels to meet the needs of national defense.

I am pleased today to sign an Executive order which formally assigns responsibilities to the Departments of Energy and Defense to carry out this interim program until the SFC becomes fully operational. This effort is well underway in both departments. The Department of Defense has identified its short-term synthetic fuel needs and is testing the compatibility of fuel derived from oil shale with existing equipment. The tests to date have been highly successful. The Department of Energy has issued a draft solicitation to industry requesting proposals for. financial assistance for synthetic fuels projects to meet the national defense needs.

The synthetic fuels program is a matter of the highest national priority. The use of this "fast-start" interim authority will permit immediate financial aid to the synthetic fuels industry and provide a smooth transition to the SFC. I will take all appropriate steps to assure that the SFC is able to begin full-scale operation at the earliest practical time.

Under the Energy Security Act, I must declare when the SFC is fully operational for the purposes of termination of the Defense Production Act. In exercising this authority, I shall, of course, be aware that this declaration will terminate the interim authority. I am confident that it will be possible both to utilize the interim authorities and to provide a smooth transition to the SFC. The Departments of Defense and Energy are both committed to this goal, and I intend to declare the Corporation fully operational at a time that will avoid adverse impact on the activities underway at the Department of Energy. Projects awarded under this interim program shall be transferrable to the Corporation or shall remain with the Department of Energy under the interim program and will be transferred to the Corporation for its consideration.