Synthetic Fuels

Pursuant to a congressional request, GAO provided information on the Great Plains Coal Gasification Project, focusing on: (1) relevant litigation and appeals; (2) plant operating levels; (3) operating agreements; (4) project audits; and (5) plans to sell the project.

GAO found that: (1) the Department of Energy (DOE) continued to operate the project following the default of the project's partnership; (2) DOE renewed its agreement with the plant operator for a 6-month period beginning October 1, 1987; (3) gas production averaged about 104.8 percent of the plant's design capacity rating; and (4) plant employees have expressed concern over the possible sale of the plant. GAO also found that: (1) North Dakota did not issue an operating permit because sulfur emissions were above allowable limits; (2) the state did issue a permit for the project's solid waste disposal facilities; and (3) DOE and the plant operators are studying ways to reduce sulfur emissions and produce and sell plant by-products. In addition, GAO found that: (1) plant operating costs remained relatively stable while gas prices generally increased; (2) the project had a cash balance of $109.5 million as of September 1, 1987; (3) its financial statements presented fairly the project's financial position, subject to future determination of the project's true market value and the outcome of ongoing litigation and disputes; and (4) DOE is proceeding with plans to sell the plant.