The Department of Energy, taking a short-term loss of more than $1 billion, announced Friday that it will sell a synthetic fuel plant that it helped build to reduce the nation's dependence on foreign oil in the wake of the energy crisis of the late 1970s.
Basin Electric Power Cooperative, based in Bismarck, N.D., agreed to buy the Great Plains Coal Gasification Plant in nearby Beulah for an estimated $600 million spread out over the next 21 years, including about $115 million in immediate payments - far short of the $1.5 billion the government spent to build it in the early 1980s.But Secretary of Energy John S. Herrington said the government could still recover as much as $1.8 billion as a result of a revenue-sharing program with Basin Electric and other provisions of the sale.
Department officials said they are pleased with the sale and characterized it as a "substantial recoupment" of taxpayer money, though they added that, because of inflation and changing gas prices, it is difficult to estimate how much the government could gain or lose.
The department will forward the sale terms to Congress for a 30-day review period before the agreement can take effect.
The facility, which converts coal into natural gas through a costly chemical process, was conceived in the late 1970s when the nation was mired in an energy crisis and alarmed about potential cutoffs of foreign oil. Since that time, however, a sharp decline in energy prices has made the plant - the only one of its kind in the United States - increasingly uneconomic.