For most of this century, Beulah, N. Dak., was a sleepy prairie town with two grocery stores and a pair of gas stations. Founded in 1913 and named for the niece of the region's largest landowner, Beulah was populated mostly by farmers and coal miners. Then, in 1978, the Department of Energy announced that it would finance a $2.1 billion commercial synthetic-fuels plant, the first in the U.S., to be built on the outskirts of Beulah. Operated by a five-member consortium of energy companies, including Tenneco and Transco Energy, the 600-acre project would turn coal into natural gas and be the centerpiece of the Government's efforts to produce substitutes for expensive imported oil. When the Great Plains Gasification Project opened in July 1984, Beulah was booming. Its population had jumped from 1,300 in 1977 to 5,600, as $100,000 houses and even a golf course appeared.
Today Beulah is a town in crisis. Great Plains has lost much of its Government backing. Moreover, its synthetic fuel is uneconomical because the price of imported oil is falling. The plant may be shuttered within a month, dealing a devastating blow to the community, the state of North Dakota and the future of synthetic fuels. Great Plains has an annual payroll of $36 million, employing 973 people and generating more than 5,000 additional jobs in the area. Says Cynthia Lynk, executive director of Beulah's Chamber of Commerce: "If the plant closes, we'll have businesses shutting down, school enrollments off and houses left empty all over." Concludes Beulah City Planner John Rogers: "It would be a disaster."
The troubles of the synfuels industry deepened last month when the U.S. House of Representatives voted 312 to 111 to eliminate all funding for the Synthetic Fuels Corporation, which has financed several large-scale projects. The bill provides only $500 million for a Department of Energy program of synfuels research. The Senate is expected to pass a similar measure. As Congress has grown increasingly skeptical of synfuels, so too has the DOE. Last month it decided to withdraw $1.4 billion in aid to Great Plains. As a result, the plant's private consortium of owners announced that it was pulling out of the project.
Great Plains is now under the control of the DOE. Last week the department sent a team of investigators to inspect Great Plains and confer with plant managers. Some employees hoped the Government would find a way to keep the project running. Said Michael Mujadin, the operations director: "Once they see things for themselves, I'm confident the DOE will let us continue." But that may prove impossible if Congress decides to cut off synfuels funding.
Rarely, if ever, has a Government program grown so large only to face extinction in so short a time. Created in 1980, the Synthetic Fuels Corporation had a monstrous initial budget of $15 billion. At the time, some experts expected the price of imported oil to reach $60 per bbl. by the end of the decade. The only solution seemed to be a drive to convert coal reserves, like those underlying the Great Plains site, to synthetic gas or oil. The SFC's first grandiose goal called for the U.S. to produce the equivalent of 2 million bbl. of crude oil a day by 1992, replacing about 50% of imports.