Proposed Sale of the Great Plains Coal Gasification Project

GAO discussed the Department of Energy's (DOE) proposed sale of the Great Plains Coal Gasification Project, focusing on the: (1) financial return should the federal government maintain ownership of the project; (2) estimated price that would equal the project's retention value; and (3) effect on the federal budget. GAO found that: (1) potential net revenues from continued federal ownership could total about $1.5 billion; (2) for the government to be as well off financially from selling the project as it would be from retaining ownership, it would have to sell the project for an estimated $1 billion; (3) sale of the project would reduce the federal deficit in the year of the sale; and (4) a low sale price would tend to increase the federal deficit over the long term because future cash and tax revenues would be less than the revenues to be realized from continued ownership.