The Trakas Plan: Energy Reform

Bold, Innovative, and Realistic Solutions for America’s Energy Needs while
Cleaning Our Environment

Highlights:
• Increase Domestic Oil Production
• Expand Refinery Capacity
• Develop Fuel Cell Technology
• Invest in Solar and Wind
• Expand Clean Coal Technology
• Reconsider and Utilize Nuclear Power
• Partner with Automobile Manufacturers
• Expand Natural Gas Use
• End the Ethanol Subsidy
• Develop a National Policy on Energy

Increase Domestic Oil Production

• For the foreseeable future, the United States needs oil. New energy alternative programs are
promising; yet remain years away from practical and wide usage. In the meantime, our country
and world need more oil to meet still-growing demand from a growing U.S. as well as the
developing economies in China and India.i It is unwise to continue to rely on foreign sources of oil,
with massive costs associated with it which are hurting our families, and hitting seniors and low
income citizens the hardest. America has more oil in The Gulf of Mexico, under the Rocky
Mountains, and in Alaska than the total available in Saudi Arabia.ii

• We can no longer play domestic political games with our oil supply. Prices are not going to come
down as they have before until the United States takes decisive action. We must immediately
open new areas of the U.S. to oil exploration, which is the only way to provide consumers relief
from soaring fuel prices. Domestic drilling will help our own economy and stop Americans from
overpaying for fuel. This is a near-term answer to bridge the gap to the use of fuel cell technology
and other alternatives, and will have the most immediate positive impact on our citizenry.

Expand Refinery Capacity:

• The U.S. has not built a new oil to gasoline refinery since the Carter Administration in 1976.
America needs to change its brutally oppressive regulatory policy and mike it much easier to build
domestic refineries. Current circumstances make it impossible to refine enough oil to meet our
economy’s needs, dramatically increasing the cost to consumers.iii Updated regulations will assure
environmentally friendly and much-needed refining capacity will have an impact on decreasing
gasoline prices. Indeed, simply drilling for domestic oil and refining more oil to gasoline will
substantially push down oil and gasoline prices. OPEC and other supplier nations will know that
the U.S. is serious about energy independence by increasing drilling and refining capacity, actions
which by themselves will reduce speculators’ betting that oil futures will continue to rise and
increase global supply, both of which will lower costs almost immediately.
Develop Fuel Cell Technology:
• Fuel Cell Technology will revolutionize the nation’s energy policy, and Greater Cleveland can lead
the way. While dramatically reducing pollution, fuel cells will provide Americans clean and
domestically produced, readily available sources of fuel for vehicles, homes and offices - and will
eventually severely limit, if not eliminate, the need to import oil.

• Congress must act immediately to make Fuel Cells commercially available, a reality that is
currently 15 to 20 years away.iv With a major investment in the technology---and the Greater
Cleveland economy---this product can enter the market earlier, beginning the transition to fuel
cells in America’s vehicles. The Trakas Plan would allocate $30 billion annually to fuel cell
technology commercialization, a dramatic increase. In perspective, this $30 billion is equal to the
amount of taxation paid by Exxon/Mobil in 2007.v This major investment in the future would be a
legitimate step in the right direction and signal a major commitment to dramatic change in
America’s energy policy

• This allocation of federal dollars would have a massive effect on bringing fuel cells into the
commercial market. The Trakas Plan would also create a private-public partnership of U.S.
Automotive Companies, energy companies, and the U.S. Departments of Commerce and Energy
to establish a detailed plan for commercialization -- and outlay specific joint goals for
manufacturing vehicles utilizing fuel cell technology, a distribution network for consumers, and the
overall infrastructure for the employment of fuel cells. While this will take time, the U.S.
government must work now to expedite this process and get America on the road to cleaner, less
expensive energy within the decade.

• For the American consumer, this would translate to dramatically lower fuel prices. In addition to the
massive savings, the Trakas Plan would dramatically clean up our environment, provide America
with energy independence, and reinvigorate American manufacturing at a time when it is needed
most.

• Federal policy must also create incentives for a widespread distribution network for fuel cell
vehicles. Existing gasoline stations are the most logical approach and with a National Fuel Cell
Distribution Authority composed of industry and new technology leaders, this good work can be
completed by the time that fuel cell vehicles are commercially available.

Invest in Solar and Wind:

• Wind Power, nuclear power and solar power are currently dramatically more expensive than the
cost of existing fuels. The U.S. should do everything possible to add wind and solar to our
domestic energy portfolio; however, these sources are supplements to the energy grid and cannot
do the job on their own.vi Wind Power in particular has significant potential to supplement our
domestic energy infrastructure. Jim Trakas believes that America’s future energy supply should be
made in America and represents a substantial opportunity for U.S. manufacturers.

• Avoiding mandates on new energies is important. While American policy incentives are healthy,
expensive and unrealistic mandates will only work against these technologies. Our existing
utilities and companies will participate if the proper incentives are offered. Tax advantages and
 reduced regulation are two actions the federal government can take to jump start these industries
in earnest.

Expand Clean Coal Technology:

• It will take decades to transition our energy economy, and the U.S. must work diligently to create
clean ways to burn coal. Many strides have been made at cleaner coal, but much more needs to
be accomplished. Our highest coal priority would be to allow Future Generation Coal Plants to be
phased in over 25 years, allowing carbon dioxide to be pumped back into the ground safely and
cleanly, to preserve our environment and allow America to continue to use its least expensive
energy option. Coal Liquefaction research will also help Ohio to burn its high sulfur coal for even
cheaper sources of energy. This process demands investment and research, and must be
prioritized by our federal government.vii Coal is a finite resource but remains one of the lease
expensive methods of producing energy. Jim Trakas believes the federal government must work in
partnership with the coal industry to abate pollution and utilize this great natural resource.

Reconsider and Utilize Nuclear Power:

• Much of the world is turning to nuclear power as a clean, reliable, and sustainable energy source.
Jim Trakas believes America must also begin to build nuclear power plans again. After the near-
miss at Three Mile Island and the disaster at Chernobyl in the former Soviet Union, nuclear has
not been a popular option. However, many nations are using nuclear power safely, including
France which generates 80 percent of its power from this resource. It is essential for the U.S. to
stop demonizing the power of the nucleus and model our regulatory scheme after that of France to
make it easier to build and maintain nuclear power plants.viii

Partner with Automobile Manufacturer’s:

• New technologies will be a boon to domestic automotive makers. Hybrid and Fuel Cell vehicles
can be produced right now, but at a greatly increased cost to both the manufacturer and
consumer. The Trakas Plan would subsidize the extra cost of each vehicle at each domestic
automobile facility, as well as help pay for new automotive lines and manufacturing needed to
transition to these vehicles. Under this proposal automotive companies could write off 50 percent
of their technology costs for building these new vehicles.

• While Jim Trakas generally opposes government interference with the private sector and
understands that danger of public subsidies, every foreign competitor already does this. It is
incumbent upon our nation to create new automotive industry jobs that will provide innovative
vehicles to domestic and global markets, a wise course of action that will help Greater Cleveland’s
economy and that of the Midwest, which has been hit harder than any other region of the U.S. by
the current economic downturn.ix

Expand Natural Gas Use:

• We must strive to explore and use natural gas as much as possible to create new opportunities to
discover and deliver this clean-burning resource to our consumer marketplace. Costs have risen
over the years because U.S. policy limited exploration of this plentiful natural resource. If the
federal government is serious about lowering the cost to consumers and helping our nation
 become energy independent, then our policies must allow for more exploration, which will lead to
lower prices, more jobs, and the need for domestic materials that can be produced by our
manufacturing sector.x

End The Ethanol Subsidy:

• The great ethanol experiment is over. This is a classic example of short-term thinking. Ethanol
has not helped solve our fuel problem, it has damaged our environment, and it has dramatically
increased the cost of our food supply -- and will for the foreseeable future -- unless we reallocate
resources elsewhere and move on. Ethanol was a good idea, but new technologies and the need
for massive subsidies have proven that this is not the answer to our energy needs and is causing
more harm than good.xi A comprehensive energy policy acknowledges that this experiment has
not met its intended goals, and the federal government must stop pretending it can work. The
sooner this program is ended, the more time, effort, and resources can be devoted to more real
world answers.xii

Develop a National Policy on Energy:

• Jim Trakas believes that the U.S. should have a clearly defined energy policy that emphasizes
self-reliance and a healthy product mix of renewable and non-renewable energies to soften the
price shocks that mass turnover of energy policy dictates. The U.S. must be smart about utilizing
existing resources and making them cleaner and more efficient, while also advancing new and
emerging technologies for our energy needs. All of this must be framed in American’s supplying
the energy needs of Americans. We have seen the disastrous effect of both a lack of innovation as
well as poor policy on both regulation and exploration very much hurting American families,
American industry, and our environment. By taking the steps outlined in The Trakas Plan, we will
have a real world, coherent, and cost maximized Energy Policy that both protects the environment
and allows for investment in the American economy to benefit Americans.
i
Mouawad, Jad, and Julia Werdigier, “Warning on impact of China and India Oil Demand,” The New York Times,
November 7, 2007, accessed at: http://www.nytimes.com/2007/11/07/business/07cnd-energy.html; Due to
rapidly growing industrial economies, the demand for oil imports in China and India is expected to quadruple by
2030, placing a great deal of strain on the global oil market.
ii
News release, “3-4.3 billion barrels of technically recoverable oil assessed in North Dakota and Montana’s
Bakken Formation,” United States Geological Survey, April 10, 2008, accessed at:
http://www.usgs.gov/newsroom/article.asp?ID=1911; “Exploring America’s Energy Future,” (fact sheet) The
American Petroleum Institute, accessed at: http://www.api.org/policy/exploration/access_fact_sheet.cfm; Bartis,
James T., et. al., Oil Shale Development in the United States: Prospects and Policy Issues, Santa Monica: Rand
Corporation (2005).
iii
Schoen, John W., “U.S. refiners stretch to meet demand,” www.msnbc.com, accessed at:
http://www.msnbc.msn.com/id/6019739/.
iv
“Study: Fuel cell cars still 15 years away at best,” The Los Angeles Times, July 18, 2008, accessed at:
http://www.latimes.com/news/science/la-sci-fuel18-2008jul18,0,2916893.story.
v
Perry, Mark J., “Exxon’s 2007 Tax Bill: $30 Billion,” February 5, 2008, accessed at:
http://seekingalpha.com/article/63131-exxon-s-2007-tax-bill-30-billion.
vi
Hargreaves, Steve, “Wind power: A reality check,” www.cnnmoney.com, accessed at:
http://money.cnn.com/2008/07/22/news/economy/pickens_wind/index.htm?postversion=2008072411.
vii
“Coal liquefaction plant will have global significance,” (editorial), The Inter-Mountain (Elkins, WV), August 6,
2008, accessed at: http://theintermountain.com/page/content.detail/id/509476.html?nav=5009.
viii
Country Briefings: French Nuclear Power, World Nuclear Association, accessed at: http://www.world-
nuclear.org/info/inf40.html.
ix
Payne, Maya R., “Fuel cell companies win state grants,” Crain’s Cleveland Business, August 12, 2006,
accessed at: http://crainscleveland.com/apps/pbcs.dll/article?AID=/20060308/FREE/60308003/1005; Two
companies in the greater Cleveland area, HydroGen Corp. of Cleveland and Pemery Corp. of Painesville, have
already received substantial grants from the Third Frontier Fuel Cell Program, establishing a firm foundation for
future expansion of the industry within the region.
x
Kingsdalec, James, “U.S. natural gas seen to be superabundant,” August 11, 2008, www.istockanalyst.com,
accessed at: http://www.istockanalyst.com/article/viewarticle+articleid_
2497453.html; New developments in extraction technology have greatly increased access to domestic natural
gas sources in a variety of geologic formations throughout the U.S. Currently, it is estimated that domestic fields
can support 2007 demand levels for 118 years, making it an extremely valuable commodity as we endeavor for
energy independence.
xi
“Global food riots turn deadly,” The Washington Times, April 10, 2008, accessed at:
http://www.washingtontimes.com/news/2008/apr/10/global-food-riots-turn-deadly/; A sharp increase in food
prices, in no small part due to the effect of subsidizing U.S. crops for ethanol production, have sparked violent
food riots around the world throughout 2008. Great political pressures have been placed on some of the world’s
poorest nations, such as Haiti and Burkina Faso, as a result of stunningly misguided U.S. domestic energy
policy.
xii
Brown, Lester R., “Why ethanol production will drive world food prices even higher in 2008,” January 24, 2008,
www.earth-policy.com, accessed at: http://www.earth-policy.org/Updates/2008/Update69.htm; Ethanol production
has driven world food commodity prices to historic highs, yet subsidized U.S. ethanol accounts for only 3% of
national fuel consumption. For all of the benefits that advocates of ethanol claim, even if the entire U.S. grain
harvest were utilized for ethanol production, ethanol would still only account for 18% of U.S. automotive fuel
needs. Ethanol will certainly not lead to U.S. energy independence.