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A Forward-Reaching Proposal

For the Honorable Senator John McCain

B ronco Energy Fund offers a strategic proposal for ensuring America’s energy vitality for the next 258
years, bolstering our national defense, saving Social Security, and preserving our environment.

IMPETUS—The underlying motivation for this proposal is straightforward: The country that controls its
own energy, controls its own destiny. The bedrock foundation for this proposal is America’s vast coal
reserves, one of our most prized and virtually inexhaustible natural assets. This diamond in the rough—
some 275 billion tons of it—is America’s safety vault of stored energy, enough to supply our economy
with the bulk of its vital energy and electricity needs for an estimated time span of 258 years at the current
rate of conversion.

LEVERAGE—The key to leveraging the value of America’s coal without polluting the environment is
IGCC—Integrated Gasification Combined Cycle. This advanced energy technology—a product of
cooperative research, development, demonstration, and early deployment (ERD3) on the part of a diverse
blend of stakeholders from government, industry, and the scientific community—is capable of converting
coal into energy with virtually no environmental pollution and with thermal efficiencies as high as 50% or
more, compared with 35% for conventional processes. In addition, IGCC produces a multiplicity of
valuable co-generated products, including fuels and chemicals, that contribute to its commercial vitality.

STRATEGIC PROMISE FOR THE FUTURE—The dynamic combination of America’s coal reserves
plus America’s ingenious IGCC technology (Bronco Energy Fund being one of the vanguard IGCC
practitioners) is a widely-confirmed solution to our most urgent national challenges, including:

ENERGY SUSTAINABILITY—The U.S. Department of Energy projects a 45% increase in America’s


1 demand for electricity from all sources over the next two decades. Where will the added capacity come
from? The facts:
• Coal is the leading source of electricity: Fully 86% of the nation’s coal production goes to generate
electricity—filling some 52% of our current needs. By contrast, nuclear technology and natural gas contribute
around one-fifth each, with the balance coming from hydro and other renewable sources.
• Coal is our most stable and abundant asset: America has fully 25% of the world’s proven coal reserves (more
than any other country), but only 2% of the world’s oil reserves and only 3% of the world’s natural gas reserves.
Whereas our coal reserves could carry us through some two-and-a-half centuries of energy production., our oil
would last only 11.3 years and our natural gas only 9.5 years, according to the National Commission on Energy
Policy (December, 2004).
• Coal is unleashed through IGCC: Currently the U.S. has around 300 GW of coal-fired power generation
capacity. Forward-reaching studies estimate that the U.S. will need to add nearly 90 GW of new coal-fired
capacity by 2025. As much as 62% of this new capacity will have to come from advanced clean coal
technology—IGCC. The leveraging power of IGCC makes coal the most precious commodity in America’s
energy arena: inexpensive, clean, reliable, and domestic.

© Copyright 2005 Bronco Energy Fund Inc.


NATIONAL DEFENSE—Any increase in foreign energy dependence brings with it a concomitant
2 decrease in national security. It is therefore essential to increase America’s domestic energy supplies and
augment and protect America’s energy delivery system. The facts:
• America is energy dependent: America currently produces only 72 percent of its nearly 100 quadrillion Btus of
consumed energy each year.
• America is oil dependent: We consume fully 25% of the world’s petroleum. Well over half of the petroleum we
use is imported—54% of the 19.6 million barrels we used monthly in 2002, projected to reach as high as 70% by
2025 if current trends persist.
• America must rely more on coal: For national defense and energy independence, there is an urgent need to turn
more fully to America’s most abundant resource: coal—among the most potent of our national defense assets.

SOCIAL SECURITY—Bronco Energy Fund asserts that coal is a leading weapon in the arsenal of
3 prospective and innovative remedies for Social Security. There is a direct relationship between energy
security and societal security. The long-term well-being of our citizenship is, in fact, intimately
intertwined with the long-term success of national energy policies. The facts:
• Energy and Social Security both need a fix: In his State of the Union Speech on February 2, 2005, President
Bush stated: “Four years of debate is enough. I urge Congress to pass legislation that makes America more
secure and less dependent on foreign energy.” It is perhaps not gratuitous that the President almost immediately
thereafter addressed the need for urgent action to put Social Security on a sound financial footing. He warned
that the Social Security system could be “exhausted and bankrupt” as early as 2042, absent corrective measures.
• Coal is the risk-mitigating factor for both energy and Social Security: Bronco Energy Fund raises the
question: What if the current administration’s proposal for private investment accounts under Social Security
were aligned directly with energy-related investments (specifically those involving IGCC) where the government
would retain control through utility-rate mandates? Bronco Energy Fund believes it would serve the public
interest to foster dialogue around such an innovative proposal as a means to reduce the risk associated with
corrective measures for Social Security, while at the same time enhancing future growth and economic
development—all on the foundation of America’s most abundant and cherished national resource, coal.
ENVIRONMENTAL INTEGRITY—IGCC takes the stigma out of current coal-fired technology. It is
4 the key to providing low-cost energy for continued U.S. economic growth and furthering national goals
for protecting the environment and mitigating global climate-change concerns. The facts:
• Emissions-free conversion: The IGCC process efficiently and economically removes virtually all pollutants
such as sulfur, mercury, nitrogen oxides, and particulates—and more readily and cheaply captures CO2 for re-
deployment as a by-product (as in Enhanced Oil Recovery) or readied for sequestration.

ACTION STEP: ACCELERATED DEPLOYMENT— Currently the projections in the U.S. are to have a
high-efficiency, virtually zero-emissions IGCC power plant in service as early as 2015 or, by some estimates,
2020—one that is fuel flexible, sequestration-ready, and capable of product co-generation. Bronco Energy Fund
expressly declares that this time frame is too long. A more desirable target range would be five to ten years
maximum. What can be done to shorten the time span for successful deployment?
• Strategic Think Tank: Bronco Energy Fund recommends the immediate formation of a strategic think tank—
involving concerned stakeholders from all interested constituencies: government, industry, and scientific
agencies—to facilitate the emergence of synergistic strategies for accelerating the refinement and deployment of
IGCC technologies as a key to leveraging America’s vast coal reserves in support of future energy production.
• Underwriting: Bronco Energy Fund stands ready to help underwrite the operation of such a think tank,
particularly in response to support and encouragement from one or more leaders from the United States Senate
who are committed to finding effective solutions to America’s energy needs.
Bronco Energy Fund, Inc., led by an experienced team of industry professionals, is focused on key areas of investment in the energy
arena designed to provide the strongest growth for shareholders in the future and contribute to strategic solutions for America’s
energy challenges. Bronco Energy Fund has been acquiring major coal plants in the U.S. with support from an international
financial institution experienced in the energy field, specifically involving IGCC. Bronco Energy Fund has the mission of
leveraging IGCC technology to unleash the potential of coal as a means to energize our national agendas and secure economical and
environmentally-friendly solutions to our national energy needs.

© Copyright 2005 Bronco Energy Fund Inc.