Bush to Call for More Ethanol use Next Week - Sources
Date: 17-Jan-07
Country: US
Author: Chris Baltimore
Energy legislation signed into law last year would require refiners to use at least 7.5 billion gallons (28.4 billion litres) of renewable fuels annually by 2012.
One source briefed by White House officials said Bush's speech on Jan. 23 could call for even more ethanol usage -- over 60 billion gallons by 2030.
"I think it's going to be a big number," the source said on condition of anonymity. "It's in the ballpark of even above 60 billion (gallons) by 2030."
A White House spokesman declined to comment on the details of the speech.
"The President has been a leader on the issue of renewable fuels and has spoken about that numerous times in the past," said White House spokesman Scott Stanzel. "But at this time I'm not going to get into commenting on what might or might not be in the State of the Union address."
The White House could be aiming to beat targets set in legislation proposed by a group of Midwest senators, including prospective presidential candidate and Illinois Democrat Barack Obama, that would set the US renewable fuels mandate at 60 billion gallons a year by 2030, the source said.
A Bush administration official speaking on condition of anonymity declined to say whether ethanol will be addressed in Bush's speech.
But the official said that the 60 billion gallon target is "conceivable and achievable" assuming that making ethanol from cellulosic sources like wood chips and farm cast-offs is cost-competitive with corn-based alternatives by 2012.
A rising focus on "energy security" by both the Bush administration and Congress has added momentum to efforts to employ home-grown fuel sources like ethanol to temper US import needs.
Boosting ethanol would not be a surprise, given recent comments by White House officials.
In a speech earlier this month Al Hubbard, director of the National Economic Council, said Bush's speech will spur "headlines above the fold that will knock your socks off in terms of our commitment to energy independence."
A focus on renewable energy sources would continue a trend that Bush started in last year's congressional address, when he called for the United States to cut its oil imports from the Middle East by 75 percent by 2025 by using energy sources like ethanol and biodiesel.
The speech is a moving target and White House officials are known to make last-minute tweaks.
Last year, White House political advisors added the "addicted to oil" remarks only hours before Bush spoke.
Some US officials including some at the Energy Department worry that US farmers won't be able to grow enough corn to meet higher clean fuel targets.
Thanks to the ethanol boom, the US corn surplus will shrink to a precarious 752 million bushels -- a three-week supply -- before this year's crop is ready for harvest, the US Agriculture Department said last week.
Explosive growth in the fuel ethanol industry has already driven corn prices to the highest level in a decade with no let-up in sight.
The US oil and gas industry adamantly opposes more ethanol mandates.
"Energy policy based on mandates is no recipe for success,' said Charlie Drevna, executive vice president at the National Petrochemical and Refiners Association, arguing that ethanol is less economic and efficient than petroleum-based fuels.
(Additional reporting by Caren Bohan)
