In front of an ethanol association backdrop April 25, President George W. Bush reaffirmed his strong commitment to ethanol, telling attendees of a small renewable fuels summit in Washington, D.C., that ethanol production is "booming" and a significant part of America's immediate and long-term initiative to reduce its dependency on foreign oil. Buried in the president's 30-minute speech, however, was an announcement that the U.S. EPA will start granting temporary waivers to metropolitan regions of the United States required to use clean-burning reformulated gasoline, a move that could cause ethanol demand to slacken.

The president's participation in Renewable Fuels Summit 2006: Growing America's Energy Security, a one-day event sponsored by the Renewable Fuels Association (RFA), was announced to the public April 24. Bush's ethanol-focused keynote address was covered live, in its entirety, by almost every major news network, most of which followed his address with pundit commentary.

Immediately after being welcomed to the summit by RFA President Bob Dinneen, Bush embraced the longtime ethanol industry leader and quipped, "It's always good to be introduced by someone who is referred to as ‘the promoter and chief.'"

The president lauded the RFA for being a tireless advocate of ethanol production and use for 25 years. "Your advocacy is paying off," Bush told ethanol industry representatives in the room. "Renewable energy is one of the great stories of recent years, and it's going to be a bigger story in the years to come. … I like the idea of talking to people who are growing America's energy security. I like the idea of policy that combines agriculture with modern science and the energy needs of the American people. I am here to talk to you about the contributions you are making, and I am here to talk to you about the need for this country to get off our dependency on foreign oil."

Prefacing his remarks with updates on the nation's war on terror and what Bush described as a robust and healthy national economy, the president said energy prices are effectively one of the U.S. economy's few sore spots. "The prices people are paying [for gas] reflect our addiction to oil," he said. "Addiction to oil is a matter of national security concerns."

The president said the nation currently gets approximately 60 percent of its oil from foreign countries, many of which are "unstable" and have "hostile" agendas. "These countries know we need oil, and that reduces our influence. … It reduces our ability to keep the peace in some areas. So energy supply is a matter of national security. It's also a matter of economic security. What people are seeing at their gasoline pumps reflects the national economy in which we live. When the demand for oil goes up in China or India—two fast-growing economies—it reflects the price of oil worldwide."

Bush described gas price spikes as a sort of "hidden tax" on working people, farmers and small businesses. He said experts have informed him that energy prices will remain high throughout the summer, which would be a continued strain on American consumers. The president said his administration's three-prong solution to this problem includes energy conservation, increased domestic energy production and the development of alternative sources of energy like ethanol. He said the Energy Policy Act of 2005, a now-active bill that calls for the United States to use at least 7.5 billion gallons of ethanol in its gasoline supply by 2012, was a good start. "But there's a lot more to be done," he said, before announcing that he has directed the U.S. Federal Trade Commission (FTC) to investigate whether the price of gasoline has been unfairly manipulated in recent weeks. The president said he is also directing the U.S. Department of Justice to work with the FTC and the U.S. DOE to conduct inquiries into whether or not illegal manipulation of gas prices, something he called "cheating," has taken place. The president said it's all being done to make sure American consumers are being treated fairly at the gas pump. "Americans understand, by and large, that the price of crude oil is going up and that [gas prices] are going up, but what they don't want—and will not accept—is manipulation of the market. And neither will I."

Bush said the notoriously massive profits of oil companies has given them large enough cash flows to not only expand U.S. refining capacity and research alternative energy sources, but also develop new technologies and expand energy production in environmentally friendly ways. "That's what the American people expect," he said. "We expect there to be strong reinvestment to help us with our national security needs and our economic security needs." For oil companies, Bush said that means he will ask Congress to stop granting tax breaks "like big write-offs" for geological and geophysical expenditures, or use of taxpayer money to search and drill for crude. Bush said his newest plan will cut $2 billion in oil industry tax breaks out of the federal budget over a 10-year period.

After plugging hybrid gasoline-electric and clean diesel vehicles, Bush announced his directive to immediately stop making strategic petroleum reserve deposits. "I have directed the DOE to defer filling the reserve until the end of summer," he said. "Our strategic reserve is sufficiently large enough to guard against any major supply disruption over the next few months, so by deferring deposits until fall, we'll leave a little more oil on the market. Every little bit of it helps."

Bush also said the nation must reduce restrictions on its ability to get gasoline to the pump. Although the energy bill effectively ended the nation's oxygenated gasoline program, federal air quality laws in some areas of the country still require the use of cleaner-burning reformulated gasoline (RFG). Historically, RFG has been formulated with oxygenates that have included either MTBE or ethanol. As the nation now phases away from MTBE, the demand for ethanol has spiked, and some have correlated those spikes with an ethanol market squeeze, even as industry experts say routine seasonal maintenance and $70-per-barrel crude is largely to blame.

"I appreciate the role ethanol producers are playing to meet this challenge. You're playing a vital role," Bush said, softening them up for what he would say next. "State and local officials in some parts of our country worry about supply disruption for the short term. They worry about the sudden change from MTBE to ethanol and that the ethanol producers won't be able to meet the demand—and that it's causing the price of gasoline to go up some amount in their jurisdictions."

With that explanation, Bush announced that he has asked EPA Administrator Stephen Johnson to grant temporary RFG waivers to areas that need them. Bush said he told Johnson to use "all his available authority" to grant waivers when and where they will relieve critical fuel supply shortages. "I do that for the sake of our consumers," Bush said. "If Johnson finds that he needs more authority to relive the problem, we're going to work with Congress to obtain the authority he needs."

Bush also said he is working with the EPA and state governors to find a way to simplify America's growingly diverse regional fuel blend requirements, something known as "boutique fuels." He said America has a notoriously uncoordinated and overly complex set of fuel rules that is, in part, causing gas prices to rise.

Bush said the nation's refining capacity is insufficient—it's been 30 years since the United States built a new oil refinery—and bureaucratic red tape and paperwork have made the permitting process for new construction or expansion nearly impossible for refiners. He also reiterated his support of a plan to open up Alaska's Arctic National Wildlife Refuge for more domestic crude.

Bush said the ethanol industry has a unique opportunity to capitalize on the nation's clean energy needs. "Years of investment in fuels like ethanol have put us on the threshold of major breakthroughs," he said. "Those breakthroughs are becoming a reality for our consumers. I set a goal to reduce our use of oil from around the world. The best and fastest way to do that is to expand the use of ethanol."

Bush reiterated the aggressive goals of his Advanced Energy Initiative and its focus on three promising ways to reduce gasoline consumption: increasing the production and use of ethanol, getting more hybrid vehicles on the road, and developing hydrogen fuel cell technology. "All three go hand in hand," he said. "All three are part of an important strategy to help us diversify away from hydrocarbons."

Of the three solutions, Bush said ethanol has the largest potential for immediate growth, and not just through the use of E10, but by increasing the production and refueling infrastructure for E85 as well. "What most Americans don't realize is that with a little bit of expenditure, [automakers] can convert a standard automobile to what's called a flex-fuel automobile," he said. "That flex-fuel vehicle can use fuel that is 85 percent ethanol. Amazing, isn't it?"

The agricultural and rural economic benefits of ethanol were not overlooked by the president during his speech. He called ethanol a "versatile fuel" that is good for agriculture, rural communities and small businesses. "I am one of these people who believe that when America's agricultural sector is strong, America is strong," he said, adding that ethanol is one of the few transportation fuels produced in America that is good for the economy and the environment. "[With ethanol], you don't have to choose between a good economy and a good environment. … Ethanol is good for drivers. Ethanol is homegrown. Ethanol will replace gasoline consumption. It's good for the whole country."

With 97 ethanol plants now on line in the Unites States, and three dozen more under construction, the president recognized that the industry is truly taking flight—and not just in the Midwest. "What's truly interesting is that there are new plants springing up in unexpected areas like the Central Valley of California, or Arizona … even the [sugarcane] fields of Hawaii," he said, mentioning that sugarcane can be an extremely efficient production feedstock.

The president, who appeared to be very well informed about ethanol, said grain- and sugar-based production has its limits, and the industry's true future lies in the commercialization of cellulosic ethanol. "I am committed to finding other ways—other sources—for ethanol," he said. "We are working on research to figure out ways to produce cellulosic ethanol that can be made from wood chips or stalks or switch grass. These materials are sometimes waste products and simply thrown away. Doesn't that makes sense—I think it does—to use taxpayer money to determine how we can use these raw materials to make something out of nothing?"

Bush said he is pushing for full funding of the $150 million he has included in next year's budget for renewable fuels and energy sources including ethanol.

"I think it makes sense," he said. "Surely, the prices at the gas pump should tell the American tax payer that it makes sense for this government to spend money on research and development to find alternative sources of energy."

Overall, the president described his energy strategy as one that is diverse and gradually moves the nation away from its utter reliance on oil—transitional sources of energy that will give the nation greater energy independence while the promise of a hydrogen fuel-cell-driven nation is developed.

"What I'm describing to you today is a strategy that recognizes the realities of the world in which we live," Bush said. "… You're on the forefront of incredible changes that are taking place in this country. … There is no doubt in my mind that one of these days, instead of people driving up to a gas station, they're going to be going up to a ‘fueling' station. They'll be able to have choices. If you have a hydrogen-powered car, you'll be able to have that choice. If you want 85 percent [ethanol]—maybe even 100 percent ethanol—that might be an option available, too. We owe it to the American people."

The Renewable Fuels Summit 2006: Growing America's Energy Security also included a panel discussion about legislative priorities concerning renewable fuels. The panel reportedly included members of Congress including Sen. Ken Salazar, D-Colo., and Reps. Jack Kingston, R-Ga., Gil Gutknecht, R-Minn., and Jerry Weller, R-Ill. The summit also reportedly featured a major announcement from DaimlerChrysler executive Thomas LaSorda concerning the company's U.S. fleet. In addition, former CIA Director R. James Woolsey and American Petroleum Institute President Red Cavaney were featured luncheon speakers.