WASHINGTON - Critics lashed out at President Bush over his proposals to break America's oil addiction, contending the plan will undercut the basis of America's strong economy, misdirect the country's energy reform priorities, or further poison an already fragile environment.
In his State of the Union address Tuesday, Mr. Bush, a former Texas oilman, raised eyebrows when he proclaimed that America is "addicted to oil" and unveiled his "Advanced Energy Initiative" to replace more than 75% of the nation's Middle East oil imports by 2025. The Advanced Energy Initiative promises a 22% increase in "clean-energy research" at the Department of Energy. The president has spent almost $10 billion on developing alternative energy sources since 2001, and outlined Tuesday almost $1 billion in spending on solar, wind, clean coal, and ethanol energy in the 2007 budget.
A former CIA director who has long advocated energy independence as a means of protecting national security, James Woolsey, said yesterday that he gave the president's address "two cheers" for taking on energy issues, but said that it failed to address some main obstacles to oil independence.
Mr. Woolsey praised the president's advocacy of "cellulosic ethanol," or ethanol derived from non-oil plant products, such as leaves and stalks. The fuel's popularity among environmentalists, observers said yesterday, was likely the reason for its inclusion in the State of the Union.
This included Mr. Bush's mention of "switch grass," a prairie grass that grows throughout much of America. Mr. Woolsey said that switch grass grows on about two-thirds of the 30 million acres of soil bank set aside in America to prevent dust-bowl conditions. It is preferred over corn as a source of ethanol, because corn must be cultivated using petroleum-driven machinery and using petroleum-derived fertilizer. Since switch grass grows naturally, "all you have to do is mow it," Mr. Woolsey said. Prairie grass and stalks are also preferred because their growth for energy has minimal impact on global carbon dioxide levels, also of concern to environmentalists.
Mr. Woolsey cautioned, however, that much R&D money is already being dedicated to ethanol, both corn-based and cellulosic.
A principal at an alternative-energy venture capital firm in San Francisco, Nth Power, Rodrigo Prudencio, said that large agricultural firms such as Archer-Daniels-Midland and Cargill were leading developers of ethanol technology. ADM's stock yesterday dropped about 4% or $1.31, General Motors was up 1.8%, and ExxonMobil was down 1.3%.
Cellulosic ethanol firms, he said, tended to be in the earlier stages, and few are publicly traded. Two leading companies, he said, were Edenspace and a Hawaii-based company that specializes in turning sugarcane byproducts into fuels, ClearFuels.
Mr. Woolsey said the president's address should have focused more on getting auto companies to actually adopt the ethanol technologies already being developed. "What I think would have been a good thing to do," the former CIA director said, "is to get Detroit to agree to make all their cars carbon composite." The material is more durable in crashes than steel and is lighter, giving cars greater fuel efficiency.
The change, Mr. Woolsey said, would cost about $100 more a car. In exchange, he said, the government could work out an agreement with American car manufacturers to help with their pension and health care costs - disadvantages crippling them against Japanese car makers by about $2,500 a vehicle - he said, by offering tax credits.
Still, he said, the proposal was a "good, concrete small step on security" and energy efficiency would force the Saudis to diversify their economy because they couldn't rely on $160 billion annually from oil imports. Requests for comment from the Saudi embassy and Saudi Aramco yesterday went unreturned.
Concern emerged from the energy industry yesterday. A spokesman for ExxonMobil, which recently posted record profits amid high oil prices, said, of Mr. Bush's proposal, "We must be realistic."
"Energy is the driver of the economy in the U.S. and globally," the spokesman, David Gardner, said. "It is the underlying reason we enjoy the standard of living we do here in the developed world."
A spokesman for General Motors on energy and public policy issues, Christopher Preuss, yesterday told The New York Sun that the company agreed about the need to develop ethanol-capable vehicles, of which he said GM already had 1.5 million on the roads. Mr. Preuss cited Brazil as an example, where "almost nine out of 10 cars we sell are ethanol-capable." A blend of ethanol and gasoline, E85, "is their dominant fuel," he said.
One week ago, GM launched an "Ethanol Image Campaign" to tout its investment in E85 technology. Yesterday, fast on Mr. Bush's address, the company announced it would be introducing a new hybrid SUV. Mr. Preuss said the company had "no specific knowledge" of the ethanol push or other proposals in the State of the Union in advance of the address.
According to free market energy analysts and environmentalists, Mr. Bush's proposals amounted to "more of the same" - talk about environmental reform that wastes taxpayer money and fails to produce results.
"I'm not sure what this proposal is other than spending some government money on R&D, which the government is doing anyway," an energy analyst at the Manhattan Institute, Max Schulz, told the Sun yesterday. "And it hasn't made any practical difference in our energy mix."
Mr. Schulz, a former adviser to the administration's Department of Energy, said the president's energy proposals bought into misunderstandings about the nature of the American economy, which the analyst said is already being driven to an electricity-based model by consumers and the Internet economy, which relies less and less on petroleum.
The same, the analyst said, was true of automobiles. "Our cars are becoming much more electric compared to a quarter century ago, and many operations in your car are run on electricity, not gasoline," Mr. Schulz said. "That trend is going to continue, and it's the market that's doing that, not the government."
The director of energy policy at the Competitive Enterprise Institute, Myron Ebell, said that the tens of billions in government-subsidized fuel research "basically has just been wasted," yielding no new technology of economic or environmental benefit.
Moreover, the analyst said, Mr. Bush's "rhetoric" about oil addiction would embolden environmentalists and anti-petroleum advocates to steer America away from measures that would effect independence from Middle Eastern oil, such as opening the Arctic National Wildlife Refuge and offshore areas to drilling, and importing more oil from friendly countries such as Canada. Mr. Bush's harsh language, he said, was already prompting increased calls for punitive gas taxes that would harm the American economy and reduce Americans' mobility and quality of life.
Mr. Ebell's criticism came as one of America's largest labor unions, the Service Employees International Union, awarded its $100,000 "Best Idea Since Sliced Bread" prize yesterday to a "'resource tax' on pollution, development, and fossil fuels to pay for development of renewable energy and environmental restoration."
One of the president's proposals that pleased the free market analysts, investing more in nuclear energy, irked environmentalists generally critical of the Advanced Energy Initiative.
An energy policy specialist at Greenpeace, John Coequyt, said the president's mention of nuclear energy was promoting "an incredibly dirty business." The Department of Energy is expected to unveil a nuclear proposal as early as next week that will advocate uranium reprocessing, which Mr. Coequyt said "is the process by which people make bombs. And then if you say ... this technology is acceptable, then how do you say to Iran that they can't reprocess?"
"We couldn't be more vehemently opposed to the thing," the activist said, adding that financial allocations under the Advanced Energy Initiative were "a joke." The Sierra Club, too, dismissed the initiative as "a wish list for corporate lobbyists."
