Bush to call for more ethanol use next week: sources

By Chris Baltimore
Tuesday, January 16, 2007; 5:44 PM

WASHINGTON (Reuters) - U.S. President George W. Bush's annual speech to Congress next week is likely to call for a massive increase in how much fuel ethanol that U.S. refiners must mix with gasoline in coming years, sources familiar with White House plans said on Tuesday.

Energy legislation signed into law last year would require refiners to use at least 7.5 billion gallons of renewable fuels annually by 2012.

One source briefed by White House officials said Bush's speech on January 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 U.S. 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 U.S. 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."

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