Bush: Use ethanol to get off oil

President Bush renews his call for ethanol as a means of attaining energy independence at the Washington International Renewable Energy Conference.

WASHINGTON (CNNMoney.com) -- President Bush said the United States should "get off oil" Wednesday as crude prices hit record highs and renewed his support for ethanol use despite concerns the corn-based fuel is driving up food prices and isn't more environmentally friendly than gasoline.

"We gotta get off oil, American has got to change its habits," Bush told a crowd at the Washington International Renewable Energy Conference, a meeting of global energy officials and an adjoining trade show that's the largest all-renewables show ever held in the United States. "It should be obvious to all, demand has outstripped supply, which makes prices go up."

As the conference got into its second day, crude oil on the New York mercantile exchange jumped nearly $4 on falling oil inventories, trading over $104 a barrel and setting a new all-time record.

Part of Bush's plan to wean the country off oil includes big investments in ethanol.

The energy bill passed by Congress and signed by Bush in December calls for refiners to replace 36 billion gallons of gasoline with ethanol by 2020, up from about 7 billion gallons today. About half of that will come from ethanol made with corn.

"That's good if you're a corn farmer, and it's good if you're concerned with national security," Bush said.

Bush acknowledged some of the problems with ethanol, particularly its role in pushing up the price of corn. The price of corn has doubled since 2006 which has pushed up the price of chicken, beef and poultry - livestock fed with corn.

Also, crops like wheat and soybeans are becoming more expensive as farmers devote more acreage to grow corn as they rush to satisfy the demand for ethanol.

"I'm beginning to hear complaints from cattleman about the price of corn," he said. "We're going to do something about it."

Bush said his administration has spent over $1 billion to make cellulosic ethanol - which can be made from non-food plants like grasses or wood chips - cost competitive. He also highlighted the use of biodiesel, which is diesel fuel made from agricultural and food waste.

"I'm confident the United States can meet those goals, for the sake of national security and the environment," he said.

Ethanol's impact on the environment is also up for debate. The U.S. government has previously said ethanol is about 20 to 30% cleaner than gasoline, even factoring in that it is less efficient than gasoline. But recent studies have called that into question, suggesting ethanol is no better than conventional fuel.

In the renewable field overall, Bush said his administration has spent $12 billion on research and development since he's been in office, all part of an effort to wean the nation off big oil and increase investment in solar and wind power.

Bush said wind capacity has increased 300% since he's been in office, and solar has grown as well.

But critics say Bush can hardly take credit for promoting renewables when he has held up incentives like production tax credits and refuses to cap carbon dioxide emissions.

"It's like Jamie Lynne Spears giving a talk on abstinence," said Daniel Weiss, director of climate strategy at the Center for American Progress, a liberal think tank referring to a teenaged TV star who recently disclosed she was pregnant.

Bush reiterated his call for a global cap on carbon dioxide - the main gas behind global warming - but said the United States should not act until nations like China and India do as well.

"These agreements must include solid agreements by every major economy," said Bush. "No country should get a free ride."

Bush also called for greater investments in nuclear power to combat global warming while meeting the world's growing energy needs, a call that was met by applause from the audience.

And, in his trademark humorist style, applauded the participants at the conference.

"I appreciate your commitment to renewable energy," he said. "It probably didn't help today when I rode over in a 20 car motorcade."