(FORTUNE Magazine) - When President Bush unveils his energy budget later this month, he'll have a chance to put some money where his mouth is. Even as Bush extolled the virtues of ethanol in his State of the Union, the National Renewable Energy Laboratory--home to key research that might make ethanol much cheaper--was preparing to cut jobs and tear up contracts. That's partly because Congress earmarked 15% of the lab's budget for unrelated pet projects. But the President's original budget also fell short of full funding. "We're going to have to increase," says Brent Erickson of the Biotechnology Industry Organization.