[Public Papers of the Presidents of the United States: George W. Bush (2007, Book I)]
[February 22, 2007]
[Pages 175-185]
[From the U.S. Government Publishing Office www.gpo.gov]



Remarks in a Discussion on Alternative Fuel Sources in Franklinton, 
North Carolina
February 22, 2007

    The President. Thank you. Please be seated. Thank you all very much. 
I like to tell people, part of my job is to be the educator in chief. 
And today we're at a really interesting facility in North Carolina to 
talk about what's possible, what dreamers are doing to enable us to 
achieve a very important national goal, and that is to become less 
dependent on oil from overseas, thereby ensuring that our national 
security interests are better intact and our economic security interests 
are better intact and that we're better stewards of the environment. 
That's what we're here to talk about.
    But before I do, I do want to thank some people. First, Laura sends her regrets. I'm a lucky boy to have her--
[laughter]--to have her as my wife. We've got a lot of friends here in 
Carolina, and she sends her best wishes to our Carolina friends. I told 
some folks yesterday, I'm not very objective when it comes to my wife, 
but I think the country is really lucky to have her as the First Lady.
    We're here at Novozymes, which is a company that makes enzymes. 
We're going to talk to Thomas, who is the 
president and plant manager, about what they do here and why it's 
relevant. But before we get there, I do want to say something about 
Steen Riisgaard. He's the president and CEO, 
Steen. He flew over from Denmark. I can't thank you enough for coming. I 
appreciate you being here. It's interesting--isn't it?--when you're able 
to sit in North

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Carolina and talk about a Danish company that is investing to not only 
help us become less dependent on oil but, equally importantly, is 
investing capital, which enables citizens from the United States to find 
good work.
    I toured around the facility, and I asked people at the facility how 
long they had been working here. And a lot of people have been here 20-
plus years. So for those people who are worried about free trade, I want 
you to remember that if this country were to wall ourselves off from the 
world, we would miss opportunities to find markets for our products and, 
at the same time, miss opportunities for citizens who work at a facility 
like this to find good work. It's in our interests that we have free and 
fair trade.
    And so I thank you very much, Steen, for 
investing in the United States of America, and I appreciate the fact 
that you're sensitive to the needs of the workers here in the United 
States of America. And I see you're sitting next to your 
Ambassador. Mr. Ambassador, welcome. I'm 
glad you're here.
    A person who understands the vast potential in the lands here in 
North Carolina to make us less dependent on oil is Richard Burr. He's the United States Senator. I'm proud he's 
joined us today, and thank you for coming, Senator. [Applause] There you 
go. Congressman G.K. 
Butterfield, thank you for being here, G.K. Appreciate you coming. He's 
the United States Congressman from the neighboring district, but he has 
enough interest in making sure that we succeed in alternative sources of 
energy that he's here. He's also on an important subcommittee in the 
House. I appreciate your interest, appreciate you joining us.
    I want to thank the agricultural commissioner from the great State 
of North Carolina, Steven Troxler, who's 
joined us today. Steve, thank you for coming. There he is, right there. 
Good to see you. See, Steve needs to take an interest in this, like he 
is, because doesn't it make sense to be able to say to our farmers, 
``Grow what you can grow so we become less dependent on oil.'' I like 
the idea of a President being able to say: ``Wow, the crop report is in; 
we're growing more corn than ever before, which means we're importing 
less oil from overseas.'' It's an exciting time to think about, that our 
farmers not only are going to grow what we need to eat, but it's going 
to grow what we need to run our automobiles.
    And that's coming. That's what we're here to discuss today. I know 
it sounds like a pipedream to some, you know, there goes the optimistic 
President talking again. But you're going to hear from some experts 
here. I'm just a history major. [Laughter] And I'm with Ph.D.s. 
[Laughter] Let me remind you who the President is. [Laughter] Yes.
    But the Ph.D.s are providing the brain power necessary to help 
plants like this develop technologies that will enable us to convert 
wood chips into fuels that are running automobiles. It's an interesting 
time--isn't it?--when you're able to say, we're on the verge of some 
breakthroughs that will enable a pile of wood chips to become the raw 
materials for fuels that will run your car.
    I appreciate the mayor, Jenny Edwards, 
here, mayor of Franklinton, for joining us. Where are you, Madam Mayor? 
Thanks for coming. Proud to see you again. And all the Novozymes 
employees, I appreciate you setting this deal up, and I appreciate you 
putting up with the hundreds who travel with me. [Laughter] And thank 
you for your warm hospitality. I really do.
    Look, here's the--I just told you the goal. The goal is for the 
United States to be--to diversify away from old, old ways. And it's 
possible. And I do believe it is a proper use of your money, taxpayers' 
money, to spend to encourage research on interesting ideas. We spent 
about $12 billion since I've been your President to try to stimulate 
technologies that will literally change the way we live. A lot of that 
money

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has gone into clean coal technologies. If you're worried about 
dependency on oil from overseas, then it seems to make sense to me that 
we ought to be able to have the technology so that we can better use the 
resources we have here at home.
    I don't know if you know this, we've got about 250 years worth of 
coal in America. That's what they estimate. And it makes sense, 
therefore, to spend money at the Federal level to develop technologies 
so we can burn that coal in environmentally friendly ways. The idea is 
to have zero-emission coal-fired plants here in America, and it's 
possible, and we're making progress toward that goal.
    I happen to believe that if you're concerned about the environment 
and want to deal with renewable sources of energy, that we need to 
pursue nuclear power. Those powerplants emit zero greenhouse gases. It 
doesn't require any hydrocarbons from overseas to run those plants. So 
we're beginning to license new plants. We're spending money on wind and 
solar energies. It makes sense to be able to--as the price of 
hydrocarbons goes up, it makes sense that there be alternative sources 
of energy coming to the market as quickly as possible.
    So we're making pretty good progress. But if you really want to 
reduce the amount of oil that you consume, you got to reduce the amount 
of gasoline you use. In other words, if you say, ``We want to reduce our 
dependence on oil,'' what you really got to do is change gasoline usage 
in the United States. And there's a couple of exciting things that are 
taking place--one is new battery technologies. We're spending money at 
the Federal level--and by the way, there's a lot of private sector money 
going into alternative sources of energy. And someday, you're going to 
be able to get in your car, particularly if you're a big-city person, 
and drive 40 miles on a battery. It's coming. And by the way, the car 
doesn't have to look like a golf cart--[laughter]--it could be a pickup 
truck. [Laughter]
    And that technology is around the corner. And if we're able to drive 
the first 40 miles, or, say, 20 miles on gasoline [electricity],* 
there's a lot of big-city folks that will never have to use a drop of 
gasoline on a daily basis. They'll be driving via electricity. These are 
lithium ionic batteries, technology--so when you hear that term, you 
just got to know, there's a lot of folks and a lot of money aiming hard 
to get this to the market as quickly as possible. Why? Because we've set 
a goal for the United States to be less dependent on oil.
---------------------------------------------------------------------------
    *White House correction.
---------------------------------------------------------------------------
    Secondly--and this is what we're here to talk about today--is 
ethanol. It says that the new developments in ethanol--in other words, 
fuel derived from corn--can be diversified. Here's the problem. Right 
now we're consuming about 7 billion gallons of ethanol a year made from 
corn. And it's a pretty standard process. People here at this facilities 
have developed the enzymes necessary to break the corn down in an 
efficient way so that we can use ethanol derived from corn. The problem 
is, we got a lot of hog growers around the United States--and a lot of 
them here in North Carolina--who are beginning to feel the pinch as a 
result of high corn prices. A lot of the cattle people around the United 
States--I have got a few of them in my home State of Texas--they're 
worried about high corn prices affecting their making a livelihood. In 
other words, the demand for corn, because of agricultural use and now 
energy use, is causing corn prices to go up. I bet you the agriculture 
commissioner is hearing from folks.
    And so how do--the question then is, how do you achieve your goal of 
less dependence on oil without breaking your farmers? without breaking 
your hog raisers? Corn farmers happen to like it, but I'm talking about 
the--[laughter]--people dependent on corn.

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    And here's how: You develop new technologies that will enable you to 
make ethanol from wood chips or stalk grass or agricultural waste. And 
that's what we're here to talk about. Is it possible, and if it is 
possible, how close are we to achieving the technological breakthroughs 
that I believe are possible so that our--so that we're changing our 
habits?
    And these are exciting times; they really are. I've always said, 
``America needs to stay on the leading edge of technological change.'' 
It will mean we remain a really important economy in the world, but it 
will also mean that our folks will be able to find good, high-paying 
jobs.
    In this case, being on the leading edge of technological change 
means that we'll also be able to deal simultaneous with economic 
insecurities that come when China demands more for oil, the world 
produces less, the price of oil goes up, and so does the price of gas at 
the pump here in North Carolina; national security concerns, where some 
people who've got oil don't like us, and therefore, may be willing to 
use their energy resources to try to cause America to take a different 
view of the world--and environmental concerns. And all these three 
concerns come together with technology as the solution.
    And so, Thomas, tell people what you do. 
[Laughter]
    Thomas Nagy. Well, that was a nice 
introduction, and thank you, Mr. President. You may know, and many of 
you here--first of all, I want to welcome you very, very deep from my 
heart, and from all my colleagues here in Franklinton, welcome to North 
Carolina, welcome to Novozymes, and also, welcome to the guests here.
    The President. Well, thank you. Like, you're the president, right?
    Mr. Nagy. Well, you're the President. I'm--
[laughter]--well, okay, no; anyways----
    The President. It didn't take him long to learn, you know. 
[Laughter]
    Mr. Nagy. Novozymes is the world's leading 
biotechnology company within the field of industrial enzymes and 
microorganisms. We market more than 600 products around the globe, and 
all of these products have the same in common, that they--sort of like, 
it's good for the environment. It's good for businesses because when 
using our products, you use less resources, less energy, less water, and 
hence, you make better use----
    The President. So you make enzymes.
    Mr. Nagy. We make enzymes. And enzymes is 
sort of like the key component you need to have when you convert starch 
or the corn to sugar that you can then make to alcohol or the ethanol.
    The President. Right.
    Mr. Nagy. But also, it's got to be the key 
component when you want to make your switchgrass or your biomass to 
sugar and then to ethanol.
    The President. So the enzyme begins to break down the raw materials 
in a particular raw material that will enable us to make more ethanol.
    Mr. Nagy. That is correct.
    The President. Is that what you're saying?
    Mr. Nagy. Yes.
    The President. Now--so is this a--is this like a huge distillery? 
[Laughter]
    Mr. Nagy. Our plant here?
    The President. Yes.
    Mr. Nagy. Well, you could say what we do 
here--we use microorganisms, and the way we make these enzymes is by the 
use of these microorganisms. And you could compare our process to if you 
brew beer or wine. We take some agriculture raw materials like starch, 
again, or corn, and then we ferment the enzymes, basically, like you 
would ferment wine. Then the product here is the enzymes that we can 
then ship off to ethanol plants around in the U.S. And they use it today 
to break down the starch in corn and make ethanol. So we are a key 
provider of a key technology to make this happen for you.

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    The President. Absolutely. And I presume that one of the bottlenecks 
to achieving widespread ethanol production is the cost of enzymes. Have 
you seen any appreciable decline in the cost of enzymes since you have 
been producing it?

[At this point, Mr. Nagy, president, Novozymes North America, Inc., made 
further remarks.]

    The President. Yes. I want to repeat this, because you actually--
he's talking about your money. [Laughter] And he 
said that we gave a grant--we, the taxpayers of the United States, gave 
a grant to the researchers of this company. See, if they could not 
reduce the cost of producing the enzymes that would be critical to 
making ethanol, and this company was able to do so--reduced the cost by 
a factor of 30, which, I think, is a justifiable use of taxpayers' 
money, to see those kinds of results.
    Mr. Nagy. Thank you.
    The President. Yes. You got a lot of Ph.D.s and advanced degrees 
here?
    Mr. Nagy. Yes, we do. [Laughter] We have a 
few, yes.
    The President. You do?
    Mr. Nagy. Yes, we do.
    The President. The reason I mention that is that part of remaining a 
competitive society is to make sure our children get a good education 
early, so that it is possible to get advanced degrees or high--at least 
a degree beyond high school. If you want a good job in America, you 
better go on after high school. I mean, the jobs in places like this are 
jobs that require brain power, as much as anything else. And therefore, 
the educational system of this State, for example, has been critical in 
attracting industries such as the company we're talking about here. I 
mean, I go walking through the halls and shaking hands with people--we 
got people on--doing sophisticated computer programming; we got lab 
technicians who have got advanced degrees in bioengineering. And my only 
point is, it reminds me of how important higher education is for this 
country. And I applaud the folks of North Carolina about being on the 
leading edge of education, and that's why you got companies like here--
like this company here paying pretty good money for jobs, I guess.

[Mr. Nagy made further remarks.]

    The President. Good. Well, Thomas, thanks, 
buddy.
    Mr. Nagy. You're welcome.
    The President. I appreciate it. You handled it well. [Laughter]
    Kevin Wenger.
    Kevin Wenger. Yes.
    The President. Yes, Kevin, how are you? 
What do you do?
    Mr. Wenger. I'm great. I'm the manager of 
the R&D group that we have here in North Carolina for ethanol research.
    The President. For this company.
    Mr. Wenger. For this company, yes, yes. We, 
about 5 years ago, decided to invest in a dedicated R&D group for 
ethanol process development, and we decided to anchor that research 
group here in North Carolina, because the U.S. is really where the 
ethanol market has been very strong.
    The President. And you've got a degree in what?
    Mr. Wenger. I have a degree in chemical 
engineering, Ph.D. from Colorado State University.
    The President. Good.
    Mr. Wenger. And I've been here in Novozymes 
since I finished graduate school in 1994.
    The President. And so in 1994, were you thinking switchgrass into--
[laughter].
    Mr. Wenger. I've always been interested in 
alternative energy and making ethanol. There wasn't so many jobs related 
to switchgrass in 1994. [Laughter]
    The President. Well, cellulosic.
    Mr. Wenger. Yes. But I was always--I've 
always been interested in fermentation also, and so Novozymes is a 
fermentation company, and that's how I ended up here.
    The President. Yes. Interesting.

[[Page 180]]

    Mr. Wenger. Yes.
    The President. And so I'd like to quote what he said. Kevin said, ``It's going to be a challenge''--talking about 
achieving what we're talking about here--``but if we look at how far we 
have come in the past 5 years, we have so much momentum, it shouldn't be 
that tough.''
    And the reason I quote a person who knows 
what he's talking about when it comes to developments necessary to bring 
the cellulosic ethanol to market, I quote it because I presume in that 
optimism, there's realism.

[Mr. Wenger, senior manager, Biofuels Research and Development, 
Novozymes North America, Inc., made further remarks.]

    The President. What he referred to is 
something I should have talked about earlier, and that is, I set a goal 
of the United States reducing our gasoline consumption by 20 percent 
over the next 10 years. That's the 20-10 goal. In other words, it is a 
goal. And I mandated a fuel standard that says, we'll be using 35 
million gallons of ethanol or alternative fuel over the next 10 years.
    Now, the reason I did that is because I think it's possible to do 
it. And the reason I think it's possible to do it is because of people 
like Kevin telling me it's possible. Remember, 
I'm the history major. [Laughter] And so the advances you've seen in 5 
years--if you're able to take yourself back 5 years ago to today, it is 
a noticeable difference, a--obviously reduced the cost of enzyme, for 
example, which is an important development.
    Mr. Wenger. Yes, absolutely, it's a very 
noticeable difference, and in terms of the number of industry players 
that are really interested in this technology and are also willing to 
invest in making this technology happen, including Novozymes as an 
industry player, it's really amazing what we've seen over the last 5 
years.
    The President. Yes, great.
    Mr. Wenger. Yes.
    The President. The high price of energy has caused private capital 
to say that it's going to be impossible for a society like the United 
States to sustain its use on gasoline. So whether it be Novozymes who is 
investing or private sector funds, that money is coming in. See, they're 
fueling new research and development. So we've got the Government 
helping, but also, you've just got to know that the private sector is 
very much involved with trying to invent the technologies necessary to 
take advantage of a society that recognizes it has to diversify away 
from energy.
    And I repeat to you: We're all connected, and so when a Chinese 
economy grows and their demand for oil goes up, it affects the price 
that you pay for gasoline. People got to know that. And therefore, it's 
important for us to continue to advance these kinds of research 
projects.
    I met Dr. Mike in Greeley, Colorado, a 
year ago.
    Michael Pacheco. Golden, Colorado, Mr. 
President.
    The President. Golden--exactly, Golden, Colorado. [Laughter] How 
quickly they forget, anyway--[laughter]. I am 60. [Laughter] Golden, 
Colorado. Michael, tell them who you work 
for.

[Mr. Pacheco, Director, National Bioenergy Center, National Renewable 
Energy Laboratory, made further remarks, concluding as follows.]

    Mr. Pacheco. Two years ago, we issued a 
study with USDA, put two Agencies together, that showed that the U.S. 
could produce enough raw biomass that's equivalent to about 60 percent 
of all the oil that we use in the United States. The problem is, is most 
of that biomass is not an easy material to convert. It's not like corn 
grain. And so our research at NREL----
    The President. Explain to people what you're talking about, like----
    Mr. Pacheco. Things like forest 
residues, things like fast-growing trees and switchgrass--the major 
constituent in that

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material is a cellulose fiber--usually accounts for more than half of 
the----
    The President. Do you know what switchgrass is? Tell them what 
switchgrass is.
    Mr. Pacheco. Switchgrass is a native 
grass that grew in the Midwest. It's a grass that grows in relatively 
poor conditions; it can survive droughts very well.
    The President. Rocky soil and dry. Sounds kind of like parts of 
Texas, doesn't it? [Laughter] Imagine, however, if you're able to grow a 
grass, where it's rocky soil and dry, that you're able to convert into 
energy. You're talking about a major change in the lifestyle of your 
children and my children and their kids. I mean, this is--anyway, go ahead.
    Mr. Pacheco. That's a--[laughter]--
you're doing very well. [Laughter] That's a big part----
    The President. I am passionate on the subject. [Laughter]

[Mr. Pacheco, made further remarks.]

    The President. You know, it's interesting, you're probably wondering 
whether or not automobiles can be easily converted to use ethanol, and 
the answer is, absolutely. There's a lot of automobiles in the Midwest 
that are filling up with 85-percent ethanol, called E-85 pumps. It 
doesn't take much. So one of the barriers to the advent of a lot of 
ethanol use is not the automobile. It's easy to convert them. As a 
matter of fact, some of you out there probably have got a car that can 
use ethanol, and you just don't know it--flex-fuel automobiles, they're 
called.
    Secondly, the production process--once we figure out what needs to 
take place internally--is not that expensive, relative to huge gasoline 
refineries. What will happen is, when you get a wood chip breakthrough, 
for example, where it becomes cost effective, you're going to have 
ethanol production plants all across North Carolina, where the wood 
chips can be gathered.
    One of the reasons we keep talking about costs, it's just real 
practical. Somebody is not going to fill up their car with ethanol if it 
costs a lot more than gasoline. The consumer is pretty wise, and they 
care about the environment--no question about it. But if a person is 
having to drive back and forth to work, they're going to generally pick 
the most economically competitive fuel to do that. People want to keep 
money in their pocket, and therefore, if it costs less using gasoline, 
they'll use it. So therefore, that's why we're driving these research 
dollars, to get the cost of producing ethanol down so it can compete. 
And it's going to happen, because as that price of oil goes up, the 
price of gasoline goes up, which makes ethanol more competitive. And one 
reason--just so you know--one reason why there's been such a push is 
because when the price of oil went up from early 2001 to where it is 
today, about $60 a barrel, people saying: ``We may not be able to 
sustain this; we better get moving.'' And that's what's happening.
    North Carolina State--Ratna, welcome. Thank 
you. You're a doctor of?
    Ratna Sharma. Biological engineering.
    The President. Biological engineering. Chemical engineering. 
Biological engineering. [Laughter] People should be getting the picture 
that we've got a lot of smart people working on this project. When 
you've got Ph.D.s surrounding the President talking about doing what's 
right, we've got a lot of brain power working on it. And that's where 
you're going to get your breakthroughs.
    Anyway, so what are you working on?

[Ms. Sharma, assistant professor, Department of Biological and 
Agricultural Engineering, North Carolina State University, made brief 
remarks.]

    The President. So what do you think? I mean, how long have you been 
doing this for?

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    Ms. Sharma. I've been doing this for about 
4 years.
    The President. Really? So when you got your Ph.D., you never dreamt 
you'd be thinking about converting wood to oil or fuel. What did you 
feel?
    Ms. Sharma. Well, I was trained as an 
agricultural engineer, and I grew up on--in our ag university campus 
with farms around me.
    The President. Oh, I see.
    Ms. Sharma. So I always saw residues lying 
around and plants and stuff. And I got my Ph.D. in food safety 
engineering, where I learned about microorganisms. So then I saw this 
opportunity--it was like putting together engineering and microbiology, 
to process something and get value from something that's typically not--
--
    The President. And there are other people at North Carolina State 
working with you on this project?
    Ms. Sharma. Yes, there are. There are 
people working on utilizing forest residues, wood chips for converting 
to ethanol. There are people working on different ag residues--sweet 
potatoes, which is a starch base; feedstock; people working on 
biodiesel, from--again, from agricultural resources.
    So there are a lot of people working on overcoming the challenges of 
pretreatment and converting the carbohydrates into sugars and then 
eventually fermenting it into ethanol. And my focus has been more on ag 
residues like cotton stalks, hays, and straws, which would typically not 
be useful.
    The President. Cotton stalks, pretty interesting, isn't it?
    Ms. Sharma. They are.
    The President. They now get plowed up into the ground. Your idea is 
to get them so they can end up in somebody's automobile, not in the 
ground.
    Ms. Sharma. Exactly, because there is a lot 
of potential. And like switchgrass, which grows in marginal lands--and 
we have, like you mentioned, a big swine industry here in North 
Carolina. So the advantage is, we could possibly put the two together, 
use animal waste as a nutrient source to grow the switchgrass and then 
convert it into ethanol, so you're getting energy from waste.
    The President. So are people pretty upbeat about it? People feel 
pretty upbeat?
    Ms. Sharma. Well, people who are aware and 
looking forward to switching from fossil fuels to renewable energy, yes, 
they are.
    The President. Feeling pretty good.
    Ms. Sharma. And they feel it's achievable. 
We can do it. We just need to work a little harder on that.
    The President. Yes. A little more money and a little harder. 
[Laughter] Talk to my man, Michael. He's the 
guy distributing some of the money. [Laughter] Well, good. Thanks, 
doc. Thanks for joining us.
    Ms. Sharma. Thanks, Mr. President.
    The President.  I'm sure proud you're here. NC State is a fine, fine 
institution. I know you're proud to work there.
    Ms. Sharma. Yes, I am, definitely.
    The President. Ryan, where are you from?
    Ryan Adolphson. I'm from the University 
of Georgia in Athens, Georgia.
    The President. It's a bold man to come here to North Carolina. 
[Laughter] A great school, by the way. What do you do?
    Mr. Adolphson. I'm with the 
university's--I'm in charge of our bio--our pilot facilities that are 
looking into early transitioning some of this technology from the bench 
out to industry, looking at really the wide or broad spectrum of this 
concept of biomass to energy that includes fuels and includes electrical 
and different bioproducts, and really running the gamut of this whole 
type of industry. And we have a pretty large research facility looking 
into this at all levels.
    The President. In Athens?
    Mr. Adolphson. In Athens, yes--
biorefining and carbon cycling center that we've recently started in the 
last 2 years.
    The President. What is a bio--I mean, what is a carbon recycling 
center?

[[Page 183]]

    Mr. Adolphson. Carbon cycling.
    The President. Carbon cycling.
    Mr. Adolphson. Right. So we're looking 
into the concept of a biorefinery, which Mike mentioned, and really 
taking a little bit bigger picture view, stepping back, not looking only 
at ethanol but counting ethanol as a significant piece to the puzzle, 
but looking at all the other products that can be generated from 
biomass. You know, similar to a petroleum refinery that takes a barrel 
of crude and doesn't just make diesel and gasoline but 50, 60 other 
products out of that.
    So we're looking at our wood chips as that barrel of crude, taking 
that, and turning it into a larger profit stream than just a single 
product. And we believe that's going to drive the economics----
    The President. Like what other products?
    Mr. Adolphson. Well, there's a whole host 
of products. You know, the char, the stuff that's in a thermochemical 
process, instead of a biological process, or the sugar platform. The 
Department of Energy really breaks up when they talk about our 
production of ethanol in two pathways: One is thermochemical, and the 
other is our fermentation--or our sugar platform that we've kind of been 
talking about now.
    The thermochemical platform allows us to take all these different 
biomass streams, treat them with heat in a certain way, release all of 
the energy from those, and we can capture that, turn that into our 
product.
    So one product we have left is the carbon that's left over, and 
we're able to look at that as a soil amendment and take that carbon, 
without releasing it into the atmosphere, and put it back into the 
ground. And then we have everything that comes out of that biomass that 
we can turn into ethanol and we can turn into specialty chemicals for 
our chemical industry as precursors to things like nutriceuticals, 
pharmaceuticals. And then we have the gas that comes off that could be, 
maybe, cleaned up and used as a pipeline-quality gas, like natural gas, 
to heat homes.
    The President. All from one big pile of wood chips?
    Mr. Adolphson. All from one big pile of 
wood chips, right. You know, we're at a very unique place----
    The President. You've got to dream big in order to be able to get it 
done. [Laughter] That's good.
    Mr. Adolphson. We are at a unique place 
right now, and the technology is there.
    The President. Pretty interesting, isn't it? It's--I'm not so sure 
if they'd believe me in the coffee shop in Crawford if I told them what 
he just told me. [Laughter] But it's 
possible.
    Mr. Adolphson. It is, right. I like to 
say, we're not there yet, but we can see it from here.
    The President. You can; yes.
    Mr. Adolphson. We've got two--on the 
ground in the next 18 months in Georgia. We've got a biorefinery taking 
wood chips to ethanol. We've got a traditional corn ethanol plant going 
in. We've got two, what we call integrated biorefineries, that are going 
to be pulling mostly--we have 24 million acres of commercial forest in 
Georgia. So that's a big priority for us. And the pulp and paper 
industry has been going other places.
    The President. Are they investing?
    Mr. Adolphson. The industry itself?
    The President. Yes.

[Mr. Adolphson, director, Georgia Industrial Technology Partnership and 
the University of Georgia Biomass Processing Facilities, made further 
remarks.]

    The President. Yes, yes. Absolutely, yes. That's pretty interesting, 
isn't it? Thanks for coming. I'm glad you came over.
    Mr. Adolphson. Thank you, Mr. President. 
We're excited to be here. Great opportunity.
    The President. And then we're going to end up with Terry. Terry Ruse.
    Terry Ruse. All of the Ph.D.s around the 
table--I don't have one of those, but I----

[[Page 184]]

    The President. I'm glad to join you. [Laughter]
    Mr. Ruse. I'm happy to report to you that the 
ethanol industry is alive and well and up and taking nourishment.
    The President. And so what do you do?
    Mr. Ruse. I am the chief operating officer 
for Agri-Ethanol. That's a privately held ethanol company in Raleigh.
    The President. And what do you--so what----
    Mr. Ruse. We are developing--our strategic 
plan is to develop ten 108-million-gallon-a-year ethanol plants in the 
South----
    The President. So you're going to be the manufacturer?
    Mr. Ruse. We are going to be the 
manufacturer.
    The President. Right.
    Mr. Ruse. Thanks to the vision of Dave Brady 
and the guys that own Agri-Ethanol, I've been able to develop a really 
flexible project in that we have a design to start out as a corn plant 
to process corn. We were building 11,000 foot of track, big loop track 
to be able to bring corn in by rail and take ethanol back out.
    In the center of that loop track, we've engineered the ability to 
handle wood chips.
    The President. Interesting.
    Mr. Ruse. But we've got all that in place. We 
have a CO2 company that will process the CO2, 
anything--any of the CO2 that doesn't go to that direction to 
make food-grade liquid carbon dioxide will be directed into hydroponic 
gardening or into growing algae to support an adjacent biodiesel plant, 
that we have the real estate to put one of those on.
    The President. So you intend to buy the enzymes from this company to 
run in your plant----
    Mr. Ruse. We have this--as a matter of fact, 
we have offered them the opportunity to establish a field research 
laboratory on our site so that they don't have to go long distances to 
get their people and do really groundwork at our facility.
    The President. And where is this thing?
    Mr. Ruse. It's in Aurora, North Carolina. 
It's the first one. It's about 160 miles east of Raleigh.
    The President. And when will you--are you building it now?

[Mr. Ruse made further remarks.]

    The President. You see, you can't build a plant far away from the 
raw material. That's the interesting thing about this industry. What 
he's basically saying is, is that investors think 
you have to be in the middle of a corn field, really. And that's why 
there's a lot of plants being built in the Midwest, because there's a 
lot of corn in the Midwest.
    Mr. Ruse. But because of the fact we're 
closer to the population density centers for the ethanol and the animals 
that we have in North Carolina, we can prove that our plant is as 
competitive as the plant in Iowa.
    The President. You can't have a centralized plant and ship your 
ethanol long distances, either. The production needs to be close to the 
raw material and the users, is what you're saying. It's the economics.
    Mr. Ruse. That's exactly correct. And this--
each one of these plants will produce about 400,000 tons a year of 
highly digestible, high protein feed to help the hog farmers, that you 
alluded to, get over their heart pain of----
    The President. High corn.
    Mr. Ruse. ----of high corn. And coming from 
the farm, the thing that I understand most is the resiliency of the 
American farmer.
    The President. You bet.
    Mr. Ruse. You give him a good price for the 
corn, and he will grow the corn. And I think that when the March 
planning report comes out, you'll see closer to----
    The President. A lot of corn.
    Mr. Ruse. ----13- or 13\1/2\-billion-bushel 
corn market and 90 million acres planted than what we've seen in the 
past.

[[Page 185]]

    The President. That's right.
    Mr. Ruse. And so all of the price concerns 
from the animal growers and from the Wall Streeters will be evaporated.
    The President. Will be eased somewhat. That's right. He's right. It's amazing how the market responds.
    Mr. Ruse. And the one last piece of our 
project is that we intend to build a ``green'' truckstop on each one of 
these sites that sells biodiesel; sell E-10 and E-85.
    The President. That would be good. E-10 is ethanol, 10-percent 
ethanol.
    Mr. Ruse. Ten-percent ethanol and 85-percent 
ethanol and then biodiesel.
    The President. Yes. Well, the purpose was to give everybody a sense 
of where a lot of smart people and good capital are moving. And smart 
people are here working on some amazing technologies that--you know, 
that I believe 10 years from now, people will say: ``Gosh, it's 
interesting that they were worried about this particular technology 
coming to fruition,'' because it's coming to fruition. And the role of 
the Government is to stimulate thought and investment and set goals. And 
we've set a big goal, really have--reduction of gasoline by 20 percent 
over the next 10 years.
    I wouldn't have done that if I didn't think it was achievable. Part 
of it is to change our CAFE standards on automobiles, which will 
encourage conservation. The other part is to change the fuel mix across 
America.
    And this is a coming time; it really is. And I want to thank those 
of you who are on the frontline of changing it. It must be exciting for 
you to be able to work on something so novel and so encouraging and so 
important for our country.
    I thank the good folks at this important company for letting me come 
by to say hello. I ask for God's blessings on the United States of 
America. Thank you.

Note: The President spoke at 12:10 p.m. at Novozymes North America, Inc. 
In his remarks, he referred to Steen Riisgaard, president and chief 
executive officer, Novozymes; and Denmark's Ambassador to the U.S. Friis 
Arne Petersen. A participant referred to David L. Brady, chairman and 
chief executive officer, Agri-Ethanol Products, LLC.