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Demand for Alternative Energy Poses Many Challenges


With the world's oil supply increasingly at risk of terrorist attacks and other disruptions, there is an international rush to develop alternative energy sources to power the growing number of cars around the world. In his recent push to develop alternative energy sources, President Bush has stressed the need for intermediate solutions such as ethanol and hydrogen.

At a time when 60 percent of the crude oil used by U.S. refineries comes from outside the country, President Bush says creating alternative sources of energy to replace fossil fuels is an economic and national security issue.

In a series of recent speeches promoting his Advanced Energy Initiative, first unveiled at the State of the Union in January, Mr. Bush said it is time to address the world's dwindling supply of fossil fuels.

"We got a real problem. America is addicted to oil. But I meant it, because it's a true fact, and we've got to do something about it now."

To promote his energy initiative, Mr. Bush toured a factory that produces batteries for electric cars as well as the National Renewable Energy Laboratory in the western U.S. state of Colorado -- a federally-funded research laboratory working on alternative energy sources like hydrogen to power the automobile of the future.

Mr. Bush adds, "If we can change the way we drive our cars and our trucks, we can change our addiction to oil. I mean, all of a sudden the whole equation about energy production begins to shift dramatically."

Mr. Bush's plan to reduce America's dependency on foreign oil includes increased investment in the development of alternative fuels like ethanol made from corn, and in battery technology to power hybrid vehicles that run on both fuel and electricity.

But Philip Clapp, President of the National Environmental Trust in Washington, says Mr. Bush's plan is too little, and too late.

He says since the 1973 Arab oil embargo nearly paralyzed America's transportation network, administrations since President Nixon's have been promising unrealistic solutions to deal with the nation's reliance on foreign oil sources. "President Nixon, in response to the first oil shock, launched Project Independence, which he promised would make the United States independent of foreign oil imports by 1980. 30 years later, after Richard Nixon's statement, if we'd been consistent, we actually could have capped our oil imports at maybe 30 to 40 percent, and be producing the majority of energy at home."

John Felmy, the Chief Economist for the American Petroleum Institute, takes Clapp's point a step further. "The reason we didn't achieve an improvement in energy independence was bad energy policy. We went the wrong way. We had windfall profit taxes and a lot of other bad energy policies that put us into the slide of the amount of dependence we are right now."

In any case, environmentalists and the energy industry agree it will take decades to convert the nation's infrastructure to handle alternative energy sources for automobiles.

This need for patience was underscored during Mr. Bush's visit to the national research lab. Mr. Bush acknowledges it will take time. "Our fleet is not going to change overnight. It takes a while. When you get new technologies available for people to buy -- hybrid vehicles or flex-fuel vehicles -- it takes a while to change a 220 million car fleet to a modern fleet."

But transforming food sources like corn or -- in the case of Brazil, sugar -- into fuel to power more vehicles could create an even larger problem. Philip Clapp says a choice will have to be made.

"There is actually going to be an issue: how much is devoted to autos, how much is devoted to fuel production and how much is devoted to food production."

Felmy of the American Petroleum Institute agrees, saying the world is already seeing the effects of increased use of ethanol. "Well, there is no question that if you were to dramatically increase the use of ethanol, it could have a significant impact on the food market, and in fact we're already seeing some of that. We're seeing the price, for example, of sugar going up as result of some of the demands for ethanol."

Experts say how the world meets its increasing appetite for energy will be one of the most important issues of the 21st century.