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For Immediate Release
Office of the Press Secretary
February 20, 2006

Press Gaggle by Scott McClellan
Aboard Air Force One
En Route Milwaukee, Wisconsin

10:41 A.M. EST

MR. McCLELLAN: Happy President's Day. I've got a special guest with me today, our National Economic Advisor Al Hubbard. I'll turn it over to him in a minute, but first let me just kind of touch on the day, and also I've got two world leader calls that I want to read out to you.

The President called President Arroyo this morning. The President offered our sincerest condolences over the loss of life in the town of St. Bernard that was destroyed by the massive mudslides. The President also reiterated our commitment to continue helping in the rescue and relief efforts. As you all are aware, we've got a number of Marines from an expeditionary unit that are there in the town of St. Bernard that are helping with the relief efforts. Our USAID also authorized our embassy in Manilla to provide tens of millions of dollars in disaster relief assistance funds, as well.

And then following that, the President spoke with President Fox of Mexico. This was an opportunity to talk about border issues. Primarily, they talked about the increased border violence, and the two leaders talked about the importance of working together to improve our border security and stop the violence. They also talked about designating a high-level contact within each government to work together on these issues. The President designates Secretary Chertoff, who he spoke with this morning, as well, to work with his counterpart in Mexico on these issues.

The President also gave President Fox an update on congressional efforts to pass comprehensive immigration reform. The President reiterated his commitment to comprehensive immigration reform, including a temporary guest worker program. And then they also talked about the security and prosperity partnership that was developed by Canada, Mexico and the United States, and talked about the possibility of meeting soon on that initiative. And that's really the readout for that call.

Today, when we get to Wisconsin, the President will be touring the Johnson Controls Battery Technology Center. This is a hybrid battery laboratory. The main focus of this facility is improving lithium -- lithium ion batteries, and they're really working on developing the next generation of hybrid batteries here at this facility. And so you all will get an opportunity to see this. These are batteries that will be able to charge faster, and the batteries will also last longer in hybrid cars. And Johnson Controls has really been a leader in developing advanced lithium battery technology.

And then following that, the President will be making remarks on his Advanced Energy Initiative. As you all know -- the President will be expanding on what he talked about in the State of the Union. As you all know, the President believes we ought to really be investing in new technologies to put us on a path to a more affordable, reliable and secure energy future. And that's what he'll be talking about in his remarks. And he'll expand on his Advanced Energy Initiative, which really has two main objectives: one, to transform the way we power our cars and trucks, and two, to transform the way we power our homes and offices. And he'll be talking about the various initiatives within this plan that he has outlined, as well.

And then following that, we will be going to Auburn Hills, Michigan where the President will tour United Solar Ovonics. And this is a company that develops solar cells and manufactures solar panels. So the President will highlight the importance of expanding the use of solar energy, as well. And that's something he'll touch on in his remarks prior to that, as well. I expect after the tour, he'll make some brief remarks to the pool about the visit there.

And then we go to Colorado for the evening, and that's really what -- all I have to begin with. I don't know if Al has anything to add to what I said.

Oh, and one last thing, too. Another aspect of this is something I've touched on, and the President has touched on. This Advanced Energy Initiative is really something that he believes we can work on in a bipartisan way to get something done for the American people. This is a shared goal of Republicans and Democrats, and he believes it's an opportunity that we can really move forward on for advancing technology and helping to secure our energy future.

And with that -- I don't know if Al has anything to add or if you just want to go straight to questions.

DIRECTOR HUBBARD: Not really, other than, you know -- the President is very committed to basically severing our addiction to crude oil. And the good news is, we've invested over $10 billion in energy research since the President has been in office. And it's had a significant impact, and we're going to see a payoff in the next few years, and start the process towards more energy independence.

As he said a number of times, it took us a long time to get it in the situation we're in, and it's going to take us a long time to get out of it. But the important thing is to start making the kind of investments, and make the commitment to become energy independent. And we're going to start realizing the benefits of that. Really, we've already started with the hybrid cars, and those hybrid cars are going to become more sophisticated, then ethanol, and finally, hydrogen.

So we feel good about where we are, but it's going to take awhile to get to where we want to go.

Q Does the President use any solar energy at the ranch? Or does he or any member of his family use a hybrid or flex-fuel car?

MR. McCLELLAN: Let me get you an update on that. There is some stuff they do to improve energy efficiency, I believe. But let me check on that.

Q Are there going to be any new little details today about the initiative at all?

MR. HUBBARD: I didn't hear your question.

Q Are any new details coming out today about the initiative, or --

MR. HUBBARD: Well, the -- it's hard for me to remember what's out there, and what's not out. (Laughter.)

Q That's okay. Don't worry about that. (Laughter.)

MR. HUBBARD: But obviously, the book -- the little briefing book -- it gives a lot more details. You know, the President is going to be talking about exactly how the -- you know, we're going tour a cellulosic laboratory where they're doing all the research. I'm sure you'll learn -- we'll all learn a lot about where we are in that process. And our goal is, by 2012, to be able to produce ethanol from other plant waste at a competitive price. And then we're going to see an incredible facility in Michigan, making the solar panels.

And by the way, those are used -- it's my understanding, we'll learn more about it. -- they're actually used in Iraq right now to assist with the soldiers and some of their needs -- the products that are actually produced in Michigan.

So I don't know about what more details are coming out. There's a lot more. I mean, in the State of the Union, he only -- what was it -- two paragraphs on energy. And obviously, he's going to give a whole speech on energy. So there will be a lot more details.

MR. McCLELLAN: He'll be expanding in greater detail on what he outlined in the State of the Union Address. And I think many Americans have not heard about the cutting-edge technology that we're pursuing and that we're on the edge of some real breakthroughs when it comes to energy efficiency.

Q Why not go even more ambitious with this, you know, like a Manhattan-type project, with tighter deadlines, more money, faster timetable?

MR. HUBBARD: He's been very clear about what his goals are. And by the way, when -- originally we were talking about cellulosic ethanol being competitive by 2020. But in talking to the research folks at the Department of Energy, they indicated if they could get additional funds, they felt like they could -- that there was a very good chance that we could produce competitive cellulosic ethanol by 2012.

And so the President responded to that, and dramatically increased the funding from $90 million to $150 million this year, and intends to sustain that. So we will meet that goal. 2012 is a very good -- you know, is not that far away.

And then with lithium ion, again, the research folks at the Department of Energy made it clear that we were close in terms of developing the lithium ion battery, but additional resources would be helpful. So again, the President agreed to -- for additional investment in the lithium ion battery technology, to accelerate that process.

And in the solar area, again, significant -- and the details are in the book -- but there's a significant increase in investment, again, responding -- you know, the President went to the Department of Energy, went to Sam Bodman, and said, how do we speed this up? They came back and said, this is what you need to do in solar, this is what we need to do in ethanol, this is what we need to do in battery technology, and we need this increased commitment financially. And so the President has made that commitment. And by 2015, we believe that we will be able to produce competitive solar energy without a subsidy.

And by the way, we're doing it in coal technology, too, I should point out. The President -- we also believe by 2015, that we will be able to produce coal -- non-subsidized electric-producing coal plants that emit zero pollution.

So again, I think those are very ambitious goals. And it's going to have a huge impact on the country.

Q Let me argue the flip side. Why should the federal government be investing in hybrids when they're flying off the dealer's lots? And how do you respond to your Republican critics who say this is really industrial policy coming out of the White House?

MR. HUBBARD: If you talk to anyone in the technology industry, they will tell you that one of the many reasons America is the leading technology country in the world is because of our -- one, it's our culture, because we're entrepreneurial, number two, it's because we have very smart people, but number three is because of basic research by the federal government. That has a huge spinoff impact on technology in America. And that's why -- I'm getting a little bit off the subject, but this is important. That's why the President is committed to double the National Science Foundation research over the next 10 years, because that's so important to technology.

And basic research will -- you know, the market doesn't -- the marketplace -- the free marketplace doesn't work for basic research, because you don't get the returns on basic research like you do in applied research. And so companies won't put the money into basic research. And that's why it's imperative that the federal government do it with taxpayer money.

Q Some of the critics say, though, that what you're proposing is all incentives, and that maybe you need to do some things like tighten up regulations and change the CAFE standards, and things like that. Why not pursue that approach, as well?

MR. HUBBARD: Well, as you know, we've recommended -- and there's going to be a CAFE increase for light trucks and -- and SUVs, right. That begins in 2007, and we proposed increasing it further after 2007. We don't control the -- we don't control the CAFE standards for automobiles. But we believe what's most important is -- well, number one is the high cost of fuel is encouraging people to buy more fuel efficient vehicles. And secondly, what's most important is that we invest in technology so that the American people can continue with the lifestyles they currently have, purchasing fuel that is non-polluting and that comes from sources that are independent from unreliable foreign countries.

Q Can I ask you about the crude oil market?

MR. HUBBARD: Yes, sure.

Q Talking about unreliable markets, there's a -- there's a situation in Nigeria right now that's pushing crude oil prices higher. How concerned -- how close are you monitoring that situation? And how concerned are you that this is going to create longer-term problems for prices?

MR. HUBBARD: Well, that's somewhat out of my lane in terms of the foreign policy aspects. But obviously, we're -- from the economy's perspective, the price of oil is very, very important. And that's why it's so critical that we make the investments today so we have more energy independence in the future.

The current situation where we're importing I think 58 percent of our crude from overseas, and a significant portion of that from areas that are not dependable, is not a good situation. Again, it took us awhile to get into this situation, it's going to take us awhile to get out. But what's most important is that we make the commitment to make the investment to achieve energy independence as soon as possible.

Q Is there anything the U.S. is doing to alleviate --

Q -- percent of our crude approximately from overseas. By 2015, when you see these technologies up to speed, you say they won't need incentives, they won't need subsidies. What percentage will -- of crude will we get from overseas at that point?

MR. HUBBARD: You know, I don't have that in my head right now, so I can't tell you. But we do have -- you will recall, in the State of the Union, the President set out a goal to reduce our dependence on Middle Eastern oil by over 75 percent.

Q What I'm asking is, you have a -- you said that you'd use aggressive timetables, 2015 being one of them. And since the goal is to reduce the reliance on foreign sources of oil, it would seem you would also have an estimate of by how much we would be reducing that dependence. So is there a correlation you see between this advanced technology and our use of foreign oil?

MR. HUBBARD: There definitely is, and there will start to be substitution. But just to give you an example, we believe by 2012 we'll be producing competitive ethanol from switch grass and other plant -- biomass, and other plant waste like wood chips and corn stalks, et cetera. But it's not going to have -- you know, the plants will begin in 2012, but it's going to build up over time. It's just like right now, we produce about 4 billion gallons of -- last year, around 4 billion gallons of ethanol. You know, we expect that to probably grow a couple of billion gallons this year.

But again, we use 140 billion gallons of gasoline a year. So it's not going to happen overnight. It's a gradual process.

Q Do you have any estimates of what's -- how it will happen?

MR. HUBBARD: Well, we -- I mean, obviously, internally, we show projections, and that's how we come up with by 2025 that we will be able to reduce the amount of petroleum that we important that will be equivalent to over 75 percent of what's expected to be imported from the Middle East.

Q Are those projections public also?

MR. HUBBARD: Pardon me?

Q The internal projections, the time line, is that public?

MR. HUBBARD: I don't think it is. We did put out the -- and I can get that for you -- the numbers that we used for 2025.

Q But the time line between now and then, that's not public?

MR. HUBBARD: We have not put that out, right. And you know, there's a lot of uncertainty, and so much depends on what the price of oil is at that point in time, and how aggressively the private sector invests. I happen to believe that once this -- the technology breakthroughs occur, it's going to happen much more quickly than the analysts think. Just like the -- did any of us think 10 years ago that our teenage kids would have cell phones? I don't think so. But it's remarkable what happens when you have technological breakthroughs, and I see that in the energy area. But it's obviously -- we rely on the economists and the energy analysts who provide us with their projections.

Q There was a report on television last night about the -- about global warming and demands contribution to the atmosphere, and so on, was -- is the U.S. government -- does the U.S. care that the polar ice caps are melting? And this whole sort of energy reform that you're putting forth, does the environment play any part in it?

MR. HUBBARD: I'll let Scott take that one.

MR. McCLELLAN: What was your question.

Q It was a story on "60 Minutes" last night about global warming and -- what's the administration's position on any of this energy reform, or whether it's --

MR. McCLELLAN: The United States is leading the way in investing in the kind of technologies to help us address greenhouse gas emissions. That's something we -- remember, we're on track to meet the President's goal of reducing greenhouse gas intensity that he outlined. And we also have joined in partnerships around the world to invest in research and development when it comes to climate change. It's an issue that the President takes seriously, and we announced the Asia Pacific Partnership, remember, and that is an initiative to help lead the way to address some of these issues associated with climate change.

Q Do you take Michael Crichton on the issue seriously?

MR. McCLELLAN: What's your question?

Q There's a story --

MR. McCLELLAN: I think what I can point to -- I'm not going to get into talking about private meetings he's had, but look at the initiatives we've outlined, look at the leadership the President is providing to address the challenges of climate change. It is an issue that we take seriously, and that's why we've been investing billions in research and development to better understand the science of climate change. That's why we've initiated partnerships, like the Asia Pacific Partnership, to address these issues, as well.

Q But Michael Crichton as an expert or a novelist the President enjoys reading?

MR. McCLELLAN: The President read his book, and he was glad to have the opportunity to visit with him.

Q -- believes as expert opinion?

MR. McCLELLAN: I think you should look at what we outlined, Jessica. If you want to ask the President about it, you are -- you're welcome to do that at some point. But I'm not going to get into talking about private meetings that he has.


Q Scott, I've got a question on -- Hamas --

MR. McCLELLAN: Well, I think that -- let me go back to what we said, that the choices were for Hamas to make. Hamas has a choice before it. And the international community has spelled out what that choice is, and the Quartet laid it out in a statement. You cannot be a partner for peace if your policy is the destruction of Israel, and if your policy is based on the use of terror and violence. That's why the Quartet called on Hamas to renounce violence, to disarm, and to acknowledge Israel's right to exist. So this is really a choice for Hamas to make if they want to be a partner in peace. There has been a policy in the Palestinian government in place for years now, and as I pointed out last week, if that policy were to change, then, obviously, the approach of the international community would change, as well. And these are issues we stay in touch with the Europeans on, and other governments, and we'll stay in touch with Israel on these issues.

Q The timing of Israel cutting off the tax revenue different from what the Quartet has recommended. So is there a concern about that?

MR. McCLELLAN: Well, we'll stay in touch with Israel on these issues. I think that our view has been spelled out very clearly, not only from our government, but in the statement of the Quartet, of which we are a member. And this is really about Hamas, and the choice that Hamas has before it. That's the issue. And Hamas needs to make the decision if they want to be a partner in peace. And that's what we want. We want a partner in peace. And you can't get to the two-state vision that the President outlined if both parties aren't going to be a partner in peace.

Q Can I ask one more on -- legislation on NSA. Are you guys continue to discuss with members of Congress moving forward on joint legislation that would make White House happy?

MR. McCLELLAN: We do. As I indicated last week, we're open to ideas from members of Congress, so long as they don't compromise this vital tool. This is a -- the terrorist surveillance program helps us to connect the dots and save lives and prevent attacks. And that's why it is a vital tool in our war on terrorism. And I think most leaders understand that this is not only a necessary tool, but a vital tool in our efforts to disrupt plots and prevent attacks here at home. We will continue to listen to ideas from members of Congress and we will continue to work with them on legislation that would protect this vital program and address some of the issues that have been raised.

Q Scott, is the President comfortable with this port ownership issue?

MR. McCLELLAN: Well, I actually talked about that last week. There is a process that's in place to address these issues, when it comes to foreign investment and national security issues. It's the CFIUS process. And the CFIUS process -- during the CFIUS process transactions like this go through a rigorous review process. And that's important. Secretary Chertoff talked a little bit about it yesterday. But that's the process that is set up for these types of matters. And they work to get assurances through that process before proceeding forward.

Q He's not going to intervene in the process, then, despite calls from members of Congress --

MR. McCLELLAN: I'm going the leave it where I did.

Thank you.

END 11:06 A.M. EST

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