Text 4104, 842 rader
Skriven 2007-02-22 23:31:22 av Whitehouse Press (1:3634/12.0)
Ärende: Press Release (0702225) for Thu, 2007 Feb 22
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President Bush Participates in Panel on Cellulosic Ethanol
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For Immediate Release Office of the Press Secretary February 22, 2007

President Bush Participates in Panel on Cellulosic Ethanol Novozymes North
America, Inc. Franklinton, North Carolina


˙˙˙˙˙ Fact Sheet: Harnessing the Power of Technology for a Secure Energy
Future ˙˙˙˙˙ In Focus: Energy

12:10 P.M. EST

THE PRESIDENT: 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. (Applause.)

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. 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
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.
(Applause.)

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. There you go. (Applause.) Congressman G.K. Butterfield. Thank you
for being here, G.K. Appreciate you coming. (Applause.) He's a 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, Steve Troxler, who's joined us today. Steve, thank you for
coming. There he is, right there. (Applause.) 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 pipe dream 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 and applause.)

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. (Applause.) 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.

Look, here's -- 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 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 power plants 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 some day 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 [sic] 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-ion 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.

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 facility 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.

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 and applause.)

MR. NAGY: That was a -- that was a nice introduction. 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. (Applause.)

THE PRESIDENT: Well, thank you. Like you're the President, right?

MR. NAGY: Well, you're the President. (Laughter.) Okay, 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 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. 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, is that
what you're saying?

MR. NAGY: That is correct.

THE PRESIDENT: Now -- so, is this a -- is this like a huge distillery?

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 insides, basically, like you would ferment wine. 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.

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 --

MR. NAGY: Certainly. We have worked with enzymes for many, many years at
Novozymes. We have a 60-year tradition of this, and so we are very, very
good at it. We are the leading edge on all the technologies in all the
markets we are, and therefore we are a company dedicated to innovation,
because innovation, as you talk about, being able to compete with others,
innovation is our tool to do so. And so we reinvest more than 10 percent --
actually 13 percent of our annual sales back into R_

The research we do in cellulosic ethanol right now is the biggest research
of what we have in the company, where more than a hundred researchers
around the globe work on solving the issues ahead of us. What we have been
able to do since 2000 until we reported it in 2005, on a grant provided to
us from Department of Energy, is to reduce the cost of conversion by a
factor of 30.

THE PRESIDENT: I want to repeat, 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 taxpayer's money to see those kinds of results.

MR. NAGY: Thank you.

THE PRESIDENT: 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 -- at least a degree
beyond high school. If you want a good job in America, you better go on
after high school. 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: That's correct. One of the reasons, and what we really enjoy here
is also the -- you alluded to the education system here, but it's an
integrated system from community colleges through all the levels at
university. And there's a number of universities in the state that we also
enjoy very close collaboration amongst. Some of them are NC State
University, of course.

THE PRESIDENT: Good. Well, Thomas, thanks, buddy. I appreciate it. You
handled it well. (Laughter.)

Kevin Wenger. Yes, Kevin, how are you? What do you do?

DR. WENGER: I'm the manager of the R_

THE PRESIDENT: For this company.

DR. WENGER: For this company, yes. We, about five years ago, decided to
invest in a dedicated R_

THE PRESIDENT: And you've got a degree in what?

DR. WENGER: I have a degree in chemical engineering, Ph.D. from Colorado
State University.

THE PRESIDENT: Good.

DR. 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.)

DR. 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.

DR. 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: Interesting. 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've come in the past
five 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 him because I presume in that optimism there's realism.

DR. WENGER: Yes, I'm very optimistic, but also I can see how the 20-in-10
goal is very achievable. If you look at what's happening now, what's been
happening with corn ethanol over the last five years and the developments
that are coming in terms of implementation of cellulosic, it's really
amazing. Things are really starting to happen.

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 this is 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 five years -- if you're able to take
yourself back five years ago to today, it is a noticeable difference, a --
obviously reduced the cost of enzyme, for example, which is an important
development.

DR. 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're
seeing over the last five years.

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. 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.

DR. PACHECO: Golden, Colorado.

THE PRESIDENT: Exactly, Golden, Colorado. How quickly they forget.
(Laughter.) I am 60. (Laughter.) Golden, Colorado. Michael, tell them who
you work for.

DR. PACHECO: Mr. President, I work for the National Renewable Energy
Laboratory. We're the leading laboratory for the Department of Energy in
the field of renewable energy. We have a very robust program, as you know,
in the field of biofuels, and it's focused right now on cellulosic ethanol.

I agree with Kevin, your 20-in-10 goal is very achievable. In fact, the
growth of the corn and the biodiesel industry, which since you signed the
Energy Policy Act two years ago, have been growing at over 100 percent per
year. Those fuels are going to make a major portion of that 20 percent. But
we have to, as you indicated, begin the transition to use a broader base of
fuels.

Two years ago we issued a study with USDA, 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 that most of that biomass is not an easy material to convert.
It's not like corn grain. And so our research --

THE PRESIDENT: Explain to people what you're talking about.

DR. PACHECO: Things like forest residues, things like fast-growing trees
and switchgrass -- the major constituent in that material is a cellulose
fiber, usually accounts for more than half of --

THE PRESIDENT: Do you know what switchgrass is? Tell them what switchgrass
is.

DR. 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.
(Laughter.)

DR. PACHECO: You're doing very well. (Laughter.)

THE PRESIDENT: I am passionate on the subject. (Laughter and applause.)

DR. PACHECO: But that's a really big part of it, Mr. President, being able
to move to those marginal conditions and grow crops in areas where we're
not currently growing crops, and then to have those crops that are
specifically designed to produce feedstocks that are adapted well for the
enzymes that Novozymes is producing can really increase the yield -- that
is, how much ethanol we can make from a ton of biomass.

One of the challenges when we started this project between NREL and
Novozymes was that no one in the world really felt like enzymes could be a
cost-effective technology in producing ethanol from raw material. Today all
the leading researchers in the world are working in that area because of
the partnerships and because of the progress that Kevin has already talked
about.

But we're not there yet. And while I'm optimistic, like Kevin, there's
still a lot of hard work left to do, Mr. President. And we have work in the
pre-treatment area, we have work still to do in the enzymatic hydrolysis,
and we still have research in the fermentation side. And so DOE right now
is considering proposals to work with industry in the area of developing
fermentation organisms, which is a really important part because the yeast,
the bugs today that we use to make ethanol won't work in the future with
these new feedstocks. So it's really important that we start this
transition.

At NREL we work with all the other national labs. We especially work with
Argon National Lab and Pacific Northwest and Idaho and Oakridge. Those are
all labs that work together within my center, and we try to coordinate our
efforts to utilize all the skills at the national laboratories, because
each of the labs brings a unique set of skills to this challenging problem.
We also work with a lot of other companies, in addition to Novozymes. And
those interactions are equally as important, because one of the things that
we're trying to do, Mr. President -- when we talked last year we talked
about this -- is to try to develop transitions that grow from existing
industries. So instead of replacing the corn ethanol industry, we see
cellulosic as evolving from it.

Similarly, we can see how the pulp and paper industry might be able to
evolve into bio refineries. Maybe even the massive petroleum refineries can
someday evolve to take biomass materials, and you know we're doing some
research in that area, as well.

It's really important that we stay on this track, because in the long run,
there's no other sustainable source of liquid transportation fuels other
than biomass. So we have to succeed at this.

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 E85 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, it's 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?

DR. 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.

So what are you working on?

DR. SHARMA: Mr. President, first of all, I'd like to thank you for your
support and interest in the development of these technologies for
cellulosic ethanol.

I essentially represent all the research of my colleagues at North Carolina
State University and across the country in different universities who have
been working in this area of converting residues from the farm, forest,
animal operations, possibly even food industry waste to convert it into
ethanol and make our country self-reliant and achieve the goal of 20-in-10.

But, as has been mentioned, there are challenges. We have to overcome
those, and it's possible we can do that. We do need more investment and
funding support, definitely, to speed up this process of achieving this
goal in 10 years.

THE PRESIDENT: So what do you think? I mean, how long have you been doing
this for?

DR. SHARMA: I've been doing this for about four years.

THE PRESIDENT: Really? So when you got your Ph.D. you never dreamt you'd be
thinking about converting wood to oil for fuel. What did you feel?

DR. SHARMA: Well, I was trained as an agricultural engineer, and I grew up
on -- on an ag university campus with farms around me. 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?

DR. 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
--

THE PRESIDENT: Cotton stalks, pretty interesting, isn't it?

DR. SHARMA: They are.

THE PRESIDENT: They now get plowed up in the ground. Your idea is to get
them so they can end up in somebody's automobile, not in the ground.

DR. SHARMA: Exactly. So there is a lot of potential. And like switchgrass,
which grows in marginal lands. And we have, like you mentioned, a big swine
industry 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 --

DR. SHARMA: Well, people who are aware and looking forward to switching
from fossil fuels to renewable energy, yes, they are.

THE PRESIDENT: Yes, pretty good.

DR. 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. I'm sure proud
you're here. NC State is a fine, fine institution. I know you're proud to
work there.

DR. SHARMA: Yes, I am, definitely.

THE PRESIDENT: Ryan, where are you from?

MR. ADOLPHSON: From the University of Georgia in Athens, Georgia.

THE PRESIDENT: 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 bio products, 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 -- bio-refining and carbon cycling center
that we've recently started in the last two years.

THE PRESIDENT: What is a bio -- what is a carbon recycling center?

MR. ADOLPHSON: Carbon cycling.

THE PRESIDENT: Carbon cycling.

MR. ADOLPHSON: Right. So we're looking into the concept of a bio refinery,
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 bio mass. 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: What other products?

MR. ADOLPHSON: 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. 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 him 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 -- has been going other
places.

THE PRESIDENT: Are they investing?

MR. ADOLPHSON: The industry itself?

THE PRESIDENT: Yes.

MR. ADOLPHSON: The part of the pulp and paper industry, that is the
growers, the land owners, are very interested in finding a market for their
wood so they can get a higher price for it. I think the paper mills might
be less interested in paying a higher price for their feed stock than the
growers are. But yes, they're definitely investing. The University and
Governor Purdue has sent a mandate out for us to really invest in
public/private partnerships. So we can take the public money, and he likes
to say he wants to see industry with skin in the game, who is able to put
money and people involved in this effort.

And so we're -- we've created a facility. We can locate industry on campus
with us, so that when we do develop a technology, this technology transfer
from academia to industry is seamless. We're excited about that because
guys like us who are in academia or government, we can provide money and
resources, but it's going to be the market that will have to pick it up and
take it to get it into the consumers.

THE PRESIDENT: 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 we're going to end up with Terry. Terry Ruse.

MR. RUSE: All of the Ph.D.s around the table. I don't have one of those,
but I --

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: 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 10,
108-million-gallon-a-year ethanol plants in the --

THE PRESIDENT: So you're going to be the manufacturer?

MR. RUSE: We are going to be the manufacturer. 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. 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. Now 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
ground work --

THE PRESIDENT: 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: We are ready to break ground. One of the interesting facts about
that is that we have the site completely controlled. We have it totally
permitted. But in trying to talk to the financial people about putting
money, I've spent two years trying to convince them that it makes sense to
build an ethanol plant in North Carolina as much as it does one in Iowa.
And we haven't gotten that done. And so --

THE PRESIDENT: 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. And 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. 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 13 billion or
13.5 billion bushel corn market, and 90 million acres planted than what
we've seen in the past.

And so all of the price concerns from the animal growers and from the Wall
Streeters will be --

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 truck stop on each one of these sites that sells biodiesel, sell
E10 and E85.

THE PRESIDENT: That would be good. E10 is ethanol -- 10 percent ethanol.

MR. RUSE: Ten percent ethanol and 85 percent ethanol and then biodiesel.

THE PRESIDENT: The purpose was to give everybody a sense of where a lot of
smart people and good capital are moving. 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 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 -- 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 front line 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. (Applause.)

END 12:54 P.M. EST

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