From Bush's SOTU address:

Others say that the government needs to take a larger role in directing the economy, centralizing more power in Washington....

It's not just others:

We will increase our research in better batteries for hybrid and electric cars, and in pollution-free cars that run on hydrogen. We will also fund additional research in cutting-edge methods of producing ethanol, not just from corn but from wood chips, stalks, or switch grass. Our goal is to make this new kind of ethanol practical and competitive within six years. Breakthroughs on this and other new technologies will help us reach another great goal: to replace more than 75 percent of our oil imports from the Middle East by 2025.

The Onion must be quoted:

What's all this about alternative energy and encouraging creativity? I voted for an oil man, not Jimmy Carter!

Funding basic science research is one thing, but we should let the market decide what energy technologies are most promising. Bush also proposed making the R&D tax credit permenant. That's a very good idea, and he should have stopped there. As for the problem of Middle East oil sales funding our enemies within the Muslim world, this is either a problem worth solving or it's not. It's a not a problem which we should pretend to solve at the taxpayer's expense. For more on this point, see these (1 2) TCS columns by Arnold Kling.