I read it as an attempt by the admin's economists to explain the fungibility of oil.  It's being taken as "backing off" ... but that might be journos having fun.
Odo --
Yeah, the Energy Sec's point was perfectly correct -- there's no practical way to reduce imports from the Middle East by 75% while keeping everything else the same. And so it's a good thing he pointed this out, though I doubt many people who haven't been paying attention to oil will get the point.

But it's still dishonest for Bush to say this, since it conflates two different problems: oil dependence and the geopolitical misfortune of where we have to get it. It's a very short-sighted way to make a rather modest alternative-energy proposal more palatable to gung-ho SUV-driving jingoists.

By the way, he seems to have stuck to this conflation on the first stop of his most recent road show.