Bodman "has shown himself to be a problem solver who knows how to set goals and he knows how to reach them," Mr. Bush said at an announcement ceremony in the Roosevelt Room.
If confirmed by the Senate, Bodman's major challenge will be to get Congress to enact energy legislation, including one of the president's longtime goals of opening an Arctic wildlife refuge in Alaska to oil drilling.
"We'll pursue more energy close to home in our own country and in our own hemisphere so that we're less dependent on energy from unstable parts of the world," the president said.
Mr. Bush said his priorities for the Energy Department are to "develop and deploy the latest technology to provide a new generation of cleaner and more efficient energy sources" and to "promote strong conservation measures."
"In all these steps, we will bring greater certainty of cost and supply, and that certainty is essential to economic growth and job creation," Mr. Bush said.
Mr. Bush pledged to renew his push for legislation codifying the energy plan he unveiled 3½ years ago, which was stymied by lawmakers despite Republican domination of Capitol Hill.
Bodman also will have to find a way to untangle both legal and budget problems that have threatened progress on getting a nuclear waste dump built in Nevada. Congress this year refused to provide enough money to keep the Yucca Mountain waste project on schedule and a federal court earlier this year ordered a review of proposed radiation standards for the site.
Congress for four years has tried, and failed, to enact energy legislation. Mr. Bush has vowed to press lawmakers next year to try again.
The administration next year also will face continuing concerns about high oil prices and a winter that is expected to bring record high heating costs. Although crude prices have receded in recent weeks they remain unusually high, edging up on Thursday to $42.90 a barrel.
Bodman would replace Energy Secretary Spencer Abraham.
The nomination leaves one opening in Mr. Bush's 15-member Cabinet: a candidate to replace Tommy Thompson as secretary of health and human services. Nine members of Bush's Cabinet are leaving and six are staying in a major overhaul of the president's team for his second term.
Medicare chief Mark McClellan, who also has served as commissioner of the Food and Drug Administration and is the brother of White House press secretary Scott McClellan — is considered to be the top choice to replace Thompson.
The amount of changeover in Mr. Bush's Cabinet is on the high side for a second-term president. Presidents Clinton and Reagan saw seven Cabinet seats change hands after they won new terms, President Nixon nine and Presidents Truman and Johnson four each.
Bodman told Mr. Bush he wanted to "carry forth your vision of sound energy policy to ensure a steady supply of affordable energy for America's homes and businesses and to work toward the day when America achieves energy independence."
Bodman took over as Treasury deputy secretary last February after serving as deputy secretary at the Commerce Department.
At Treasury, he was charged with a range of matters, including making sure the economic recovery is lasting, stopping the flow of funds to terrorists and helping efforts to modernize the IRS.
The Energy Department manages the nation's emergency petroleum reserve. Despite frequent calls by some Democrats to use some of these reserves to ease prices, the administration has argued repeatedly that the stored oil should be used only in time of severe shortages.
Bodman said his new job would "combine all aspects of my life's work." He has taught chemical engineering at the Massachusetts Institute of Technology, served as president of Fidelity Investments, and run a chemical company. He graduated from Cornell University with a degree in chemical engineering in 1961 and has a doctorate in science from MIT.
"Each of these activities dealt with the financial markets and the impact of energy and technology on those markets," he said.
"If confirmed by the Senate, my colleagues and I at the Department of Energy stand ready to carry forth your vision of sound energy policy to ensure a steady supply of affordable energy for America's homes and businesses and to work toward the day when America achieves energy independence," he said.