A mixed GOP message on ethanol

Source: Dan Piller, Des Moines Register • Posted: Saturday, August 25, 2012

Texas Gov. Rick Perry, whose 2008 effort to waive the federal renewable fuel standard that is the basis for ethanol demand came back to haunt him during the recent Iowa caucus campaign, on Friday joined the governors of Arkansas, Delaware, Maryland and North Carolina in another request for the waiver.

In a letter to U.S. Environmental Protection Agency director Lisa Jackson, Perry said “”the RFS may have been a well-intentioned effort to move our country toward energy independence, but it has, predictably, done more harm than good. Not only is it driving up grocery prices for all families, it is also putting increasing strain on business.”

The EPA last week opened a 30-day comment period on the waiver. It has 90 days to make a decison, a timetable that would effectively throw the politically-charged issue past the November Presidential election.

Perry’s letter landed in the EPA in-box on top of a letter from Iowa Gov. Terry Branstad, urging the EPA to maintain the renewable fuel standard. To add to the Republican confusion over the issue, presumptive-GOP nominee Mitt Romney last week released an energy plan that called for “maintaining” the renewable fuel standard

That prompted Bob Dinneen, executive director of the U.S. Renewable Fuels Association, to cheer Romney in a statement, saying “”we applaud Governor Romney’s commitment to domestic renewable fuels and his recognition of the importance of the RFS.”

The debate over the renewable fuel standard has more to do with the agricultural economies of various states than political ideology. Texas and most southern states grow relatively little corn but raise more livestock. Arkansas is a major poultry producing state and Texas is the nation’s number one cattle feeder.

Iowa is a major livestock producer – it is number one in hog production and number five among cattle feeders – but corn has long been the state’s signature economic product. Even the historic drought this summer isn’t expected to dislodge Iowa’s status as the number one corn producer in the U.S.

The uneasy relationship between corn farmers and livestock producers was expected to improve this year amidst what the U.S. Department of Agriculture hoped would be a record corn crop on the largest corn planted acreage since 1937. Instead, the U.S. faces the possiblity of a decline of as much as 15 percent in corn production this year due to the drought that is the worst since the mid-1950s.

The renewable fuel standard, ironically, was enacted by congress in 2005 at the behest of then-President George W. Bush amidst a surge in gasoline prices. The RFS touched off a boom in ethanol production that has made Iowa the number one ethanol producer in the U.S. About 40 percent of the U.S. corn crop now is ground for ethanol.

The anti-renewable fuel standard faction has been joined by the American Petroleum Institute, which represents the major oil companies. The API has worked around the edges of the issue, complaining about the increase in the ethanol blend from ten percent to 15 percent approved last year by the EPA and the requirement that it buy certificates for the equivalent of use of non-corn ethanol that doesn’t yet exist.

This week’s Republican Convention in Tampa isn’t likely to serve as a platform for a debate on renewable energy, not if Romney wishes to preserve the appearance of harmony in his party..

But for those who like their politics with a regional edge, a date to circle will be Sept. 26 when Branstad convenes a meeting of Midwest governors, corn producers all, in Des Moines.

Branstad, never shy about his support for ethanol and agriculture, has signalled that he would like to use the Midwest Governors’ Association as a platform for the defense of the Renewable Fuel Standard.