Ethanol lobby threatens Biden in Iowa

Source: By Sarah Wheaton, Politico • Posted: Friday, October 9, 2015

Iowa farmers really want Vice President Joe Biden to run. But not necessarily because they’re eager to vote for him.

Instead, at a time that ethanol’s kind of a hard sell, growers of corn and other crops used to make biofuels believe a Biden run would provide them a critical bit of leverage right when they need it. At the moment, the Obama administration is previewing next year’s rules for the amount of ethanol that has to be mixed with gasoline — a regulation that has fueled the ethanol industry and earned untold millions for corn growers.

Unfortunately for the farmers, the Environmental Protection Agency has proposed reducing the ethanol requirement below the level mandated by law. Coincidentally, the agency is set to finalize that regulation in November -– right when the Iowa political season starts to heat up in earnest before the caucuses in January. And the people who care about this Renewable Fuel Standard are disproportionately in Iowa.

So, if he runs, renewable fuel producers have a clear message for Biden: We’ll hold you personally accountable for the EPA rule.

“You’re gonna own whatever the EPA puts out,” said Monte Shaw, head the Iowa-based America’s Renewable Future, which is launching a campaign to get caucus-goers to make ethanol a big factor in their decision.

Few policy issues stand to benefit as much from the combination of timing and geography as the renewable fuel standard.

Ethanol is up against fearsome enemies, and it doesn’t have a lot of allies. Oil companies hate having to pay to dilute their product, and they’ve got deep pockets for both lobbying behind the scenes and public campaigns that warn about higher prices at the pump and damage to car engines from too much biofuel. Environmental groups are ambivalent at best about the fuel source, which has its own problematic emissions, and worry the law encourages farmers to plow over conservation areas and untouched land to meet the demand for corn.

But in Iowa, where corn is king, there’s bipartisan agreement about keeping the renewable fuel standard robust. And even with corn ethanol falling of favor, farmers who grow the crops to make the next generation biofuel, known as cellulosic ethanol, are also predominantly in the Hawkeye State.

“This is really our one chance to say this is our little part of America called rural America,” said Shaw, who ran unsuccessfully for a Republican congressional nomination in Iowa last year.

While there’s little data to back it up, it’s taken as a given that a candidate from either party can’t win the state’s presidential caucuses if they’re not an ethanol champion. Sen. John McCain famously wrote off Iowa in 2000, citing his objection to ethanol subsidies, and this cycle, candidates from Sen. Bernie Sanders to (before he dropped out) Gov. Scott Walker have walked back early expressions of skepticism.

(The model is so effective that a lobbyist recently proposed that Palmetto State primary voters make Boeing subsidies “South Carolina’s version of ethanol.”)

Hillary Clinton remains a strong supporter of the renewable fuel standard, as were Barack Obama and Biden in 2007.

Today, Biden needs to atone for a perceived betrayal if he wants to beat Clinton, say biofuel lobbyists.

Citing a 2014 Reuters report, biofuel producers say Biden sold them out for two Philadelphia-region oil refiners when he intervened in last year’s update to the fuel standard, which was even worse for biofuels than the current proposal.

“Iowa knows that he very likely was involved at the inception of the bad idea that is threatening to undercut the renewable fuels industry,” which makes up five percent of the state’s economy, said Brooke Coleman, director of the Advanced Biofuels Business Council, a national group.

Biden’s aides reject any suggestion that the vice president has or will been involved with developing the ethanol standard.

“The vice president provides no input into the decision-making process, which is made by staff experts and leadership at the EPA,” said a Biden spokesperson.

Clinton, meanwhile, has re-upped her support for the ethanol standardpenning an op-ed in the Cedar Rapids Gazette in May that called for getting the quota system “back on track.”

“We shouldn’t be putting vehicle warranties in jeopardy because the corn constituency in Iowa thinks they’re going to dictate who the nominee is,” said Louis Finkel, executive vice president of the American Petroleum Institute.

The tactic won’t work anyway, Finkel added. “I’ve never been convinced that Iowa caucus goers in either party are making their decisions based on the Renewable Fuel Standard,” he said.

“I don’t know that it affects turnout, but I do think people want to know how candidates stand on it,” said Jeff Link, a Des Moines-based political strategist who consulted for Obama’s presidential campaigns.

“It’s more of a value statement than anything else,” Link added, “Are you standing with the main economic engine in the state, which is agriculture?”

But America’s Renewable Future has a new plan to tie the fuel standard to the caucuses. They’re aiming to get 50,000 Iowans to sign a pledge – 30,000 have so far – to only caucus for candidates who support it.

“There’s not a single-issue advocacy effort that has been as in-depth and as well-funded,” Shaw said, adding that the group will advertise on TV, radio, phones and direct mail to tell voters “who’s naughty and who’s nice.”

Clinton hasn’t sent back her questionnaire, Shaw said, but she’s on track for an A-rating.

So he urged Biden to aim for a “white horse” storyline, emerging as the hero who reversed a bad White House policy and saved Iowa farmers.

Otherwise, Biden will have to explain why “the administration that he’s the no. 2 guy in puts out a rule that rips the heart out of the RFS,” Shaw warned.

Whoever wins the presidential election will probably have to “own” Obama’s decision: Neither the fossil nor biofuel industries like the regulations as proposed, and the administration is bracing for lawsuits from both sides that would likely extend beyond 2017.