Ethanol no longer a third rail in Iowa

Source: By Marc Heller, E&E News reporter • Posted: Wednesday, December 4, 2019

Sen. Chuck Grassley is pressing the Trump administration harder than anyone to side with farmers on biofuels policy. But if the president doesn’t, he said, the political stakes might not be all that high.

“I’d say there’s a price to be paid but not as big as it would have been 10 or 15 years ago,” Grassley (R-Iowa) told reporters on a conference call. “It would be offset to a considerable degree if the economy remains about the same as it is.”

The politics of biofuels may be changing in Iowa, the top state for ethanol production and a critical early ground in the presidential contests. The number of farmers has been shrinking, as in the rest of the country, and recent candidates such as Sen. Ted Cruz (R-Texas) — running for president in 2016 — have succeeded despite openly criticizing biofuel mandates.

Factors like the national economy could play a bigger role, Grassley said. Polling in Iowa suggests issues like national security tend to far outweigh biofuels in the minds of voters, much as the state relies on agriculture for it own economic fortunes.

And while majorities in polls said they support the renewable fuel standard’s biofuel-blending requirements, the issue appears to resonate mostly with older voters, hinting at diminished influence over time.

The administration is caught between biofuel advocates lobbying for increased volumes blended into the fuel supply, and petroleum and environmental groups urging officials to scale back the requirements.

That disagreement is playing out over provisions that allow small refineries a way out of the requirements when they demonstrate an economic hardship. EPA is preparing regulations that could be made final later this year or in early 2020.

EPA’s actions on the RFS have appeared at times to waver between the two lobbying forces. The agency lifted seasonal restrictions on higher-ethanol fuel called E15 earlier this year but has also continued to grant nearly all the petitions it receives for small-refinery exemptions from biofuel-blending requirements.

Trump himself has spoken favorably about ethanol and pledged repeatedly to maintain a 15-billion-gallon annual requirement for conventional ethanol required by the RFS — a promise Grassley and biofuel groups often cite.

In a conference call yesterday, Grassley credited Trump with opening the way to year-round sales of E15, as well as other pro-farmer moves such as canceling the Obama Clean Water Rule that could have subjected small waterways in farm country to environmental regulation.

Voters ‘up for grabs’

Polling shows support for the renewable fuel standard in Iowa. The Iowa Biodiesel Board said its most recent statewide survey, in July, showed 76% of residents and 78% of voters supporting an expanded RFS. A majority — 60% of residents and 61% of voters — said a presidential or congressional candidate’s position on the RFS is important.

But support for the RFS among residents is greatest with those 55 and older, the survey also showed — 70% percent for men, and 58% for women.

A more recent poll conducted by Selzer & Co. for The Des Moines Register showed that Trump’s overall job approval in the state is 85% among Republicans — but that just 53% of Republicans support his actions on biofuel policy.

A leading advocate for ethanol who’s also been active in GOP politics in the state said he doesn’t think biofuel has lost its political punch. The farm economy is poor, raising comparisons to the buildup before the 1980s farm crisis, said Monte Shaw, executive director of the Iowa Renewable Fuels Association.

“To me, it’s context. If everything was going great, maybe one thing doesn’t have as much influence as it once did,” Shaw told E&E News.

The sharp reaction in Iowa to EPA’s granting of 31 small refinery exemptions earlier this year proves that biofuel remains a touchy issue, Shaw said. “There was a very angry reaction to that, and that has not dissipated,” he said.

Although Iowa is conservative, it’s far from a lock for Republicans. The state voted Democratic for president in 2000, 2008 and 2012.

While Trump can be expected to win in rural areas, negative perceptions on biofuel policy could narrow his margin in many counties — making them light red instead of dark red — allowing the Democratic candidate to make up for those losses with wins elsewhere, he said.

“Anyone who thinks ag voters in Iowa aren’t up for grabs is wrong,” Shaw said.

To Grassley, Trump has strength in agricultural areas even if EPA doesn’t rewrite the regulations in ethanol’s favor. So far, he said, Democratic candidates aren’t talking much about the issue, with the exception of Sen. Amy Klobuchar (D-Minn.) and South Bend, Ind., Mayor Pete Buttigieg.

“I would hope that Democrats, farmers or agriculture people that are going to the Democratic caucus would remember that there’s only a couple of the 20 candidates that are talking about biofuel,” Grassley said.

“What’s wrong with the Democrat farmers and biofuel people or agriculture people that are going to the Democratic caucus that aren’t pressing every candidate about this? So you’ve got to remember that maybe the Democrats aren’t as helpful to us on RFS as they should be,” he said.