GOP Presidential Hopefuls Risk Iowans’ Ire on Ethanol

Source: By BETH REINHARD, Wall Street Journal • Posted: Friday, March 6, 2015

Several Backed Sunset of Subsidies and Many Oppose Renewable-Fuel Standard

Corn is delivered to the Green Plains ethanol plant in Shenandoah, Iowa, earlier this year. Despite lower crude prices, ethanol plants across the nation continue to operate at a brisk pace.
Corn is delivered to the Green Plains ethanol plant in Shenandoah, Iowa, earlier this year. Despite lower crude prices, ethanol plants across the nation continue to operate at a brisk pace. PHOTO: ASSOCIATED PRESS

But several of the likely Republican candidates slated to address the state’s agricultural industry on Saturday backed the sunset of ethanol subsidies in 2011, and many oppose the industry’s new sacred cow: the renewable-fuel standard, which requires blending ethanol and other biofuels into the gasoline supply.

How the likely White House contenders navigate the issue will signal how much Republican politics are now driven by the party’s conservative base, which balks at government interference in the marketplace. Two GOP contenders who want to phase out the renewable-fuel standard, Florida Sen. Marco Rubio and Louisiana Gov. Bobby Jindal, are skipping the event.

One of the sponsors of Saturday’s summit, America’s Renewable Future, is planning a multimillion-dollar media blitz to promote candidates who support the fuel standard and attack those who don’t in the run-up to state’s first-in-the-nation presidential caucuses.

“They’re going to be in real trouble if they don’t, because we’re going to educate people on where the candidates stand,” said Eric Branstad, the son of Iowa’s governor and the director of the pro-ethanol campaign, billed as the industry’s most aggressive entry into presidential politics.

Thus, a federal regulation on motor fuel is emerging as another litmus test for candidates already squeezed between the GOP’s pro-business and tea-party wings on immigration, the Common Core academic standards and the Export-Import Bank.

Some Republicans coming to the Iowa Ag Summit courted support last week at a forum hosted by the conservative Club for Growth, which opposes the renewable-fuel standard. “We’d like to think that candidates who say they believe in free markets would, too,” said Barney Keller, a Club for Growth spokesman.

Texas Sen. Ted Cruz is co-sponsoring legislation to repeal the renewable-fuel standard, drawing praise at the recent Club for Growth event but leading a veterans group to run a newspaper ad last year demanding, “Do you want to import more oil from dangerous parts of the world?”

Mr. Jindal proposed phasing out the fuel standard as part of his energy plan released last year. A spokesman for Mr. Rubio said Wednesday said that the standard “cannot be permanent policy.”

Former Texas Gov. Rick Perry unsuccessfully sought federal waivers from the fuel standard for his state, saying it had a negative economic impact. Wisconsin Gov. Scott Walker declined to join a group of governors from corn-producing states, including Iowa, which urged the Obama administration in 2013 to maintain the fuel standard.

Kentucky Sen. Rand Paul hasn’t directly addressed the fuel standard and won’t be at the summit, but a spokeswoman said, “He does not support the government telling consumers or businesses what type of fuel they must use or sell.”

At least two Republicans due to attend the Iowa Ag Summit have supported the renewable-fuel standard: the past two winners of the Iowa caucuses, former Arkansas Gov. Mike Huckabee and former Pennsylvania Sen. Rick Santorum .

Former Florida Gov. Jeb Bush, who is making his first trip to Iowa since flagging his White House ambitions, doesn’t appear to have publicly commented on the fuel standard, which was signed into law by his brother, former President George W. Bush. However, the former Florida governor praised Republican presidential candidate Tim Pawlenty for “truth-telling” when he advocating phasing out ethanol subsidies in 2011.

When Jeb Bush helped launch the Interamerican Ethanol Commission in 2006 to promote sugar-based ethanol from Brazil, he quipped that the unpopularity of his efforts in the Midwest was “living proof that I’m not running” for president.

Longstanding support among presidential candidates for Iowa’s agricultural interests began to crack in the 2008 campaign, when Republican Sen. John McCain opposed federal ethanol subsidies that totaled $6 billion a year. Amid the tea party’s fight to trim government spending, a few GOP presidential candidates came out against the subsidies in 2011. One of them, former Utah Gov. Jon Huntsman, suggested his position made it impossible for him to compete in the Iowa caucuses.

Republican candidate Mitt Romney declared his support for the renewable-fuel standard one month before the 2012 caucus.

In a sign that the issue still carries political weight, Iowa Sen. Joni Ernst felt compelled to highlight her support for the renewable-fuel standard in her 2014 campaign after she was criticized for saying she was “philosophically” opposed to energy subsidies.

Supporters of the fuel standard say it keeps the petroleum industry from boxing out renewable fuels, protects 73,000 Iowa jobs and boosts a clean-energy source.

“They say the government shouldn’t be picking winners and losers, but they’ve been picking a winner for years, and it’s called petroleum,” said Monte Shaw, executive director of the Iowa Renewable Fuels Association.

The Obama administration has proposed scaling back but not eliminating the fuel standard. Hillary Clinton, the Democratic front-runner in 2016, was invited to the agriculture summit but isn’t attending. She backed the renewable-fuel standard in her 2008 campaign. A spokesman didn’t respond to an inquiry about her current position.