Insiders say the ethanol issue is not a deal-breaker in Iowa

Source: By James Hohmann, Politico • Posted: Friday, March 6, 2015

Ethanol is not a deal breaker in Iowa.

An outspoken supporter of the Renewable Fuel Standard, Bruce Rastetter, is hosting an Agricultural Summit Saturday that will draw almost all of the big-name Republican candidates. He will press each on whether they support a federal mandate that refiners mix a certain amount of ethanol into their gasoline.

Supporting ethanol subsidies was historically a litmus test in this state known for corn production, but today about two-thirds of Iowa insiders think a presidential candidate could win the caucuses while opposing the RFS.

Most Democrats and Republicans said it is an “important” issue, but they noted that the state GOP has become more conservative while the state has become less agrarian and the economics surrounding biofuels have shifted.

“Remember, we don’t all live on farms in Iowa,” said a Republican.

“The issue just doesn’t pack the political punch in Iowa (especially with Republicans) that it did a decade or so ago,” said another.

The tea party movement sees mandates of any kind as anathema: “A small group will be strongly for, a small group will be strongly against, but the majority are indifferent.”

The affected industry plans to spend seven figures on a campaign, America’s Renewable Future, to highlight the significance of the federal mandate, built around the argument that over 70,000 people are employed in the ethanol industry with a $5 billion annual impact on the state’s economy. The popular Republican governor’s son, Eric, is leading the effort.

“It will matter more than ever before just because the industry will have a larger presence,” said one Republican.

Another said it will be in the rural communities that are affected: “Beyond that, it will have minimal significance.”

Freshman Sen. Joni Ernst successfully threaded the needle during her 2014 GOP primary. She pronounced herself philosophically opposed to the Renewable Fuel Standard, but she said that it should stay in place as long as other industries got special breaks. Democratic ads highlighting a spokeswoman’s comment that Ernst would eliminate the RFS “in a perfect world” never seemed to get traction.

Another Iowa Republican said caucus-goers recognize that agricultural interests are only looking out for their bottom line and noted that oil companies could also spend to give air cover to outspoken RFS opponents like Texas Sen. Ted Cruz. “It’s not high on the list of voters’ concerns and people recognize the self-serving nature of special interest groups and discount their attempts to intervene in the process,” he said.