With farms disappearing and the price of corn down, the Iowa caucus contest next year is shaping up to be the biggest front in the battle over the Renewable Fuel Standard, which requires a certain amount of fuel to come from green sources. For the most part, that means corn-based ethanol.
The fuel standard has been a boon for corn farmers, which means it’s a major political issue for Iowa and its first-in-the-nation presidential nomination contest.
“I think it is a significant issue,” Mr. Branstad told The Washington Times. “If you are for closing that industry down and don’t want to give them access [to the market], I think that could be a very difficult thing to explain to the people who live in the state and really believe in renewable fuels.”
Asked whether the issue could make or break a campaign, Mr. Branstad answered, “Yes.”
Ethanol and wind, another green-energy source, will be major issues for Republican presidential hopefuls descending on Des Moines this weekend for the Iowa Ag Summit, hosted by Bruce L. Rastetter, a major GOP donor who has made part of his fortune off the ethanol industry and supports the fuel standard.
“The RFS is the biggest issue at the summit. Corn prices are in the toilet, ethanol and biofuel plants are endangered — some already insolvent — and the RFS is crucial to farm state economies,” said Steffen Schmidt, an Iowa State University political science professor. “But there are many GOPers deadly opposed to ‘big government’ subsidies like this, so presidential candidates will be walking a fine and razor-sharp line between satisfying agriculture and ethanol interests and appealing to free market, anti-subsidy Republicans. They will be sweating it out as they walk up on Rastetter’s stage on Saturday.”
The federal standard requires that 10 percent of the nation’s fuel supply come from renewable sources. That has created an artificially inflated market for ethanol, which in the U.S. is generally derived from corn.
Conservatives balk at that mandate and object to government support for wind energy, which comes in the form of a tax credit designed to boost construction of wind turbines.
Sam Clovis, a candidate for state treasurer, predicted that the Renewable Fuel Standard will get unprecedented attention in the runup to the Iowa caucuses.
“It is going to be a tough couple of years for the agricultural industry, and there is going to be a lot of pressure from the building farm crises to put out safety nets for our agricultural industries,” Mr. Clovis said. “It will be difficult for candidates to thread the needle.”
Sen. Ted Cruz of Texas and Sen. Rand Paul of Kentucky, as well as former Texas Gov. Rick Perry, are among those who have expressed opposition to the mandate.
Indeed, Mr. Cruz teamed up with fellow tea party favorite Sen. Mike Lee of Utah to introduce legislation last year that would phase out the standard.
“I don’t think the federal government should be deciding which lobbyist to favor and which lobbyist not to favor,” Mr. Cruz said last month at the Iowa Freedom Summit. “Instead, the marketplace should be allowed to operate.”
Sen. Marco Rubio of Florida also believes the standard should be phased out.