Iowa’s leading ethanol champion sets sights on a congressional seat

Source: Amanda Peterka, E&E reporter • Posted: Thursday, February 27, 2014

Monte Shaw is a rare breed: a conservative who is quick to criticize the oil industry.
As executive director of the Iowa Renewable Fuels Association, Shaw has pulled off publicity stunts to bash the “petroleum mandate,” his term for the de facto mandate from the subsidies that the oil industry receives.Last spring, for example, his group commissioned a sculpted cake of the U.S. Capitol with an oil rig bursting out of the dome and money strewn across the facade. Shaw handed out pieces of the cake at a faux party on Capitol Hill to celebrate a “Century of Subsidies” for Big Oil.But Shaw also supports the Keystone XL pipeline and wants an all-of-the-above energy policy. He’s conservative in other issues and wants to drive the conversation toward the federal debt.

That breed of Republicanism, combined with top-notch agriculture credentials, may well play out in Shaw’s favor in Iowa, the nation’s No. 1 ethanol-producing state. Shaw is running to fill the seat of Tom Latham (R-Iowa), who in December unexpectedly announced he would retire from Congress after 10 terms.

“When the ag economy does well, the rest of Iowa does well. I’m the only guy in the race that’s got a strong tie to agriculture,” Shaw told E&E Daily in a recent interview. “I do think that my knowledge and my connections and my passion for small towns and rural Iowa — and ethanol’s a part of that — will help me a lot.”

Shaw, who announced his candidacy earlier this month, is running in a crowded GOP field in southwest Iowa’s 3rd District. Among the candidates who will be on the ballot in a June primary are Iowa Secretary of State Matt Schultz, state Sen. Brad Zaun and Republican Sen. Chuck Grassley’s former chief of staff, David Young.

The winner will face a tough general election: The district went narrowly for President Obama in the past two White House contests, and it is considered a top pickup opportunity this year for House Democrats. The leading Democrat in the race, former state Sen. Staci Appel, had $369,000 in her campaign account as of Dec. 31.

While Shaw, 41, plans to run largely on spending issues — he says he joined the race because of worries that his two young children will be stuck with big debt — his greatest advantage may be his long history in Iowa’s agriculture and ethanol sectors.

“Of all the candidates in the race, Shaw is hands-down the best-versed candidate in the race on issues relating to agriculture and the rural economy,” wrote Craig Robinson, founder and editor in chief of the Iowa Republican, a political newsletter.

Iowa’s 3rd District includes Des Moines, the largest city in the state, and Beaconsfield, the state’s smallest. Because most of the candidates have only recently joined the race, only one has so far reported campaign finance information. Young had $398,000 on hand at year’s end.

Schultz picked up early endorsements from former presidential candidate Rick Santorum and conservative political action committee FreedomWorks. But unlike the neighboring 2nd District, where there’s a clear front-runner for the GOP nomination in Mariannette Miller-Meeks, the playing field in the 3rd District is still wide open.

“It’s a little hard to tell right now who has the inside track. Certainly, all of these different candidates seem to have the pros and cons and so forth, groups in the party that seem to support them,” said Timothy Hagle, a political scientist at the University of Iowa. “Right now, I can’t really say that Shaw or anybody else really has much of an advantage.”

‘Dirt under the fingernails’

Shaw grew up on a row-crop and livestock farm in rural southern Iowa. His father was a John Deere dealer and his mother a registered nurse.

“I’ve got the dirt under the fingernails as a kid, and that never goes away,” Shaw said.

The politics bug, though, bit Shaw as a grade-schooler in 1980, when he cast a vote for Ronald Reagan in a presidential poll by the Weekly Reader, a now-defunct weekly education magazine published across the nation.

He attended Simpson College, a small private school about 25 minutes south of the state capital, Des Moines. There, he joined the College Republican National Committee — a move that helped launch his first career in managing Iowa political campaigns.

In Iowa, Shaw ran then-Rep. Jim Lightfoot’s (R) 1994 re-election campaign, Grassley’s 1998 Senate campaign and Elizabeth Dole’s presidential caucus campaign in 2000. He also worked on the Iowa presidential campaigns of Bob Dole and Steve Forbes.

In 2000, at the urging of Grassley’s staff, Shaw ended up in Washington, D.C., working for the Renewable Fuels Association, the national trade group representing the ethanol industry. Shaw stayed on RFA’s staff until 2005, just as the nation first put in place a policy mandating that refiners blend ethanol into petroleum-based gasoline.

Not wanting to raise a family inside the Beltway, Shaw and his wife, Tina, whom he met in D.C., moved back to Iowa.

Coincidentally, the Iowa Renewable Fuels Association, which is not affiliated with the national organization, was in the market for full-time staff members.

“I just really feel blessed, because I was looking to come back to Iowa,” Shaw said. “And how could you find a better job, when you’re working for RFA, to all of a sudden go be the executive director of IRFA?”

As leader of IRFA, the largest state-level ethanol trade group, Shaw has been Iowa’s No. 1 ethanol cheerleader. He’s traveled across the state to meet with ethanol producers, hosted events to promote ethanol and traveled to D.C. to advocate for the ethanol industry’s policy priorities.

Shaw also stayed politically active on a volunteer basis: He successfully ran for three terms on the State Central Committee of the Republican Party, which acts as a board of directors for the state Republican Party.

Since Shaw has returned to Iowa, the ethanol and agriculture industries have boomed.

Since 2007, when the most recent renewable fuel standard was put into place, the value of Iowa farm products has risen nearly 51 percent, according to the Department of Agriculture.

Iowa currently has 42 refineries capable of annually producing 3.8 billion gallons — or about 30 percent of the nation’s ethanol production. The state also has 12 biodiesel facilities that can produce 315 million gallons of fuel made from soybean oil, animal fats and used cooking grease.

Even in Iowa, the ethanol industry has been in constant battle with the oil industry, which has put pressure on Congress in recent years to repeal the renewable fuel standard on concerns about the limit to the amount of ethanol that can be blended into gasoline. Most recently, the American Petroleum Institute launched a series of robocalls in the state warning that increased ethanol use could harm car engines.

But while Shaw has fought the oil industry on ethanol issues over the years, his relationship with Big Oil is nuanced.

“I’m not anti-oil. I’m anti-special treatment for oil,” he said. “I want a truly level playing field, and I won’t turn a blind eye to the federal petroleum mandate or their 100 years of subsidies when we’re talking about that level playing field. As long as those things remain in place, there’s not a level playing field.”

Favoring the Bush model

Shaw’s stance on energy squares with those of other Republican lawmakers from Iowa. Above all, he says he supports the conservative ideal of free-market competition. He wants consumers to have a choice at the pump between petroleum gasoline and gasoline containing increasing amounts of ethanol.

Shaw compares his views to former President George W. Bush, who signed the renewable fuel standard into law.

Bush was “without a doubt the strongest supporter we’ve had, and that caught some people off-guard, because obviously he was from Texas. But he got it. And that didn’t mean he didn’t like oil, and that’s kind of where I’m at,” Shaw said. “There’s a role for other alternatives, particularly if they’re domestic and cheaper, not to mention cleaner.”

But the Iowa ethanol industry feels betrayed by President Obama. The president campaigned in Iowa on a pro-biofuels stance, but last fall, his administration rolled out a proposal that calls for the first-ever rollback in the amount of ethanol that must be blended into gasoline.

The proposal caught the industry off-guard; ethanol producers had been expecting attacks on the industry to come from Congress and did not push as hard to shore up support within the administration. The Iowa industry felt like “a knife was stabbed in their back,” Shaw said.

Iowa’s entire congressional delegation has rallied around the ethanol industry since the release of the proposal, crossing the partisan divide to send letters to EPA.

Shaw likes that ethanol is an issue that crosses the partisan divide. He says there are too many “bumper sticker” lawmakers in Congress who are “good about yelling and pounding at the table” and don’t know when to negotiate with the other side.

He says he wants to be a “common-sense” conservative. And he wants to emulate Grassley, who has rarely missed a Senate vote.

“I’m under no illusion that Monte Shaw is going to paint a red S on his chest and go out there and singlehandledly solve everything,” he said, “But you know what I hope? I really hope there’s other people like me who care about the future of their children who look at the path we’re on now and say this is a scary path.”

Shaw’s big challenge between now and June will be increasing his name recognition in the district, Robinson said.

“Shaw proved beyond a shadow of a doubt that he’s a candidate to take very seriously in the Republican 3rd District primary,” Robinson said. “Shaw might not be as well-known as Zaun or Schultz, but the substance he offers and his knowledge of campaigns and politics make him a formidable candidate.”