Trump risks support in oil-producing swing states as he boosts ethanol to court Iowa farm vote

Source: By Avvy Smith, Washington Examiner • Posted: Sunday, September 27, 2020

President Trump has boosted biofuels in recent weeks in moves that have boosted corn growers but that the oil industry sees as a slap in the face.

The industry wants Trump to remember he has swing states other than Iowa to worry about — fossil fuel states where refining jobs are prevalent. Several of those states were much closer races in 2016 than Iowa.

Something politicians “should keep in mind as they consider where to come down on the RFS and the implications of it is not just to focus solely on Iowa,” said Frank Macchiarola, senior vice president of policy, economics, and regulatory affairs for the American Petroleum Institute.

“There are oil and gas jobs in Pennsylvania, Michigan, and Ohio that rely on a policy that will not restrict oil and gas development or refining, and those are good-paying jobs,” he added.

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Nonetheless, recent polling shows Trump and Democratic nominee Joe Biden dead even in Iowa, and Trump seems to be dusting off his 2016 playbook. Trump made grand promises to boost corn ethanol in the last presidential race, and he won Iowa with 51% of the vote, sweeping most of its rural counties.

In the last few weeks, Trump has made announcements to boost biofuels, including the sale of higher-blend ethanol known as E15. His administration rejected dozens of waivers from small oil refiners seeking exemptions from the Renewable Fuel Standard, known colloquially as the RFS.

Oil-state Republican lawmakers, such as Wyoming Sens. John Barrasso and Mike Enzi and Pennsylvania Sen. Pat Toomey, slammed the Environmental Protection Agency for rejecting the waivers, which they saw as a lifeline for small refineries in their states.

“The refining industry for the past 15 years has lived under mandates, and they’ve just been too high,” said Derrick Morgan, senior vice president of federal and regulatory affairs for the American Fuel and Petrochemical Manufacturers.

“The small refinery exemptions were a way to reduce those mandates and the cost of overall compliance, without reducing the ethanol blend rates. Now, they need to do that directly,” Morgan added. “They need to right-size it, especially in light of the fact that COVID has reduced overall gasoline demand.”

The big question, however, is whether rancor over the biofuels mandate would actually push oil industry workers not to vote for Trump. They have many more reasons not to want to vote for Biden, whose aggressive climate plan would bar new oil and gas leasing on federal lands, target a carbon-free power sector by 2035, and quickly ramp up electric cars.

Trump seems to be making that calculation, and for now, his campaign seems more worried about losing votes in Iowa.

The Biden campaign has been increasingly trying to capitalize on the seeds of distrust in Trump among farmers planted by years of back-and-forth over the RFS requirements.

“Lip service 50 days before an election won’t make up for nearly four years of retroactive damage that’s decimated our trade economy and forced ethanol plants to shutter,” Biden said in a campaign statement Sept. 15. A Biden administration would keep its promises to farmers “by ushering in a new era of biofuels,” the former vice president added.

The Biden campaign has a team of well-known surrogates, including former Iowa Gov. and Obama-era Agriculture Secretary Tom Vilsack and former Iowa Lt. Gov. Patty Judge, on the ground in Iowa hammering that argument home, accusing Trump of empty promises on ethanol.

There’s another reason why Trump and Republicans are focused on Iowa: Sen. Joni Ernst is up for reelection in one of the toughest races in the country. Toomey, meanwhile, doesn’t face reelection until 2022.

Each time Trump boosts ethanol, it gives Ernst, who has never been afraid to battle her own party on the RFS, another win to tout to Iowans. For example, just a few weeks ago, Ernst confronted Trump publicly in Iowa over the small refinery exemptions, securing a promise from Trump to intervene personally, ultimately leading to the EPA’s rejection of more than 50 waivers.

Those on the ground in Iowa suggest there are rural votes in the state that could be up for grabs.

“There were clearly some farmers and rural folks that kind of wanted to vote for Trump — they typically would not even hesitate voting for the Republican — who were, and I cannot emphasize, bold, italics, underline, emphasize this word enough, deeply frustrated with Trump and his handling of renewable fuels,” said Monte Shaw, executive director of the Iowa Renewable Fuels Association, describing conversations he’s had with farmers and others in rural Iowa in recent weeks.

For some of those rural voters, Trump’s recent boost for ethanol put him back in their good graces, Shaw said. Others, though, still wonder if there’s “another shoe to drop” in the form of backing for the oil industry, he added.

However, if Trump doesn’t take steps to help oil refiners, he could deepen distrust over biofuels issues among the oil industry, which sees the RFS obligations and the pandemic-induced demand decline as a double whammy, especially for smaller facilities.

Ethanol isn’t even a top voting issue for Iowans, Macchiarola said. He pointed to recent Des Moines Register polling, showing 0% of voters said ethanol was their top voting issue.

Refining industry officials also say biofuels producers should be more clear-eyed about Biden’s climate plans, especially on electric cars.

“It’s gasoline and ethanol together that provide fuel, and we want to be able to continue to sell fuel for people that want to buy it,” Morgan said. “If there’s a possibility that with a clean sweep, a piece of the Green New Deal gets enacted, then we won’t have that opportunity, of course.”

Climate change, though, could also sway rural votes in the other direction. Wayne Moyer, a professor at Grinnell College in Iowa, said he attended Democratic caucus events earlier in the year where farmers were independently raising climate change. He pointed to intense flooding in the Midwest last year.

“Whether that will be something that decides their vote or not, I don’t know, but I think they’re clearly much more worried than they used to be,” Moyer added.