|
 That rule of politics collapsed resoundingly in the 2012 campaign
when five of the six top Republican candidates said it was time for
such intervention in the private market to end.
Now, Iowa's senior political leaders are pondering how to shore up
political support for the corn-based fuel at a time when its
economic and environmental benefits are under attack .
The latest blow came this month, when the Obama administration
proposed cutting the required amount of ethanol in the nation's fuel
supply for the first time since Congress established a standard in
2007.
The state's leading Republicans and Democrats hope they can still
use Iowa's political importance as a swing-voting state and as the
site of the first presidential nominating contest to get candidates
to support keeping the requirement, or at least part of it, in
place.
But the case has become a tough sell for Republicans as the party
has moved to the right and become increasingly hostile to government
programs and directives.
Even among Democrats, concern has grown about ethanol's role in
rising food prices and in cultivation of land that had been used for
conservation.
The recent boom in domestic oil production has also made ethanol
less prized as a U.S.-produced fuel that limits dependence on
foreign oil. The grain alcohol burns cleaner than gasoline but
produces less energy.
"I think there are some that feel it's potentially safer now to be
lukewarm at least, or not supportive of it," said Iowa's Secretary
of Agriculture Bill Northey, a Republican. "I think it's yet to be
seen if that's a smart political position."
U.S. Sen. Charles Grassley of Iowa said he hopes to thwart the
administration's proposal in Congress if it survives the 60-day
comment period.
Meanwhile, Republican Gov. Terry Branstad planned to press his
fellow GOP governors, especially those with possible presidential
aspirations, to be mindful of the ethanol industry's economic
importance. He met with New Jersey Gov. Chris Christie at a
governors' association meeting in Arizona this week. On Tuesday,
Branstad launched a Website for people to leave comments for the
EPA.
For politicians eying the White House, "Whoever comes here better
understand the importance of renewable fuels, or they are going to
have hell to pay in rural Iowa," Branstad said in a recent
interview.
The federal government began actively supporting ethanol, which is
made by fermenting and distilling corn, about 40 years ago when
petroleum prices spiked and anti-air pollution efforts were ramping
up. Refineries initially were given a tax credit to produce the
grain alcohol and Congress later required oil companies to blend it
in their gasoline.
In Iowa, the nation's leading corn producer, about 45 percent of its
crop went into ethanol last year. The state has 42 ethanol plants
that produced 3.8 billion gallons.
Branstad said cutting the federal requirement would lower corn
prices that have already fallen this year because of an unexpectedly
robust harvest.
"They're making a huge mistake," Branstad said at the governors
conference this week. "And they're going to drive corn below the
cost of production."
Democratic U.S. Rep. Dave Loebsack of Iowa City said a loss of
federal support would be "a devastating decision for Iowa's farmers,
rural communities and economy."
[to top of second column] |
If the federal mandate was reduced or ended, ethanol producers would
rely on the handful of states with their own ethanol fuel standards,
and on exports which accounted for about 1 billion gallons last
year. The proposed change would likely hurt smaller producers more
than powerhouses like Archer Daniels Midland and Cargill.
Ethanol supporters insist the federal requirement is still justified
even though the U.S. reliance on foreign oil is dropping, and for
the first time in two decades, the U.S. produces more crude oil than
it imports.
"We use 10-percent of ethanol in the gasoline in our cars. Do you
want to import another 10 percent of oil" Grassley told the AP. "No,
you don't."
While oil companies are pushing to escape the ethanol mandate,
environmental groups are growing concerned about the impact of
increased corn production. Farmers planted 15 million more acres of
corn last year than a decade ago, according to an Associated Press
analysis, taking land out of conservation use and applying more
pesticides and herbicides.
Years ago, "there was a strong argument for encouraging the use of
available resources like corn, for ethanol. Those days have passed,"
Democratic Sen. Patrick Leahy of Vermont said in a statement.
In a sign of ethanol's eroding political support, the winner of the
2012 Iowa caucuses, Rick Santorum, called during his campaign for
phasing out the federal mandate.
The prospects for support in the possible 2016 presidential field
are uncertain. About a week ago, Branstad brought up ethanol support
privately with 2012 vice presidential nominee Paul Ryan before the
Wisconsin representative headlined a Branstad campaign fundraiser.
Ryan declined to comment publicly on the EPA's ethanol proposal. A
spokeswoman for Christie also declined to comment on Christie's
position. Among possible Democratic candidates, neither Clinton nor
Vice President Joe Biden has commented publicly about the issue
recently.
Some question whether the economic impact on Iowa would be as dire
as its political leaders suggest.
Only about 2,000 people work full time in the industry nationwide,
said Iowa State University economist Dave Swenson, adding,
"Worldwide demand for corn is still very strong."
[Associated
Press; THOMAS BEAUMONT]
Associated Press writer
Ken Thomas in Phoenix, Ariz., contributed to this story.
Copyright 2013 The Associated
Press. All rights reserved. This material may not be published,
broadcast, rewritten or redistributed.
 |
