Iowa Gov. Terry E. Branstad says Republicans who support shutting down the federal Renewable Fuel Standard, which provides a major market for Midwestern corn farmers, could be kissing their White House hopes goodbye.
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.
Despite Mr. Branstad’s warning, supporting the RFS is not a political slam-dunk, according to GOP polling from the 2014 Iowa Senate race, which showed that Iowans are skeptical of federal government mandates.
The poll found that nearly three-quarters of likely voters did not want renewable energy companies to become too reliant on the federal government, and that nearly half opposed the federal government requiring the use of a particular kind of fuel even if the production of that fuel provided a boost to Iowa farmers.
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.
Ethanol-blended gasoline can cause problems for small-engine equipment such as lawn mowers and chain saws. It also is less efficient as a fuel, meaning it takes more to get the same combustible power. Some analysts say that mitigates the environmental benefits of the fuel standard.
Opponents say the costs of the standard are passed on to consumers in the forms of higher food and gas prices.
“There’s definitely pressure in Iowa to support the RFS, but I think people are recognizing that their political survival doesn’t hinge on their support of it,” said Chris Warren, a spokesman for the American Energy Alliance, which opposes the law. “None of this happens in a vacuum. Supporting the RFS could have repercussions down the road in areas that may not be as supportive of this costly mandate.”
But in Iowa, which ranks first in the nation in corn and soybean production, ethanol remains king.
Mr. Branstad said Republicans should run with the issue and use it against President Obama, who the governor said has been indecisive on ethanol targets.
“He has basically turned his back on us and thrown in with Big Oil,” Mr. Branstad said of Mr. Obama. “I think Republicans have a great opportunity here in the agricultural heartland of the Midwest.”
The governor said Republican presidential candidates who want to roll back or eliminate the fuel standard will be in trouble.
He said he is interested to learn the positions of likely presidential hopefuls, including Gov. Scott Walker of Wisconsin and former Gov. Jeb Bush of Florida, who is making his first trip to Iowa since announcing in December that he would be exploring a bid.
A representative for Mr. Bush did not respond to requests for comment, and Kirsten Kukowski, a spokeswoman for Mr. Walker’s political action committee, Our American Revival, said the governor looks forward to addressing the issue at the summit.
Mr. Branstad’s son, Eric, a Republican political strategist, and Derek Eadon, a Democratic strategist who served as state director of President Obama’s 2012 re-election campaign, are leading a multimillion-dollar campaign called “America’s Renewable Future,” which is a sponsor of the agricultural summit.
“Our efforts with ARF this caucus season are unprecedented and will indeed be the biggest that Iowa has seen to date.” said Majda Sarkic, a spokeswoman for the group. “We are operating with a multimillion-dollar budget and are running a full-scale campaign, akin to a presidential campaign, but with the RFS as our candidate.”
Advocates have found an ally in Former Sen. Rick Santorum of Pennsylvania.
“It is important for our country to have competition in the marketplace,” Mr. Santorum said in January at the Iowa renewable fuels summit. “When you have a vertically integrated oil industry, it is important that we make sure that other types of competitive products are allowed into that stream. And that is what the [Renewable Fuel Standard] is there to do.”