February 5, 2016
Despite his opposition to the federal Renewable Fuel Standard (RFS), Ted Cruz won the 2016 Iowa Caucus on the Republican side in the statewide vote February 1. Thus, Iowa began the process of winnowing the field of candidates to elect a new president of the United States. Cruz, a U.S. Senator from Texas, finished first among the 11 Republican candidates seeking their party’s nomination. As the nation’s top producer of corn and ethanol made from corn, Iowa is the first state to hold a vote every four years to start the primary election process.
CORN AND ETHANOL: Close to half of the corn grown in Iowa goes into ethanol production. The federal Renewable Fuel Standard requires a certain amount of ethanol and other biofuels to be used in the nation’s fuel supply each year, aimed at reducing U.S. dependence on foreign oil.
Hillary Clinton won in Iowa for the Democrats, who have a total of three candidates seeking their party’s nomination to compete in the general election in November. All candidates, Republican and Democrat, who are still in the race and haven’t dropped out after the Iowa caucus, are moving on to compete in primary elections in other states in coming months. The New Hampshire primary is next on the list.
Will Cruz’s win dim ethanol and biodiesel prospects?
The win by Cruz in Iowa has prompted concern among some supporters of renewable fuels that the biofuel industry’s influence among presidential candidates may be losing ground. Several farmers who are ethanol and biodiesel supporters were interviewed by Wallaces Farmer at this week’s Iowa Power Farming Show in Des Moines.
“We need the RFS,” says Gordon Wassenaar, a Prairie City farmer active in the Iowa Corn Growers Association. “It’s a law passed by Congress in 2007 which sets the minimum amount of ethanol and biodiesel that must be blended into the nation’s fuel supply each year. The oil industry controls access to the fuel market, and they don’t want to give up any more market share to renewable fuels. The petroleum industry has already lost 10% of its market nationwide to ethanol, as ethanol is blended in gasoline as an E10 blend. Big Oil will continue to fight against the RFS and will continue to spend millions of dollars lobbying, trying to kill the RFS by getting legislation passed.”
The oil industry also contributes money to the campaign of presidential candidate Cruz, who has supported legislation in Congress that sought to end the RFS.
Don’t believe oil industry’s spin on caucus results in Iowa
News reports, interviewing oil industry leaders this week, say Cruz’s victory in the nation’s biggest corn producing state could be a major blow to ethanol. “The oil industry is trying to spin the results of the Iowa caucuses to convince the public that whatever political influence ethanol used to have in the state of Iowa is now waning. However, just the opposite is true,” says Monte Shaw, executive director of the Iowa Renewable Fuels Association.
“The fact is, 83% of the voters who participated in the Iowa caucus on Monday night voted for a pro-RFS candidate. That is certainly not a setback for the RFS, despite what the oil industry spokesmen and their lobbyists claim,” says Shaw. “Even more telling, and the oil industry doesn’t like people to know this fact, is that the pro-ethanol candidates gained 5% more of the vote in the 2016 Iowa caucus statewide than they did four years ago in the 2012 Iowa caucus.”
Shaw adds, “Of course the oil industry wants you to think there is waning support for ethanol and the RFS. But wait a minute. The fact is when you tally up the votes you see that we actually have a stronger pro-RFS vote in 2016. The only candidate who did well in Iowa who did not adopt a pro-RFS position was Sen. Cruz. He did spend some time during the campaign in Iowa moving his position on ethanol more toward our direction, and moving away from the oil industry and its defense of the oil subsidies the federal government provides.”
In Iowa, ground was gained for RFS in 2016 presidential race
“The real story here is that the oil industry, with Cruz as their No. 1 supporter in this presidential race in the Iowa caucus, moved away from Big Oil a little bit and moved more toward supporting the ethanol industry,” says Shaw. “Yet Big Oil wants to claim the Iowa caucus results are a victory for the petroleum industry.”
Two weeks prior to the Feb. 1 caucuses, Iowa Gov. Terry Branstad, a Republican, said at a press conference Iowans would be making a mistake in supporting Cruz for president, considering Cruz’s record in the Senate of not supporting the RFS. The governor said he would like to see Cruz defeated in Iowa. Cruz went on to win the Republican caucus. Now the oil industry, some political analysts and media reports are saying ethanol is unlikely to gain traction as an issue among the many other issues in primary states such as New Hampshire, Nevada, South Carolina etc.
Signs indicate ethanol and RFS are still an important issue
National ethanol trade groups, including America’s Renewable Future led by Eric Branstad, the governor’s son, dismissed claims that the relevance of biofuel has diminished politically in Iowa or other swing states. He believes ethanol and the RFS will be key topics for voters in November, citing ethanol’s role in creating jobs and lowering U.S. dependence on foreign oil. “Whoever is the eventual nominee for U.S. president, when they come to Iowa, or another swing state, this is going to be a big, decisive issue for voters to consider,” says Eric Branstad.
He adds, “In the Iowa caucuses we saw an overwhelming majority of Iowans vote for pro-ethanol, pro-RFS candidates. An impressive 83% of the voters supported candidates who recognized that the RFS is crucial to over 852,000 American jobs, to our lowered dependence on foreign oil, and to give consumers choice at the pump for a clean, less expensive fuel.”
Cruz says if elected he would repeal oil industry subsidies
Both Monte Shaw and Eric Branstad point out that Big Oil is claiming a false victory as a result of the Iowa caucus. The fact is the oil industry’s No. 1 candidate, Ted Cruz, has moved closer to ethanol and further away from oil. Cruz has even said he is committed to repealing subsidies for the oil industry. “Those are unmistakable signs that the relevancy and importance of ethanol are dominant,” says Eric Branstad. “Still, we need to keep up the pressure on Sen. Cruz and all presidential candidates to support the RFS and renewable fuels.”
Cruz in recent weeks said, if elected president, he wants to eliminate all energy subsidies and government support for energy industries. That includes eliminating the RFS for ethanol and other biofuels and eliminating oil subsidies which the oil industry has received for more than a century. “By the end of his caucus campaign in Iowa, Sen. Cruz was saying he would eliminate or limit the tax breaks and subsidies the oil industry enjoys,” says Shaw. “He will have the chance to do that and vote that way in the Senate pretty soon, as Congress is currently considering the energy bill.”
Be cautious about reading too much into Iowa win by Cruz
Remember, when looking at results of the Republican Iowa caucus vote, Cruz won with 27.7% of the vote and Rand Paul got 4.5%, says Shaw. They were the only two Republican candidates running who were against the RFS. The rest of the Republican candidates supported the RFS. Thus, 67.8% of Republican voters supported candidates who support the RFS. “The point is, the results of the 2016 Iowa caucus are certainly not a mandate against the RFS,” says Shaw.
U.S. Sen. Chuck Grassley, an Iowa Republican and a farmer, cautions against reading too much into this one victory by Cruz. “We’re only through one state so far in the primary election process,” Grassley told reporters in a teleconference after the Iowa Caucus votes were counted. “I wouldn’t draw too many conclusions about ethanol based on results of the 2016 Iowa caucuses.”
Ethanol and RFS are relevant to voters nationally, too
Eric Branstad sums up: “We in the renewable fuel industry are proud of the work we’ve done on educating candidates on the benefits of the RFS and we’re proud that most of the candidates ended up with a ‘good’ rating on this issue, or they moved up into the ‘good’ category. When we started this caucus process a year ago, only two Republican candidates were known supporters of the RFS and we ended with nine out of 11 of them in the pro column and 12 candidates out of the 14 total, Republican and Democrat, in the pro column. We’re proud of the success we’ve had getting candidates to recognize the benefits of biofuels and the RFS to our economy, national security and environment. These will be key issues in the general election for president in November.”
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