If politicians no longer coveted that early “Iowa bump,” would they still feel compelled to support ethanol subsidies?
In the wake of Iowa’s caucus vote-counting disaster, political staffers and pollsters alike are reconsidering the state’s “first in the nation to vote” status. The quaint caucuses and infamous fry-forward state fair could disappear were Iowa to be dethroned. But so too could one of Iowa’s largest industries, which has managed to carve out an outsize role in debates over renewable energy: ethanol.
For decades, ethanol has been a true litmus test in the Hawkeye State. An entire episode of the early 2000s TV show The West Wing was devoted to it: “It takes more oil to transport it and fertilize it than we save using it,” the show’s Democratic presidential candidate says of the biofuel. Asked if he’s considering reversing his pledge to back ethanol, he responds: “Don’t worry, I’m not suicidal.”
Drive several miles in any direction in Iowa and it won’t take you long to find yourself among corn. Rows and rows of buttery-hued heads mounted on dark green stalks line many roadways. Corn is Iowa’s biggest crop, and roughly 40 percent of it goes toward making ethanol—a biofuel that’s mixed with gasoline to power engines such as those in cars. The ethanol industry pumps $5 billion into Iowa’s economy, and the state’s 43 plants help support more than 40,000 jobs.
Today, candidates seeking the coveted election “bump” from winning Iowa’s caucuses know their position on ethanol could be crucial. This cycle at least nine presidential candidates, including President Trump, visited Iowa ethanol factories for chitchat and photo ops. Minnesota Senator and Democratic hopeful Amy Klobuchar visited an Iowa ethanol plant last April, donning a lime-green construction hat. Senator Elizabeth Warren of Massachusetts visited one in June, her hat white.
Policy positions seem to shift accordingly. Bernie Sanders, who in 2011 voted to end ethanol subsidies, citing “a negative impact on farmers and consumers,” changed his tune at a fish fry in Iowa this past November. “Biofuels and other sustainable energy is exactly the direction we have got to go,” he said.
“I think everyone assumes that to win Iowa, you have to be insanely pro-ethanol,” said Grant Woodard, a lawyer and former Democratic campaign operative in Iowa. “It’s sort of that, ‘What comes first, the chicken or the egg?’ question in that, do people feel like they have to support [ethanol] because that’s what they feel, or do they all have political ambitions?” Although Texas Senator Ted Cruz rejected ethanol and won the Iowa caucuses anyway in 2016, candidates this year didn’t appear to want to take the gamble.
If Iowa loses its status as the first state to vote, it could give presidential candidates and other politicians a reprieve on the issue of ethanol—at least initially.
“Ethanol had an outsized importance because of Iowa. And Iowa had an outsized importance because it was first. And the ethanol industry was very smart to exploit that timing and profile…. There was no middle ground,” said Stephen Brown, an energy consultant at RBJ strategies. “I think having the Iowa Caucus disappear, it will certainly cause a little bit more room to exist for candidates to take a more rational approach to biofuels.”
The Renewable Fuel Association and the Advanced Biofuels Association, both pro-ethanol lobbying groups, declined to comment for this story.
The issue of ethanol is a complex one. In the early 2000s, growing corn and other crops to create ethanol—a greener alternative to fossil fuels—was seen as an ingenious way both to bolster farmers in the Midwest and to increase America’s energy independence, reducing the reliance on foreign oil and gas. To regulate the system, in 2005 Congress established the Renewable Fuel Standard, which mandates that certain amounts of gas be supplemented by biofuels. Under the current law, refiners will have to blend 36 billion gallons of renewable fuels into gas by 2022. The program also allows for a waiver for certain refineries capable of showing that implementing the program severely affects their bottom line. The industry has for years relied on billions in government subsidies and tax breaks.
Today, support for ethanol can be a tricky matter for politicians on both sides of the aisle and not just those seeking a presidential nomination. For GOP members who favor increased fossil fuel production and the spread of cheap natural gas, ethanol is considered an economic drain and an unfairly advantaged competitor due to the subsidies it gets. The Trump administration has had to walk the ethanol tightrope. Last year it allowed the year-round use of an increased percentage of ethanol mixed in gasoline known as E-15—to the chagrin of the fossil fuel industry. The administration also promised to offer more RFS waivers to small refineries—to the displeasure of the ethanol camp.
For Democrats who are promoting their environmentalist roots, ethanol is similarly fraught. Many green groups have largely turned away from supporting the biofuel, arguing electric cars are a better option than traditional ones with ethanol supplementation. “Ethanol and other biofuels have been a huge disappointment [in terms of] their environmental performance and success in reducing climate change,” said Rose Garr, senior director of Mighty Earth, a nonprofit environmental group that opposes biofuels.
A Department of Agriculture study published in March 2019 found that the lifecycle emissions from burning corn-based ethanol were 39 to 43 percent lower than for traditional gasoline. But Garr and her group argue that government agencies do not often take into account the emissions added by land clearing—a necessary component of readying fields to grow corn for ethanol. When these are included, she said, emission reductions are more negligible. Garr said presidential hopefuls who support ethanol while boasting of their climate action plans come off as disingenuous: “It’s a conundrum. You can be a champion on climate change or a champion on ethanol … but you can’t be both.”
Whether Iowa losing its stature could allow candidates a new level of flexibility when developing their policies on ethanol depends on which state takes Iowa’s place, political strategists say. If it’s still a state in the corn belt, such as Illinois, Indiana, Minnesota or Nebraska, then ethanol will likely remain a main discussion point.
“A lot of places grow corn. Any state that has a fairly large agricultural base, that especially in this base grows corn, you would see some discussion [on ethanol],” said Chad Hart, an agricultural economist at Iowa State University, in Ames.
Even if the first state isn’t in the corn belt or even in the Midwest, that doesn’t mean candidates won’t face a divisive, state-focused litmus test. Any state that goes first is likely to have its own economic driver that will take predominance. “It might be fracking in South Dakota,” suggested Democratic strategist Joe Trippi, who guided Walter Mondale’s and Howard Dean’s campaigns in Iowa. “It’s very similar to the kind of situation that ethanol creates.… The fracking industry would love to see one of the Dakotas go first and try to get every candidate to lay down their policy.”
