Skip to comments.Cruz victory threatens ethanol's power
Posted on 02/03/2016 5:29:35 AM PST by thackney
Ted Cruz's victory in the Iowa caucuses is casting doubt on the political potency of ethanol, an issue that had long reigned supreme in the Hawkeye State.
Before Monday, every winner of the caucuses in both parties had supported the Renewable Fuel Standard (RFS). Opposing the mandate, it was long thought, would be political suicide in the state, which leads the country in the production of ethanol.
But Cruz defied the trend, triumphing over the Republican field despite his support for phasing out the standard, which defines how much renewable fuel must be blended into traditional fossil fuels. It's an outcome that many in Iowa tried to stop.
The state's popular Republican governor, Terry Branstad, repeatedly warned that supporting Cruz would be a "big mistake for Iowa." Asked directly whether he wanted Cruz to lose, Branstad replied, "Yes."
But Branstad's opposition did little two sway caucusgoers. Cruz finished with more than 27 percent of the vote on Monday, beating Donald Trump by 3 percentage points. Trump had attacked Cruz's position on ethanol and promised voters he would keep the mandate in place.
Cruz's victory, ethanol opponents say, could alter the conventional wisdom about the fuel's currency as an electoral issue in the Midwest, which produces most of the agricultural products such as corn that become ethanol.
"After last night, we can say that the corn lobby has really now suffered pretty much the biggest defeat that it ever has in history, and possibly the most resounding defeat that we're going to see for years going forward," said Liz Mair, a Republican strategist.
"At the end of the day, it's been pretty decisively shown that it is not necessary to support ethanol subsidies, whether in the form of mandates or otherwise, in order to win in Iowa."
Anti-ethanol forces, a coalition led by gasoline refiners, food groups, many free-market Republicans and some Democrats, were claiming victory on ethanol before the caucuses even began.
The Des Moines Register poll released Saturday night showed Branstad's opposition to Cruz didn't matter to 77 percent of GOP voters in the state. The poll followed an industry-funded survey last month showing most Iowans don't rank the ethanol mandate among their top three issue, and half of the voters there said they don't care much or at all about the RFS.
"I think a clear message coming out of Iowa is that whatever political influence ethanol used to have in the state, those days are now over," said George David Banks, the vice president of the American Council for Capital Formation, which launched an anti-ethanol ad campaign worth at least $1 million in the state in January.
Bob Shrum, a Democratic strategist, said the true test of ethanol's importance came when Branstad lashed out at Cruz.
"He obviously assumed that the ethanol mandate was a silver bullet," Shrum said. "Instead, what the results suggest, and what Ted Cruz ... has proved is that this is no longer a third rail in Iowa politics."
Ethanol backers, however, say the meaning of the caucus results are being overhyped into a "false victory" for "Big Oil."
While Cruz won the caucuses, he received only 27 percent of the vote on the GOP side. More than 80 percent of Iowa caucusgoers in both parties chose candidates who support the ethanol mandate, they noted.
"The facts are over 80 percent of the votes cast yesterday in Iowa were cast for candidates that are in favor of the RFS -- some in favor of the status quo, some in favor of it through 2022 and even some who want to expand it," said Tom Buis, the co-chairman of Growth Energy. "Those numbers are significant. Those are facts that can't be disputed."
Cruz also made a slight shift in his position on ethanol as the campaign progressed. He now says he wants to phase out the mandate over time but had co-sponsored legislation a few years ago that would have ended it immediately.
"This was not about Ted Cruz, and it was never about Ted Cruz. It was about moving everyone -- and also, Ted Cruz moved," said Eric Branstad, the state director of pro-ethanol group America's Renewable Future and Terry Branstad's son.
"Big Oil is going to claim a false victory today, but I really believe that that rings hollow," he added. "We've moved, especially Sen. Cruz, in a positive direction. He has moved closer to us with his new plan on ethanol, and moved further from oil."
The Iowa caucuses are not the end-all of ethanol politics.
Several lawmakers -- both Republicans and Democrats -- are pushing measures to end the federal ethanol mandate, including as amendments to the energy bill on the Senate floor this week.
With Iowa a likely swing state in November's general election, nominees of both parties will have to revisit the issue again this fall.
Ethanol backers said that bodes well for them.
"Looking toward November, if Ted Cruz is the nominee -- and I hope he is -- looking at these pro-RFS numbers I am happy to put Iowa in the Democratic column," said Paul Tewes, a Democratic operative who heads the Smoot Tewes Group.
"The RFS is a unique issue in rural America, and if the Democrat is for the RFS and the Republican is not, thank you, and we'll take Iowa."
‘Cruz victory threatens ethanol’s power’
They say that like it’s a bad thing. Let ethanol stand without govt crutches, if it can.
I, for one, want ethanol OUT of my gasoline. It damages engines. To protect them, you have to buy additives, which adds to the price of fuel.
Once an industry or state gets on federal welfare, it’s like breaking a heroin habit. Ethanol dirties the environment, damages engines and has no benefit except buying votes for politicians.
I don't see it so much as a victory for "Big Oil" as a victory for small engines.
If the market wants ethanol, there will be a market for ethanol. The mandate is as damaging and unnecessary as the agency to oversee it.
Ethanol from corn for gasoline is stupid.
Ethanol has killed more small engines that Cash for Clunkers.
“This was not about Ted Cruz, and it was never about Ted Cruz. It was about moving everyone — and also, Ted Cruz moved,” said Eric Branstad, the state director of pro-ethanol group America’s Renewable Future and Terry Branstad’s son. “
Stick it up your crony, Eric.
Correct. Cruz isn’t threatening ethanol. He is threatening ethanol subsidies...ALL subsidies on energy, in fact. Let the free market decide what is best. Open things up so vehicles that use e-25, etc. can be made or imported to the USA. The corn farmers who depend on Gubmint subsidies will be glad that Cruz is president. They’ll be able to increase their business by quite a lot.
I am a Trump supporter, but I salute Cruz for taking his principled stand
Ethanol can still thrive. . . . In the private sector and not on the backs of the taxpayer.
Hog and beef farmers will be thankful for less expensive feed. It may be the deciding factor in saving their farm.
If the only thing Cruz ever accomplishes is the ultimate death of the Ethanol Teat Suckers, his candidacy will have been well worthwhile.
Last time I checked Cruz won’t have a line-item veto.
Ain’t enough votes in Congress to repeal Obamacare or impeach Obama. But overriding a Cruz veto on ethanol....that they can get done.
Let’s not forget, 10% ethanol in your gasoline results in a 10% reduction in fuel mileage. We’re still burning the same amount of petroleum, just subsidizing the ethanol industry and corn growers. Welfare, by another name.
I wonder who are the big ethanol investors?
It should threaten Iowa’s first in the nation status as well. We cannot afford to be blackmailed by the ethanol lobby every four years.
As it should.
That stuff is ruinous to fuel systems and engines and is completely unnecessary.
I wonder if Trump would have won Iowa if he had come out against it?
Seemed like the natural position for him to take, but he didn’t.
“I wonder who are the big ethanol investors?”
These are just a few makers.
The other big beneficiaries are the corn famers who are mostly large-scale commercial enterprises, not your mom and pop farmers.
“He is backed by big oil,”
He is backed by free enterprise Americans like me.
Exactly who is the ‘big oil’ you are referring to?
Do you even realize that the proverbial ‘Seven Sisters’ of old literature has been whittled down to a paltry 4 now? These 4 control a minority of the petroleum activity in this country or elsewhere.
‘Big Oil’ hearkens back to a time prior to OPEC. It is no longer. The only ‘big oil’ around anymore is the oil-producing countries of the world, not oil companies, who practice monopolistic practices to manipulate world supply and oil price.
And OPEC thank God is getting throttled badly as it has lost control of the market due to the innovation of oil companies, including big oil companies, that produce the oil and gas we use in this country.
Your anger is misplaced, friend.
“Hog and beef farmers will be thankful for less expensive feed. It may be the deciding factor in saving their farm.”
Food prices, especially staples like bacon, rib-eyes and corn whiskey should go down as the use of corn ethanol declines.
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