Ethanol explosive for Cruz, Paul

Sens. Ted Cruz (Texas) and Rand Paul (Ky.) are trying to avoid an ethanol landmine in Iowa.

Both Republican senators have criticized federal subsidies for ethanol, which are popular in Iowa, the state hosting the first Republican contest in the 2016 race for the White House.

ADVERTISEMENT
Iowa kingmakers in the party such as Sen. Chuck Grassley want the Republican presidential nominee in 2016 to champion ethanol.

That’s a problem for Cruz and to a lesser extent for Paul, who are both crisscrossing the state this week in advance of possible campaigns for the presidency.

Cruz has introduced legislation that would repeal the renewable fuel standard over the next five years. The standard mandates that gasoline contain 10 percent ethanol by volume.

“I believe we should pursue an all-of-the-above energy policy and that Washington shouldn’t be picking winners and losers,” he said.

Cruz argues the fuel standard has proven unworkable and costly, according to a summary of his bill.

He says it ignores the problem of an insufficient supply of biofuels to meet the standard.

Paul claims that bureaucratic regulations and corporate subsides have distorted the marketplace and actually made it tougher for energy developers to market new forms of clean energy.

“We should be talking about energy freedom, new technologies, and discoveries. Instead the debate in Washington continues to be about how much we should subsidize solar or ethanol, and whether we should prohibit nuclear energy or coal,” Paul writes on his Senate website. “We should shift the debate and cut the red tape.”

In 2011, Paul voted along with 72 other senators to repeal the Volumetric Ethanol Excise Tax Credit. Iowa’s two senators, Grassley and Tom Harkin (D), voted against the repeal. Cruz was not in the Senate at the time.

“Ethanol and bio renewables are a very important economic and jobs issue in Iowa. There is no question that these will produce serious questions for Cruz, Paul and also [Texas] Gov. Rick Perry,” said Steffen Schmidt, a political science professor at Iowa State University.

Schmidt said all three are haunted by their ties to Texas, home of the nation’s oil industry, which wants to eliminate the renewable fuel standard.

“This represents the ‘Texas Curse’ for all three in 2016. Rand Paul is basically Texan since his father was the prominent Paul for so many years,” Schmidt added, referring to Rand Paul’s father, former Rep. Ron Paul (R-Texas). Rand Paul grew up in Texas.

In an interview, Grassley said he wants the 2016 GOP standard bearer to be a champion for ethanol. He added that the renewable fuel standard should not end until the nation has built more infrastructure for ethanol.

“We won’t phase out that mandate until we know that we’ve got E-85 pumps at more stations,” Grassley said, referring to stations that sell a blend of 85 percent ethanol and 15 percent gasoline. “If you phase out that mandate now, you’re never going to get that infrastructure built up.

“Ethanol’s still a big issue,” he said.

Cruz attended two events Saturday with Bruce Rastetter, a power broker in Iowa Republican politics and the co-founder of Hawkeye Energy Holdings, one of the nation’s largest ethanol producers, according to The Des Moines Register. He will return to the state this weekend for the Family Leadership Summit.

Sen. Marco Rubio (R-Fla.), another potential 2016 presidential hopeful who voted to end the ethanol tax credit in 2011, also attended the events.

Paul kicked off a three-day campaign-style swing through Iowa on Monday, in Council Bluffs.

Monte Shaw, executive director of the Iowa Renewable Fuels Association, who waged an unsuccessful bid for Congress as a Republican earlier this year, noted three of the top four finishers of the 2012 Iowa GOP caucus all supported the renewable fuel standard (RFS).

“Rick Santorum was a very strong, very aggressive supporter of the RFS,” he said. “[Mitt] Romney was as well and Newt Gingrich was.

“The only person who finished in the top four who wasn’t was Ron Paul and he’s a special case,” he added. “Perry and [Rep.] Michele Bachmann [(R-Minn.)] did not do very well in Iowa and they were the two that opposed it.”

Shaw said 10,000 Iowan households are directly employed by or invested in ethanol biodiesel plants and that about 100,000 Iowans are involved in agriculture.

Ethanol subsidies have been a headache for Republican presidential candidates.

Sen. John McCain (R-Ariz.), who has been a longtime opponent of ethanol subsidies, won the GOP presidential nomination in 2008. But he finished fourth in the Iowa Republican caucus, right ahead of Ron Paul.

Later in the year, McCain shifted his position as his race against then-Sen. Barack Obama (D-Ill.) entered the final stretch.

At a rally at the University of Northern Iowa in October of that year, McCain pledged as president to “invest in all energy alternatives: nuclear, wind, tide, solar, ethanol, biofuels.” Obama won the state handily, and McCain subsequently labeled ethanol “a joke.”

It remains unclear how ethanol politics will play in 2016.

VoteVets.org, a veterans advocacy group, hit Cruz with a full-page ad in The Des Moines Register when he visited in March, scrutinizing his position on ethanol.

“Senator Cruz, as military veterans, we have one question for you: Do you want to import more oil from dangerous parts of the world, or produce more clean, homegrown American biofuel?” the ad stated.

But some Iowa conservatives say ethanol won’t have as much of an impact in 2016 as it did in prior elections.

“Will it be an issue in 2016? It could be, but it’s not necessarily the deal breaker that it was,” said Craig Robinson, the editor-in-chief of The Iowa Republican, an influential conservative website. “It’s a liability if they don’t know how to handle it. It’s a liability if you don’t understand the RFS is more about market access.”

Shaw said voters won’t hold grudges over the positions Cruz and Paul took on ethanol while representing Texas and Kentucky in the Senate as long as they appear open-minded on the issue.

“We hope they come up, talk to us and maybe come to a different conclusion or at least a slightly different conclusion than when they were running for other offices,” he said.