You are here

Has big oil won the election?

Last week's Republican convention was disappointing to ethanol industry advocates, who have always been able to count on support from leading members of the party, including Senators John Thune of South Dakota and Chuck Grassley of Iowa.

In spite of such traditional support, the Republican convention adopted energy policy that has confused and disappointed ethanol supporters in the party, as well as leaders in the ethanol industry.

Tucked into the party platform's section on "Supporting our Agricultural Communities" was the sentence, "The U.S. government should end mandates for ethanol and let the free market work."

That drew criticism from several farm state leaders in the party, including Iowa Secretary of Agriculture Bill Northey, a farmer from Spirit Lake, Iowa.

Northey said that changes in the convention caused by Hurricane Gustav prevented public debate of the platform.

"Secretary Northey and other Republican leaders would have strongly opposed the plank's inclusion and remained committed to renewable fuels, including ethanol and biodiesel," his office said in a statement after the convention.

Northey later told Agriculture Online that he's not certain if that will cause Republican presidential candidate John McCain to lose votes among farmers.

McCain supports trade policies that encourage exports, Northey says. And "many farmers would probably prefer a McCain-led EPA."

Yet, McCain has made his opposition to subsidies for ethanol clear, including at a stop at the Iowa State Fair in August. "I don't believe in ethanol subsidies, but I believe in renewable fuels," he said then. McCain is also one of several U.S. senators who co-sponsored a bill by Texas Republican Senator Kay Bailey Hutchison to freeze the renewable fuel standard (RFS) for ethanol at this year's level of 9 billion gallons. The energy bill passed in 2007 mandates 15 billion gallons of corn ethanol by 2015.

"Ethanol is very important to America's farmers and it's certainly important to the economy of Iowa," Northey says.

McCain does say he supports biofuels in general. And his party platform's section on energy, the GOP does call for continuing to develop biofuels, "especially cellulosic ethanol." And it supports moving quickly to flexible fuel vehicles.

Yet, Northey says, Midwestern farmers and Republican leaders are going to want more clarity on how McCain views the tax credit for ethanol and the renewable fuels standard.

"Certainly, I think Obama has been saying the right things as far as making the industry confident that he would support ethanol and that it will grow," Northey says.

Northey and others will be trying to get McCain's ear on this issue, he says.

"There are conversations going on about this, about the economic implications and the political implications of this," Northey tells Agriculture Online.

Others are more discouraged.

"To me, coming out of the convention, the Republican Party is definitely Big Oil," says Dave Nelson, A Belmond, Iowa, farmer who is chairman of the Midwest Grain Processors.

Nelson, who is also on the board of the nonpartisan ethanol lobbying group, the Renewable Fuels Association, says he also tries to stay nonpartisan when it comes to working with elected officials on ethanol policy. He has worked some with his county Republican organization, he says, and he considers President George W. Bush, "the best champion the [ethanol] industry ever had."

The Republican party's big campaign issue related to enegy these days is the need to open up offshore drilling for oil.

"The ethanol industry has supported drilling because we need all forms of energy, but we can't get our back scratched from the oil industry," Nelson tells Agriculture Online.

As the ethanol industry has continued to expand, the oil industry isn't buying ethanol aggressively, either, and the price is about $1 a gallon lower than gasoline, Nelson says. Many ethanol plants are operating at break even, or even in the red, he says.

"It's going to be a very interesting and tough year for the industry," he says.

To counter negative perceptions of ethanol, industry groups have been buying advertising. This month caps a 12-week campaign in the pages of Time and Business Week by the Ethanol Promotion and Information Council, says Toni Nuernberg, EPIC's executive director. One ad compares the $500 that ethanol saves a family in annual gasoline costs to a tax stimulus check.

"It cost just shy of a million dollars," Nuernberg says. "It was funded thanks to some contributions of EPIC members. Fagen, Inc. was the driving force behind it." Fagen is one of the leading builders of ethanol plants in the U.S.

"We want the consumer to be educated and we're also trying to combat the anti-ethanol campaigns that are out there fighting against us," she says.

In spite of that spending, and spending last year on advertising in the Washington area by the Renewable Fuels Association, RFA board member Nelson believes that public support for ethanol has dropped off.

Still, it was running about two to one in favor of federal support for ethanol early this summer, says Matt Hartwig, spokesman for the RFA.

"When you have huge multinational companies spending millions of dollars to trash our industry, it's going to have some impact," Hartwig concedes.

Hartwig shares some of the misgivings about the GOP plank calling for an end to "mandates" for ethanol.

"It is concerning when either party has a plank in the platform that would limit the choices of the American people," he says. "At the same time, you have a number of leaders in the Republican Party who are going to pay not attention to the platform."

Last week's Republican convention was disappointing to ethanol industry advocates, who have always been able to count on support from leading members of the party, including Senators John Thune of South Dakota and Chuck Grassley of Iowa.

Read more about

Talk in Marketing

Most Recent Poll

How’s the crop weather at your place?