Will Ethanol Ride The GOP Wave?


Nov 5, 2014

By Daniel Looker

Bruce Braley the Iowa Democrat who lost his bid to be a U.S. Senator Tuesday, famously told a group of lawyers in Texas that if Republicans gained control of the Senate, the next chair of the Judiciary committee would be “a farmer from Iowa,” Senator Chuck Grassley. The video clip of that comment, played often in attack ads, may have doomed his chances of winning against Iowa’s new Republican Senator-elect, Joni Ernst.

Maybe Braley should have pointed out that the next chair of the Senate Environment and Public Works Committee is likely to be Senator James Inhofe, an Oklahoma Republican who is a strong critic of the renewable fuel standard. Last year Inhofe called for “Repealing Obama’s Ethanol Mandate.”

So, does the shift in power in the Senate mean that corn-based ethanol will be weakened?

Those who lead the nation’s three leading ethanol groups don’t think so, but they’re hardly complacent, either.

“I don’t think it has that much impact at all,” Bob Dinneen, president of the Renewable Fuels Association in Washington said of the election results Wednesday. “The mathematics of ethanol hasn’t changed.”

“They’ll still need 60 votes on the floor of the Senate to repeal the Renewable Fuel Standard,” he told Agriculture.com. That’s the number needed to break a filibuster that would block any legislation to repeal the RFS. The Democrats, who control the Senate until next year, don’t have 60 votes. And, even after Tuesday’s wave election, Republicans won’t have a 60-vote majority in 2015.

Dinneen points out that new senators from Colorado, Nebraska, Iowa and South Dakota are all supporters of ethanol, as are GOP veterans from the Midwest, Senators John Thune of South Dakota and Grassley from Iowa.

“These folks will come to town and support the Grassleys and John Thunes of the world,” Dinneen said.

Dinneen added that the first RFS passed in an energy bill in 2005 was under a Republican President, George W. Bush, and Republican Congress. The 2007 energy bill, which created a larger mandate for biofuels in its RFS, passed when Bush was still in office and after Democrats had taken control of the Senate. 

Brian Jennings, executive vice president of the American Coalition for Ethanol in Sioux Falls, South Dakota, agrees that ethanol’s support is bipartisan.

“I’m going back to the principal that has been true for ethanol forever, that ethanol has been a bipartisan issue,” Jennings said Wednesday. “We expect that this remaining bipartisan support will keep big oil from reducing or eliminating the RFS.” 

That doesn’t mean ethanol groups won’t be busy. Under Republican leadership in the House of Representatives, committees have held hearings that featured oil industry critics of the RFS and members from both parties backed bills to weaken the RFS that ultimately went nowhere.

Both Dinneen and Jennings expect Inhofe to hold hearings attacking the RFS. 

Like many issues in agriculture, support or opposition to the RFS is regional, with critics coming from oil states like Oklahoma, or Texas and Virginia, where cattle feeders and poultry producers have blamed the mandate for creating high prices for corn – when prices were high.

Jennings believes that the development of cellulosic ethanol could expand that regional support for biofuels.

“Hopefully, what we can do is expand that playing field so that other members of the country join that bipartisan caucus” that supports ethanol, he said.

Another factor that could moderate efforts to repeal the RFS is that the new Senate Majority Leader, Mitch McConnell will be under pressure to pass legislation, Dinneen said. That includes other measures desired by the oil industry, such as the Keystone XL pipeline to bring Canadian crude to the U.S. Gulf, and ending the U.S. ban on domestic crude oil exports. McConnell has a better chance of doing that if he leaves out an issue as divisive as repeal of the RFS, Dinneen said. 

Jennings pointed out that the views of some of the successful candidates for the Senate “have offered a range of responses when it comes to the RFS.”

Ernst, for example, told The Des Moines Register last spring that philosophically she opposes mandates and government subsidies, but her campaign responded to criticism from Braley by pointing out that Ernst, as a member of the Iowa Senate, voted to support the RFS. (The Iowa legislature doesn’t control the RFS, of course, but was part of a strong Midwest campaign against an EPA proposal to weaken the ethanol mandate in the RFS.) Ernst has pledged to continue to “passionately defend the RFS in the U.S. Senate.”

Jennings said citizens need to make sure campaign promises are kept.

“Now is the time we have to hold newly-elected officials accountable for the promises made on the campaign trail,” he said.”In other words, I don’t think anyone should be complacent.”

Tom Buis, CEO of Growth Energy, another ethanol group, agrees that “biofuels policy is bipartisan and always has been.”

But he also looks for more pressure on ethanol in the Senate – not from new Republicans from midwestern states, but some of the new senators from other regions who got backing from the oil industry.

“Oil doesn’t invest all this money in these campaigns out of the goodness of their hearts,” Buis said. 

The change in leadership of the Senate Environment and Public Works Committee to ethanol foe Inhofe is dramatic. Its chair under the Democrats, Senator Barbara Boxer of California, said “that as long as she held this gavel, there will be no changes to the RFS,” Buis recalled.

In the new Senate, “we expect there to be attempts [to weaken the RFS]. Whether any succeed, I highly doubt it,” Buis said.

Ethanol’s strongest support may be in the Corn Belt, but Buis pointed out that “we have supporters on both coasts as well as the Midwest.”

“We don’t think we had any net losses in the Senate – if they had a vote on the RFS,” Buis said of the tally of supporters.

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