Conventional political wisdom has long asserted that if you want to win in Iowa, you need to support ethanol and the 2007 Renewable Fuel Standard, which requires a growing volume of ethanol to be blended into U.S. motor fuels. After all, Iowa is home to 41 corn ethanol plants, according to the Iowa Corn Growers Association, and produces about 25 percent of U.S. ethanol.
Or to put it another way, 47 percent of the corn grown in Iowa is used for this fuel.
And yet Republican Ted Cruz, victorious Monday in the Iowa caucuses, had opposed Renewable Fuel Standard, arguing that it should be phased out. This puts him in contrast to a long litany of other candidates who, in Iowa, have stood up for ethanol, including many Republicans. Indeed, Cruz came under major attack for his stance, including from the state’s Republican governor, Terry Branstad, who dubbed Cruz the “biggest opponent of renewable fuels.”
So what’s going on here?
First of all, it’s important to note that while the RFS has long had its opponents, it has been mired in especially deep controversy lately, as fuel refiners have balked at increasing levels of biofuels mandated to be blended into the nation’s fuel supply. These voices claim that there is a “blend wall” at the point where ethanol exceeds 10 percent of gasoline, beyond which some cars may have problems using the fuel.
The EPA, which administers the RFS, missed several deadlines for setting annual volume requirements in recent years, before recently setting a course that would continue to expand the biofuels program, albeit not at the pace envisioned by the original RFS.
The political context has also shifted considerably since the original days of the RFS, when the policy was supported by those claiming it would lessen U.S. dependence on foreign oil. Nowadays, the shale oil revolution has done that.
So mounting controversy over and opposition to the mandate may have something to do with Cruz’s outward willingness to clearly oppose the RFS.
But as for carrying Iowa, the key factor may be that Cruz appealed to crucial voting blocs like Christian conservatives in other ways, while also managing to neutralize the ethanol issue, at least to an extent.
“This does show that Christian evangelicals are more prone to vote their religion than what the governor and corn economic interests say should be their voting guide,” says Bruce Babcock, a professor of economics at Iowa State University who focuses on energy and biofuels. “And, as Ted Cruz is so capable of doing, he muddied people’s perceptions about whether he really is pro- or anti- ethanol, somehow blaming the RFS for keeping ethanol from achieving its full potential.”
Indeed, Cruz certainly didn’t accept the notion that he’s anti-ethanol in the campaign — he tried to turn the issue around in his favor.
For instance, in an oped in the Des Moines Register last month, Cruz called the charge that he opposes ethanol “utter nonsense,” instead arguing that he was a friend of ethanol but that the EPA — an incarnation of the broader problem of “Washington” — in effect isn’t. In particular, Cruz claimed, the “EPA’s blend wall” was the cause of a situation in which “the market is currently dominated by low-level ethanol blends, such as ‘E10’ (10 percent ethanol and 90 percent gasoline). That has prevented mid-level ethanol fuels, such as E25 or E30, from widely reaching American consumers.”
But the idea that the EPA is the source of the blend wall — or that it’s limiting ethanol to 10 percent of gasoline — is incorrect, says Margo Oge, former director of the Office of Transportation and Air Quality at the agency.
“It’s not EPA’s responsibility for the blend wall. E15, which is 15 percent of ethanol in fuel, is legal, so cars 2001 and newer can use it,” she says.
More generally, Oge argues that up until now, the RFS has indeed been a boon to the ethanol industry — which has supplied the vast majority of biofuels blended into motor fuels under the mandate — but that Cruz would apparently want to kill the program just when its positive environmental benefits are on the cusp of being realized. This, she said, would occur through the development of so-called “second generation” biofuels, such as cellulosic ethanol.
“Killing RFS means killing the second generation of biofuels, plants that don’t compete with food, versus corn ethanol, [where] half of the corn that’s produced goes to fuel,” Oge says.
So it could be that Cruz sounded just pro-ethanol enough — while also appealing to Christian Right voters — that his anti-RFS stance didn’t hurt him.
That result could nonetheless have significant implications for the perceived power of the ethanol lobby and for the staying power of the RFS.
“After Cruz’s Iowa win, politicians on both sides of the aisle may no longer see ethanol as a third rail issue and be more willing to have a conversation about how to reform current ethanol policy to better achieve the law’s original intention of bolstering our energy security and reducing carbon emissions,” says Jason Bordoff, a professor and founding director of the Center on Global Energy Policy at Columbia University.
In a press call Tuesday, ethanol proponents argued that most candidates in the Iowa caucuses did support the RFS, and that Cruz had been just as critical of the oil industry in the campaign in the state (opposing all energy subsidies, including those for oil and gas). Speakers also argued Cruz’s victory didn’t depend on his stance on ethanol.
“Cruz had a good ground game, and quite frankly, I don’t think Trump did,” said Paul Tewes, a Democratic strategist with the Smoot Tewes Group, on the call. Tewes added that “as a Democratic operative looking forward to November, if Ted Cruz is the nominee, looking at these pro-RFS numbers, I’m happy to put Iowa in the Democratic column.”
But oil industry defenders were ecstatic, hailing the development as a sign of the RFS’s growing political vulnerability.
“The RFS is not to Iowa GOP caucus voters what gun control would be to NRA members — it is not the single issue upon which voting preferences are made,” said Stephen Brown, vice president and counsel for federal government affairs at Tesoro Companies. “The fallout from this reality is that further genuflection at the altar of Big Corn is no longer required by rank-and-file congressional Republicans or their leaders. Bottom line is that the Iowa outcome signals to RFS proponents that now would be a prudent time to start thinking about what end game they can live with.”