Noon: Ted and Trump, different ethanol tracks

Marita Noon
On Twitter @EnergyRabbit
Marita Noon

On Jan. 19, at the Iowa Renewable Fuels Summit, Iowa’s long-time Gov.Terry Branstad jumped into the campaign fray by attempting to influence the outcome of the Feb. 1 caucus: “I don’t think that Ted Cruz is the right one for Iowans to support in the caucus.”

Branstad slammed Cruz because, as he told reporters: “He’s opposed to the wind energy tax credit. He’s opposed to ethanol and biodiesel” — which are the very positions that make Cruz an attractive candidate to limited-government, free-market voters.

Cruz has long opposed energy subsidies. In his first year in office, Cruz co-sponsored legislation to repeal the Renewable Fuel Standard, or RFS — which requires ever-increasing amounts of ethanol be blended into the nation’s fuel supply. In 2014, he took a different bite at the same issue and introduced a bill that would overhaul several energy policies, including phasing out the ethanol mandate in five years. Early in the campaign season, at the 2015 Ag Summit on March 7, Cruz was the only GOP candidate who didn’t support the RFS.

Since then, several GOP candidates have supported its phase-out. However, of all the presidential candidates, from both parties, only Cruz and Rand Paul received a “bad” rating on the American Renewable Future’s “Final presidential report card on the Renewable Fuel Standard” — which means they demonstrated consistent opposition to the RFS.

Trump, however, likely earned his “good” rating as he does not have a history of opposition to burdening “working Americans with hidden taxes,” — which is one of several derogatory phrases USA Today used to describe the RFS. In 2011, the Los Angeles Times reported that Trump “has relied on tax breaks and federal funding to build his real estate empire.”

It shouldn’t be surprising, then, that Trump told hundreds of attendees at the January Summit: “I am there with you 100 percent.” Trump also said he was opposed to changing any part of the RFS — which means, as The Hill heralded, “Trump calls for higher ethanol mandate.”

Trump’s ethanol position puts him at odds with most in his party — and even many democrats and environmentalists — as outside of Iowa, ethanol has few friends. Today, as U.S. News says, “the ethanol mandate makes no sense economically or environmentally.” The the Wall Street Journal calls it: “one of America’s worst corporate-welfare cases.”

Cruz and Trump are making different political calculations. In a matter of days, we’ll know which one was wiser: Cruz who stuck to his principles, believing that people of Iowa “will respect his honesty,” or Trump, whose embrace of the “top-down government mandate,” as The Atlantic calls it, “speaks to just how much he wants to win Iowa.”

The Atlantic concludes: “If Cruz manages to win Iowa without siding with the state’s high-profile lawmakers and a powerful industry, it could send a message to future candidates that they don’t need to support the mandate to emerge victorious in Iowa.”

Regardless of who actually wins in Iowa, if Cruz comes out ahead of Trump, it could pave the way for a Republican president, whomever he or she might be, to finally repeal the outdated and unworkable RFS — which, oddly enough, could help Iowa’s corn producers. Refiners would still use ethanol. It has a place in the free market. As I’ve previously addressed, ethanol is the most cost-effective octane booster. But the RFS requires increasing unavailable advanced biofuels and reducing corn ethanol. When the Environmental Protection Agency announced the 2016 blending rule, it required higher advanced biofuel levels.

Soon we will know if Iowa, like the rest of America, realizes that the RFS is ripe for repeal.

The author of Energy Freedom, Marita Noon serves as the executive director for Energy Makes America Great Inc., and the companion educational organization, the Citizens’ Alliance for Responsible Energy.