Cruz Won, But So Did Ethanol

Industry Backers Offer Post-Game Analysis Claiming Ethanol's Strength in Iowa Vote

Chris Clayton
By  Chris Clayton , DTN Ag Policy Editor
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America's Renewable Future sent out a mailer which told Iowans that Sen. Ted Cruz was one of the candidates considered bad for ethanol and renewable energy. (DTN photo by Chris Clayton)

OMAHA (DTN) -- Biofuel supporters put a positive face on the final results of the Iowa caucuses even as the one candidate dogged by his stance on the Renewable Fuels Standard came out as one of victors Monday night.

There was no doubt leading into the Iowa caucuses that pro-ethanol groups were singling out Texas Sen. Ted Cruz for his positions on the RFS. Those attacks didn't resonate enough as Cruz still handily won the GOP caucuses with 51,666 votes, nearly 28% of the vote, and carried the most rural counties of any Republican across the Iowa.

On Tuesday, some key ethanol backers criticized the "Monday morning quarterbacking" by people who interpreted Cruz's victory as a repudiation of pro-ethanol politics in Iowa. Tom Buis, co-chairman of Growth Energy, offered his own post-game analysis in a call with reporters. Ethanol won on caucus night, Buis and others said, because nine of the 11 GOP candidates, and all three of the Democrats, had declared some level of support for the RFS. Taking the Republican and Democratic votes as a whole, Cruz accounted for less than 20% of the total votes cast on Monday.

"Well, the facts are that over 80% of the votes cast yesterday in Iowa were cast for candidates that are in favor of the RFS," Buis said.

That committed support from other candidates ranged, however. Some candidates favor capping the RFS while others want to end it in 2022. Still, a few want to expand biofuel production beyond the current law.

Monte Shaw, executive director of the Iowa Renewable Fuels Association, said the effort to support the RFS has always been about more than one candidate. Additionally, the battle over the RFS is also meant to shed a spotlight on the subsidies and market control of the oil industry. Shaw reiterated some of Buis' comments that the vast majority of candidates are "pro-RFS."

"That's a huge win," Shaw said. "We've made progress and the other side has lost ground."

In Washington, the petroleum industry will nonetheless try to spin the Iowa caucuses as an opportunity to dial back the Renewable Fuels Standard as part of an energy bill being debated on the Senate floor right now, Buis said. There are amendments to eliminate or cut the RFS as well as eliminate subsidies for infrastructure such as blender pumps. Senators will be voting all week on different amendments.

Buis pointed out Cruz also talked about eliminating all oil subsidies. At least one amendment to the energy bill proposes to phase out oil and gas subsidies over the next decade.

Iowa Gov. Terry Branstad earlier this month stepped directly into the fray by cautioning that a Cruz win would be bad for the state. Buis said any governor should take a stance on a candidate when their views impact a major economic driver in the state.

"As an observer, I would say what Gov. Branstad did was what you would expect the governor of the state of Iowa to do," Buis said.

In 2013, Cruz had proposed eliminating the RFS. Yet, during Iowa town-hall meetings, Cruz proposed phasing down the RFS through 2022. He also called for eliminating the caps on the percentage of ethanol that could be blended in fuel tanks. Cruz called for anti-trust investigations into petroleum markets, as well as ending tax breaks for the oil industry.

"So it was an issue in the campaign, probably the most significant caucus activities ever where it was a factor and a very positive factor," Buis said.

Paul Tewes, a Democratic political operative, said if Cruz becomes the nominee, the influence of ethanol in the fall political fight would lead him to "put Iowa in the Democratic column." Cruz said the RFS is a unique issue in rural areas.

Shaw also touched on oft-repeated criticism that Iowa and agriculture have too much influence in nominating candidates for president. He defended Iowa's standing as first-in-the-nation for the primaries.

"Once every four years is not too often to force our political leaders to talk about agriculture and the rural economy," Shaw said. "If it's not the Iowa caucuses, it's only a massive drought or horrible flood that we ever hear them talking about agriculture."

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Chris Clayton