Ag leaders pan GOP ethanol stance | TSLN.com

Ag leaders pan GOP ethanol stance

Jerry Hagstrom
DTN Political Correspondent

ST. PAUL, Minn. (DTN) – Republican presidential nominee John McCain’s opposition to government aid for ethanol, which was endorsed by the party’s delegates this week, is already causing him trouble as the Republican Party convention ends Thursday and his campaign heads into the general election.

McCain has long opposed tax breaks for ethanol and the tariff that protects it from imports. But farm leaders were surprised when Republican delegates on Sept. 1 passed a platform item calling for the repeal of the Renewable Fuel Standard. “The U.S. government should end mandates for ethanol and let the free market work,” the platform said.

Douglas Holtz-Eakin, an economic adviser to McCain, told Reuters that McCain supported the provision. “This is a great piece of support for his principles,” Holtz-Eakin said.

Unhappiness with the party’s position on ethanol began to surface Tuesday evening at the Minnesota Agri-Growth Council’s $1 million AgNite celebration attended by more than 5,000 farm leaders, delegates and journalists.

McCain’s positions against the farm bill and against ethanol subsidies had already made farm leaders insist that the event be billed as a “celebration” of Midwestern agriculture rather than a celebration of McCain’s nomination. But the Minnesota Corn Growers Association, which contributed $75,000 to the party, had not expected the Republicans to adopt the anti-ethanol platform provision. At the party, several grumbled about whether they needed to change their usual Republican-voting habits.

Randall Doyal, chief executive officer of Al-Corn Clean Fuel, a Claremont, Minn. ethanol plant, said in an interview, he believed the Republican National Committee, and McCain in particular, are attempting to distance themselves from the unpopular Bush administration.

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“In this case it is throwing the baby out with the bath water,” Doyal said. “While President Bush has always been identified with ‘Big Oil,’ he is the one president in quite some time to understand the importance of energy security and how ethanol makes a significant contribution to that goal. Today we have T. Boone Pickens, definitely a Texas oil man, who is saying some of the same things President Bush said, and no one appears to be giving him grief. The RNC has chosen the wrong position on this issue. At the same time the platform claims to be in favor of other alternative fuels or renewables. How could developers of those technologies trust the statements made, since we see the RNC going backwards on the direction they previously followed?”

The 2004 Republican platform endorsed ethanol as a way to end dependence on foreign oil. The new platform is also in opposition to the policies of President Bush, who signed the 2005 energy bill that established the standard and the 2007 energy bill that called for it to increase to 36 billion gallons per year by 2022.

Some analysts say the mandate has played a major role in the increase in the price of commodities. The meat industries and food processors, who have experienced higher food and ingredient costs, have called for the mandate to be eliminated or reduced. Texas Republican Gov. Rick Perry petitioned the Environmental Protection Agency to lower the standard on an emergency basis because chicken producers in his state have complained about high food costs, but EPA has declined.

Matt Hartwig, a spokesman for the Renewable Fuels Association, who attended the AgNite event, said it was “inconceivable” that the GOP would adopt a platform that limits energy options.

“Ethanol and all renewable fuels are reducing America’s dependence on foreign oil while revitalizing rural America economies and helping address the growing problem of global climate change by reducing greenhouse gas emissions from motor vehicles,” Hartwig said.

Bruce Stockman, executive director of the Minnesota Corn Growers, said his members “were disappointed. Without incentives renewable energy cannot compete against heavily subsidized oil.” Jackman added that the group also does not want the country to exchange the importation of “one form of energy for another.”

National Corn Growers Association President Ron Litterer issued a statement Thursday stating that his members “are disappointed that the Republican platform contains a statement on ethanol that fails to understand the overwhelming evidence of the value of ethanol to U.S. citizens. The new platform statement directly opposes the strong support for a Renewable Fuels Standard in the 2007 energy bill, support given by both Republicans and Democrats in the Congress and from President Bush.” Litterer added, “Much of the credit for the ethanol industry’s growth in the past few years goes to the positive actions by many in both parties, who are taking giant steps to move our country toward a more secure nation by relying less on foreign oil.”

Anne Steckel, director of congressional relations for the American Farm Bureau Federation, said Farm Bureau was “really disappointed they changed their position.” She added that the decision “was really confusing because biofuels lowers gasoline prices.” Steckel said support for ethanol is an “important” issue to Farm Bureau members and that the change in position “will come into consideration” when they decide whether to vote for McCain or Obama.

National Farmers Union President Tom Buis said it is disappointing that GOP delegates would be so short-sighted to call for repeal of the RFS.

“Without the RFS it will be difficult for our nation to ever wean our country from foreign oil,” Buis said. “The RFS is critical to the production of the next generation of bio-fuels, from all types of feedstocks, switchgrass, wood waste and corn stover. It is like surrendering to big oil! And if they want the free-market to work for ethanol and biodiesel, then to be consistent they should demand the same from big oil and call for repealing the huge tax cuts to the oil companies.”

Former Agriculture Secretary John Block, a McCain private sector adviser, said at the AgNite party he was not happy about the provision but he does not think the RFS will be repealed. “McCain is trying to control spending. He will be tough on subsidies of all kinds.”

Block, who was an Illinois farmer before he moved to Washington to serve as President Reagan’s agriculture secretary, said that “maybe there could be some modest change” in the standard, but added that he believes the standard is necessary “to give alcohol fuels a chance” and for a transition from corn-based cellulosic ethanol.

While the Democrats held a number of rural events at their convention, there were no rural events at the Republican convention except a shooting excursion scheduled by the National Rifle Association. A McCain aide said a “rural prosperity” initiative would be released in September. McCain opposed the farm bill and the aide said that the initiative would emphasize rural Americans coming up with new ideas to improve their lives, rather than more help from Washington.

McCain is almost certainly leading Democratic nominee Barack Obama in the nation’s rural areas. Republican presidential candidates have won the majority of rural votes for decades, but Democratic candidates most often win when rural enthusiasm is low and the Republican winning percentage goes down in the rural areas of swing states, particularly Michigan, Pennsylvania, Ohio and Iowa. This year other rural states could also be in play. That’s how Bill Clinton captured the presidency in 1992 and 1996.

Jerry Hagstrom can be reached at jerry.hagstrom@dtn.com

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