Huntsman Criticized on Energy Policy, Family Invested in Ethanol Competitor

Nov 3, 2011 5:08pm

Since delivering his energy policy speech in New Hampshire on Tuesday, Republican presidential candidate Jon Huntsman has received some criticism in the media from some ethanol organizations because they say his family business has investments in what was once an ethanol competitor.

ABC News reported earlier this year that for the most part Huntsman has steered clear of Iowa and for good reason: he’s in favor of eliminating energy subsidies all together, which is not a popular stance to take in a state that’s covered with 13.9 million acres of corn and just about every gas pump has an ethanol option fitted right between the regular and premium.

“I will systemically begin to eliminate every subsidy for energy companies, whether it be oil, natural gas, wind or solar. Under my presidency, the United States will get out of the subsidy business,” Huntsman said Tuesday.

Monte Shaw, the director of the Iowa Renewable Fuels Association, which lobbies at the state level for ethanol and biodiesel, spoke out against Huntsman’s energy policy to ABC News today. Shaw says the organization does not endorse a candidate for president, but runs the website iowansfueledwithpride.com, which informs its members of all the candidates’ stance on the subject. The organization is also critical of Rick Perry’s energy plan.

“The problem with Huntsman is, he is skipping over the part of the solution, just like his campaign is skipping over Iowa,” Shaw said.

Shaw said Huntsman’s family’s investment in the chemical MTBE, once a competitor to ethanol, has influence over his policy.

“When we’ve discussed that as an industry, we think that must play a role. Why else would he overlook one of the most proven solutions to that problem and we can up with no other solution other than his influence in MTBE industry,” Shaw said.

The Huntsman Corporation is a large producer of the chemical MTBE, which is used as a gasoline additive to oxygenate gasoline and make it burn cleaner.  In 1996, the Huntsman Corporation made a $600 million purchase of a plant in Port Neches, Texas, which produces MTBE.

Jon Huntsman told The New York Times in 1996 that the purchase was part of a strategy ‘to continue building our business in a logical, integrated fashion.”

After the Clean Air Act was passed in 1990, a 2 percent oxygen requirement in fuel was mandatory for cities with the worst smog problems.  MTBE was the oxygenate used in almost all reformulated gasoline outside of the Midwest. Ethanol was used in the Midwest for the same purpose, according to the Department of Energy, which would make MTBE and ethanol competitors for the market of reformulated gasoline.

However, MTBE was eventually detected in water supplies scattered throughout the country and was banned in California and New York. More than 17 other states followed suit after concerns over the safety of MTBE in ground water.

Now MTBE is not in U.S. gasoline, but is shipped overseas to countries like China. Huntsman Corporation signed a deal with a Chinese chemical manufacturer in May to produce MTBE.

As the bans kicked in overtime and with ethanol subsidies, the corn replacement to fuel dominates the market.

“He must not be a fan of ethanol in general because of his past business dealings. On the other hand, if you’re running for president of the United States, you need an American energy plan. He left a huge gaping hole in his plan in the middle of the United States.”

The Huntsman campaign responded to ABC News’ request for a comment.

“Jon Huntsman opposes all energy subsidies including ethanol. Unlike Mitt Romney he is not willing to pander to the voters of Iowa to back subsidies we can’t afford.”

Shaw said 95 percent of all U.S. gasoline is 10 percent ethanol.

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