Biofuels on candidates' radars on campaign trail

ByPhilip Brasher, Des Moines Register

— -- President Bush did it, as did his Democratic rivals in the 2000 and 2004 elections. Bill Clinton did it before any of them.

They campaigned in Iowa and talked up corn ethanol. It's assumed to be a rite of passage for anyone wanting to win the presidency by starting strong in Iowa's first-in-the-nation caucuses.

Democratic candidates this year are no different. They're embracing virtually everything on the biofuel industry's wish list, including an energy bill nearly completed that would require motorists to use 36 billion gallons of biofuels by 2022, nearly six times what ethanol producers will distill this year.

But the Republican candidates are divided over whether the government should require increased production of the fuel or whether to continue the subsidies and import tariff upon which the industry has come to depend.

"Some of the Republicans are not really pandering to the corn lobby. Whether they are going to pay for that at the ballot box remains to be seen," said Kenneth Green, an expert on energy policy at the American Enterprise Institute, a pro-business think tank in Washington, D.C.

The ethanol industry will lose a good friend when Bush leaves office. It's tough to beat having a former Texas oilman declare the nation "addicted to oil" and challenge Congress to dramatically increase biofuel production. And it was Bush who introduced switchgrass, a potential new feedstock for ethanol, to the nation's political lexicon.

Republicans differ on ethanol mandate, subsidies

Among the leading GOP candidates, Mike Huckabee and Mitt Romney talk the most like Bush on ethanol.

Huckabee, a former Arkansas governor, goes even further than Bush, by pledging to make the United States energy-independent in just 10 years. Romney, the former governor of Massachusetts, supports some of the biofuel industry's priorities, such as the continuation of tax subsidies, but he has stopped short of endorsing the 36 billion-gallon mandate.

Romney has promised to support aggressive research into cellulosic ethanol.

Huckabee backs the 36 billion-gallon biofuels mandate, and also supports the ethanol tariff and domestic biofuel subsidies. He believes the United States can become energy-independent through a combination of alternative energy sources, increased conservation and higher domestic oil production, including drilling in Alaska's Arctic National Wildlife Refuge, says spokesman Eric Woolson.

Calls for energy independence have been common since the 1970s, but they never go anywhere because of what it would cost the U.S. economy to replace foreign oil, said Jerry Taylor, an analyst at the Cato Institute, a think tank that promotes free markets.

The United States currently imports nearly 60% of its petroleum needs. Canada is the leading source.

Rudy Giuliani has said the United States should "get ahead" of Brazil, the chief U.S. rival in ethanol production, but the former New York City mayor hasn't taken public positions on key biofuel issues .

Arizona Sen. John McCain and former Tennessee Sen. Fred Thompson don't support biofuel mandates at all. McCain believes the tariff on imported ethanol should be abolished to lower U.S. gasoline prices.

Thompson said biofuels can be competitive without mandates, while McCain believes high oil prices should be enough to encourage the use of new energy sources. McCain, who has led efforts in the Senate to limit greenhouse gas emissions, wants to speed the development of plug-in hybrid vehicles.

Top Democrats support biofuels mandates

Experts believe the challenges of climate change and instability in oil-producing countries will ensure that energy policy stays high on the next president's agenda.

Biofuels advocates say that increasing usage of the products could help moderate oil prices, reduce greenhouse gas emissions and boost rural economies, hence the push in Washington for a higher mandate. The target of 7.5 billion gallons will be surpassed next year, four years ahead of schedule.

The 36 billion-gallon target passed the Senate in June and was adopted by congressional Democratic leaders as part of an energy bill now pending in Congress.

The higher mandate, however, has drawn opposition from oil companies, who don't want to be forced to use biofuels, and from livestock producers, who fear increased corn ethanol production will drive grain prices and feed costs still higher. Environmental groups wanted safeguards added to the mandate.

All four Democratic senators who are running for president — Hillary Rodham Clinton of New York, Barack Obama of Illinois, Joe Biden of Delaware and Chris Dodd of Connecticut — voted for the Senate energy bill, which passed 65-27 in June. McCain, the lone GOP candidate in the Senate, did not vote.

In voting for the energy bill, Clinton endorsed an ethanol mandate that exceeded by nearly fivefold one she once opposed. Now, in addition to supporting the legislation, she proposes spending $2 billion on biofuels development.

Clinton said she voted against the original mandate in 2005 out of fear it would raise gas prices for her New York constituents.

Obama, who has pushed ethanol issues since his election to the Senate in 2004, said he'll not only ensure a new mandate is met, he promises it will be surpassed. He's proposing a $150 billion fund to finance new biorefineries and says he wants to require all new cars to run on E85, a mix of 85% ethanol and 15% gasoline.

Former North Carolina Sen. John Edwards has said oil companies should be required to sell E85 fuel, a move that would help the country reach the far greater mandate.

Perhaps no candidate has been as enthusiastic as Bill Richardson, the New Mexico governor and former U.S. energy secretary, who has said renewable fuels would be "central to my entire presidency." Richardson wants to accelerate the development of cellulosic ethanol, biofuel made from plant residue.

"Most of the candidates are singing the praises of ethanol," said Robert Brown of Iowa State University's Office of Biorenewables Programs. "That's a start, but it also shows that they may be pandering to the voters of Iowa."

Among the leading Republican candidates, Romney has promised that his administration would work to make breakthroughs on biofuels' infrastructure and support aggressive research into cellulosic ethanol.

Tariff, creating a market, new mandate decisions await

A higher biofuel mandate, should it be enacted, will pose a stiff challenge for whoever wins the presidency.

Under the energy bill, 21 billion of the 36 billion gallons of biofuels required by 2022 would come from advanced forms of biofuels, such as cellulosic ethanol.

However, producing fuel from crop residue and other sources of biomass is still not economically viable, and costly new biofuel refineries must be built.

Researchers also must come up with efficient methods to harvest and store the large quantities of crop residue and other biomass necessary to make the fuel.

The next administration is likely to be lobbied by the ethanol industry to increase the market for the fuel by allowing more of it to be used in conventional gasoline.

Under current regulations, ethanol cannot be used in most cars in blends exceeding 10%, which limits the market for the fuel to 15 billion gallons a year.

The focus on biofuels in Congress owes a lot to the importance of the Iowa presidential caucuses, according to the industry's critics.

"Ethanol is not going to solve all the problems" with the nation's energy needs, but the candidates are communicating that it will, said Jay Truitt, a lobbyist for the National Cattlemen's Beef Association. His group has lobbied against increasing the biofuels mandate because of the impact of higher corn feed prices on cattle producers.

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