The federal mandate for ethanol, known as the Renewable Fuel Standard, has very little to recommend it. Ethanol preferences distort US agriculture, diverting 40 percent of the nation’s corn crop to produce about 9 percent of its fuel supply. They drive up the price of food, making everything from bread to beef more expensive. They cost drivers at the pump an extra $10 billion a year, as the Manhattan Institute’s Robert Bryce has shown. They promote inefficiency, since ethanol, though more expensive than gasoline, contains one-third less energy.
They don’t even reduce atmospheric carbon dioxide, which was always ethanol’s main selling point. True, ethanol burns more cleanly than gasoline. But the growing, harvesting, and refining required for ethanol production causes large amounts of CO2 to be released, doubling greenhouse emissions over time.
Still, ethanol subsidies do serve one function: They make a useful gauge of political spine.
Iowa is the nation’s leading producer of both corn and ethanol. It also hosts the first competition in the quadrennial quest for the White House, and Iowa’s agriculture kingpins expect fealty to the ethanol boondoggle — an expectation they back up with lavish media campaigns to extol candidates who meet their litmus test and denounce those who don’t.
Since 1980, no candidate has won the Iowa caucuses without kowtowing to the ethanol lobby, sometimes trampling their supposed free-market principles in the process. In 2000, Senator John McCain staunchly opposed the ethanol mandate, but by 2008 had flipped, announcing that he had become a “strong” supporter of what he now called a “vital alternative energy source.” In the run-up to the 2012 Iowa caucuses, Mitt Romney smiled for the cameras, ear of corn in hand, to assure Des Moines voters: “I support the subsidy of ethanol.”
As 2016 approaches, the ethanol lobby is still a force to contend with. But there are signs its clout may be waning. When a batch of presidential wannabes showed up at the Iowa Ag Summit this month, not all of them were willing to bow before King Corn. Texas Senator Ted Cruz bluntly told the crowd at the state fairgrounds he was against them on the issue. Former New York Governor George Pataki also condemned the ethanol standard, even comparing it to Obamacare — fighting words in the GOP tent. Former governors Jeb Bush of Florida and Rick Perry of Texas, though they didn’t come out against the ethanol standard, were at best lukewarm in their support, according to Globe reporter James Pindell. Meanwhile, three candidates who have already come out against the ethanol preference — Marco Rubio, Bobby Jindal, and Rand Paul — skipped the event.
This isn’t to say there was no pandering to Iowa’s ethanol lobby. Wisconsin Governor Scott Walker, who ran ads opposing an ethanol mandate as a gubernatorial candidate in 2006, has changed his tune as a possible presidential candidate in 2016. And previous Iowa caucus winners Rick Santorum and Mike Huckabee remain unequivocal ethanol backers.
The Renewable Fuel Standard isn’t likely to vanish any time soon, but its political potency is on the decline. Bills to repeal the mandate have been introduced in Congress, with support on both sides of the aisle. Neither “green” nor economical nor taxpayer-friendly, the federal policy of ethanol favoritism doesn’t serve the national interest. It is, however, a handy yardstick for measuring whether politicians who criticize corporate welfare actually mean what they say.