Iowa Ethanol Lobby Starts Its Own 2016 Campaign

An ear of corn pealed open for examination on a farm near Farley, Iowa appears to be in the early dent stage on Wednesday, Aug 22, 2007.

Photographer: Mark Hirsch/Bloomberg

Renewable-fuels advocates are promising to spend millions putting ethanol back in the debate for Iowa’s first-in-the-nation caucus next year as cheap oil and setbacks in biofuels policy make the additive less central to voters.

Iowa Governor Terry Branstad, backed by state corn-grower and renewable-fuels associations and the Washington-based biofuels lobby Growth Energy, on Thursday formed America’s Renewable Future, to make the Renewable Fuels Standard an issue in the 2016 race. The Iowa caucus is set for early January.

“We are designing it to look like a presidential campaign, but the RFS is our candidate,” said Eric Branstad, the governor’s son and a group organizer. “We’re going to be talking to people” and making the presidential candidates respond, he said on a conference call.

Ethanol companies are wrestling with prices near a 10-year low as crude oil and gasoline plunge. The need to lobby in the nation’s No. 1 producing state contrasts with a time when support was automatic, said Dee Davis, president of the Center for Rural Strategies in Whitesburg, Kentucky.

“We’re a country awash in cheap energy right now,” Davis said in a telephone interview. “The marketplace is not being kind to them, so they need to increase the drumbeat for their policies at a time when fewer people care as much about them.”

Ethanol was pushed to help farmers cope with low corn prices more than a decade ago. Domestic production has climbed 88 percent since a 2007 law to boost use of renewable fuels, Energy Department data show.

The pace of growth has slowed and Congress has declined to renew the subsidies. Projections for using more so-called cellulosic ethanol never materialized. Gasoline pump prices at the lowest since April 2009 make ethanol less desirable.

Denatured ethanol for February delivery on the Chicago Board of Trade this month fell to the lowest price since June 2005. Archer-Daniels-Midland Co., in Chicago, is the largest U.S. ethanol producer, followed by Poet LLC, in Sioux Falls, South Dakota, and San Antonio-based Valero Energy Corp.

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