Ethanol running out of gas?

AP/Fuel Fix:

For decades, presidential candidates’ chances in Iowa were wounded if not doomed unless they backed federal support for ethanol, a boon to the state’s corn-growing economy.

That rule of politics collapsed resoundingly in the 2012 campaign when five of the six top Republican candidates said it was time for such intervention in the private market to end.

Now, Iowa’s senior political leaders are pondering how to shore up political support for the corn-based fuel at a time when its economic and environmental benefits are under attack .

The latest blow came this month, when the Obama administration proposed cutting the required amount of ethanol in the nation’s fuel supply for the first time since Congress established a standard in 2007.

The state’s leading Republicans and Democrats hope they can still use Iowa’s political importance as a swing-voting state and as the site of the first presidential nominating contest to get candidates to support keeping the requirement, or at least part of it, in place.

But the case has become a tough sell for Republicans as the party has moved to the right and become increasingly hostile to government programs and directives.

Even among Democrats, concern has grown about ethanol’s role in rising food prices and in cultivation of land that had been used for conservation.

Environmental concerns: Seven things to know about ethanol

The recent boom in domestic oil production has also made ethanol less prized as a U.S.-produced fuel that limits dependence on foreign oil. The grain alcohol burns cleaner than gasoline but produces less energy.

“I think there are some that feel it’s potentially safer now to be lukewarm at least, or not supportive of it,” said Iowa’s Secretary of Agriculture Bill Northey, a Republican. “I think it’s yet to be seen if that’s a smart political position.”

U.S. Sen. Charles Grassley of Iowa said he hopes to thwart the administration’s proposal in Congress if it survives the 60-day comment period.

Meanwhile, Republican Gov. Terry Branstad planned to press his fellow GOP governors, especially those with possible presidential aspirations, to be mindful of the ethanol industry’s economic importance. He met with New Jersey Gov. Chris Christie at a governors’ association meeting in Arizona this week. On Tuesday, Branstad launched a Website for people to leave comments for the EPA.

For politicians eying the White House, “Whoever comes here better understand the importance of renewable fuels, or they are going to have hell to pay in rural Iowa,” Branstad said in a recent interview.
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I oppose the ethanol mandate.  It is bad policy from a time of perceived scarcity of more traditional fuels.  If the farm state politicians want to keep it viable, they should have to compete as a fuel without any mandates or price supports.  We do not need ethanol as a hedge against foreign oil.   Like most alternative sources of energy, it is over priced.  It also diverts resources better used for food.

The politics of ethanol makes a good case for not having Iowa as an early state in the Presidential selection process.