Harvest Time In Washington?
The increasingly hard-fought battle over the Renewable Fuel Standard (RFS), could all boil down to one state, Iowa, during the presidential election. Here’s why.
The other day, I jumped into a cab in Washington, D.C. and headed up the Hill for some meetings. My normal practice during such rides is to turn down the volume on the taxi video screens, as I get plenty of audio stimulation during my day.
But this day I looked up just in time to see a rather frantic commercial featuring caricatures of President Obama wearing a French beret, in Paris, and holding a sign reading “French for Hypocrite?”.
Recognizing clever work when I see it, I was intrigued.
When I got back to my office, I searched to see who was behind this. Expecting it to be an attack from a conservative political group, I was surprised that the subject was not a polarizing social issue of some sort. But it is about one that’s becoming increasingly hard fought – ethanol. More specifically, the Renewable Fuel Standard or RFS.
This campaign is being directed by Americans for Fuel Security & Innovation, a pro-RFS group that wants to keep the law intact. It matches the efforts of anti-RFS groups such as the American Petroleum Institute (API) who want to ditch the law entirely. API has been running slick anti-RFS communications for months.
Why is the struggle over a somewhat obscure energy policy generating such big public advocacy campaigns? A little background may be in order:
Americans have been using biofuels – alternatives to gasoline such as ethanol – for 100 years, but the success of the petroleum industry has limited its usage. In the 21st Century, gas prices increased, as did interest in alternative energy sources. In 2005, President George W. Bush signed into law the Renewable Fuel Standard as part of the Energy Policy Act of 2005. It mandated that 7.5 billion gallons of alternative fuel be blended into gasoline by 2012. In 2007, Congress and the President extended that deadline to 2022 and increased the mandate to ultimately reach 36 billion gallons by 2022.
Initially focused on corn ethanol, the program was predicated on increasing demand for gasoline, and the development of new technologies to make other renewable sources of ethanol, such as cellulose fibers more attractive then corn. The goal was to reduce our dependence on foreign oil and produce cleaner burning, renewable fuels.
Sounds like a good program, so why all the commotion?
As occasionally happens with Big Ideas, some of the assumptions in the law haven’t quite panned out. The demand for gasoline has steadily declined rather than increased, and a secondary source of ethanol beyond corn hasn’t developed. America is now an energy exporter rather than importer and fuel efficiency is increasing.
What that all means to America’s future is where the battle lines are drawn around the RFS.
Two sides to the story
Pro-RFS supporters are mostly led by members of the National Corn Growers Association. Not surprising. Since about 40% of the annual U.S. corn harvest goes to meet RFS mandates they have a large stake in the law. But they also make a case that the law works, greenhouse gases are decreasing, and the RFS creates jobs. Supporting them are some environmental organizations and lawmakers in a few key states (more about that later).
But there are a whole lot of groups who really don’t like the RFS for a variety of reasons. API contends that we are approaching a “blend wall” when increasing amounts of ethanol start to damage auto, boat and small engines. They are supported by car, boat and small engine manufacturers.
Some sectors of the food supply chain also strongly oppose the RFS. Ranchers and poultry farmers contend that the RFS diverts corn from feed to unwanted fuel, thereby driving up their costs, which they must pass to customers. That is also why restaurant companies and some hunger groups object; raise the cost of feed and you increase the costs of beef, poultry and dairy products.
Finally, a number of environmental groups including Friends of the Earth opposes the RFS (at least as written) saying that it drives sensitive land into corn production and does not provide any reduction in greenhouse gas emissions.
Where does the EPA stand?
In the midst of this, stands the Environmental Protection Agency. EPA has the unenviable job of setting annual ethanol quotas, a task so painful that they have missed deadlines, and are about to issue quotas for 2014 and 2015 as well as for 2016.
Opposition coalitions have been pushing Congress to repeal the RFS for several years with limited success; legislation is in place but has stalled. But the upcoming EPA quota announcement has prompted a new burst of issue advocacy, culminating in President Obama and his beret.
The EPA is set to release their new quotas on November 30th, the same time as the scheduled Paris climate summit. Documents filed by the U.S. ahead of that summit outline our steps to reduce greenhouse gases, but make no reference to the RFS, and that has supporters worried for the future, hence the beret reference.
So what’s the future of the Renewable Fuel Standard? This conflict presents opportunities for issue management firms specializing in advocacy campaigns, never a bad thing for those of us in that business. But with overlapping constituencies, will these social media campaigns ultimately change any minds? It’s hard to say.
The RFS is an odd policy issue that doesn’t fit into neat demographic categories. There is no strict partisan divide as there are plenty of Democrats and Republicans on both sides of the issue. Nor is it a business versus public interest group fight; there are advocacy organizations and businesses backing both points of view. It is not even a rural versus urban tussle, as ranchers are aligned with hunger groups to oppose some farm interests and environmental organizations.
Where is the key to this puzzle?
The survival of the RFS may come down to how we Americans feel about a certain special place. A place that connects deeply with how we feel about our country, its heritage and the simple values that we cherish. A place in America’s Heartland.
Yes, the Hawkeye State plays a big role in the Renewable Fuel Standard. My mother is an Iowan and I know that magical place that evokes images we Americans hold dear. Think of Iowa and you think of hard working, salt of the earth family farmers. The kind of folks who simply want to be left alone to make a future for their families and feed our country. The flame of American independence burns bright in those fields.
It is a quiet place for the most part. But every four years it gets a lot busier when Presidential candidates start showing up at town halls and pancake breakfasts. Corn growers care a lot about the RFS and Iowa farmers produce more corn than any other state. So, when hopeful Presidents come to town, you can bet folks are going to ask them about their position on the RFS. You can also bet that as far as those voters are concerned, there is only one right answer. These good people understand the state motto: Our liberties we prize and our rights we will maintain.
So all of these advocacy efforts aimed at the RFS are running headlong into the political calendar. The pro-RFS side gets the added benefit of politicians who don’t want to offend Iowans, and the anti-RFS crowd has to find a way around that.
Big time issue campaigns aside, I for one find it kind of exciting to think that this little state might hold the key part of America’s energy policy.