Who's Afraid Of Ethanol? The 2012 Race Will Tell

Enlarge this image toggle caption Steve Pope/AP Steve Pope/AP

Enlarge this image toggle caption Charlie Neibergall/AP Charlie Neibergall/AP

There has long been a truism for presidential hopefuls in Iowa. If you want to do well in the first of the nation caucuses, then you'd better support subsidies for ethanol. Yet this year, with overall federal spending and deficits becoming such a major issue, the political rules regarding ethanol may be changing.

Go back and listen to Iowa stump speeches from candidates past — Democrat and Republican alike, front runners and long shots — and you'll hear lines that have been music to the ears of the states' corn growers.

"I support ethanol and I support ethanol strongly," George W. Bush said in 1999. "And I'd support ethanol whether I was here in Iowa or not."

That same year, Al Gore boasted of a tie-breaking vote he cast while presiding over the U.S. Senate as vice president. "I voted, and we saved ethanol," he said. "And Iowa won." In 2008, Barack Obama championed ethanol subsides, too.

When someone did speak out in opposition, it got a lot of attention.

"Ethanol is not worth it," Sen. John McCain (R-AZ) declared during his 2000 presidential campaign. "It does not help the consumer. Those ethanol subsidies should be phased out, and everybody here on this stage, if it wasn't for the fact that Iowa is the first caucus state, would share my view that we don't need ethanol subsidies."

In two runs for the White House, McCain mostly opted out of campaigning in Iowa, knowing his position made him an unpopular candidate among caucus-goers.

Yet this campaign season is sounding a new tone. In announcing his candidacy for president in Iowa this past week, former Minnesota Gov. Tim Pawlenty also sent a message.

"The free market, not freebies from politicians, should decide a company's success," he said. "So, as part of a larger reform, we need to phase out subsidies across all sources of energy and all industries, including ethanol. We simply can't afford them anymore."

Like McCain, Pawlenty portrayed his blunt talk as truth-telling. Unlike McCain, Pawlenty thinks he can win in Iowa. He believes times have changed enough to allow him to oppose ethanol subsidies.

Des Moines Register political columnist Kathie Obradovich says he may be right.

"It's a different time. Tim Pawlenty is coming in at a time when the ethanol industry is mature — and some people think it may be oversaturated," she says.

Enlarge this image toggle caption Charlie Neibergall/AP Charlie Neibergall/AP

Combine that with rising gas prices, which make ethanol more competitive, and there's a growing belief, even in Iowa, that the industry can probably handle a gradual phase-out — or at least a reduction — of subsidies. The key for Iowans, Obradovich says, is that ethanol not be singled out.

"If he had come in and said, 'We're gonna cut the subsidies for ethanol, but we think big oil should still get their share,' that would not have gone over well here," she says.

Still, some other 2012 GOP hopefuls, including Mitt Romney and Newt Gingrich, continue to voice support for ethanol subsidies. Republican strategist John Stineman, a veteran of Iowa political battles, says there is risk for Pawlenty and that he'll need to explain himself.

"Iowa has a very sophisticated electorate," he says. "They are not going to just go on the sound bite; they'll want details. And I think there will be a pretty robust discussion of this in this election cycle."

Which means the Iowa caucuses could see something new this time around, in the form of a real debate on an issue where in the past, only one position was seen as acceptable.