Des Moines Register
05-16-06
Ethanol popularity fuels campaign debate
Candidates disagree on its vitality and how to advance consumption.
THOMAS BEAUMONT
REGISTER STAFF WRITER
Lofty gas prices and war in the Middle East have pushed development of
renewable fuel for the first time in at least a generation into the top tier of political
issues facing Iowa this year.
Candidates vying to succeed Democrat Tom Vilsack as governor agree Iowa's
homegrown ethanol promises to be the best treatment for the nation's petroleum
addiction and have suggested ways for the state to further benefit economically.
But Democratic gubernatorial candidates disagree about how to increase
consumption of the corn-based fuel additive, as well as on its long-term utility.
Despite differences such as whether the state should require all gasoline to
contain a specific concentration of ethanol, the candidates recognize the
heightened importance of the issue to voters this year.
"We have to make some kind of change that needs to be sooner than later," said
Iowa City Democrat Lisa Fender, who is undecided about whom she will support
in the June 6 primary. "Ethanol is a good idea to cut down on our reliance on
foreign sources of oil. But we need a long-term solution, and I'm not sure that's
it."
Secretary of State Chet Culver and state Rep. Ed Fallon support requiring a
minimum concentration of ethanol for all gasoline sold in Iowa.
Meanwhile, Mike Blouin, former state economic development director, says such
a requirement is less important than an all-out push for fuel made up of 85
percent ethanol.
Nationally, polls show fuel costs as the second most-pressing issue facing
Americans, behind the war in Iraq. Renewable fuel has cracked the top handful
of political issues for gubernatorial candidates this year in Arkansas, Colorado,
Ohio and other states.
But in Iowa, the nation's leading producer of ethanol and soy diesel, the issue is
particularly salient, said national pollster John Zogby, president of Zogby
International. "It's probably more acute in Iowa, where there is a perceived
solution."
Culver has proposed that all gasoline in Iowa contain at least 10 percent ethanol
- a position he has emphasized as central to his campaign. He would spend $100
million over four years on incentives aimed at moving Iowa's manufacturing
sector more toward renewable fuel technology, especially related to the
automotive industry.
About 70 percent of drivers use ethanol-blended fuel in Iowa, which would join
Minnesota, Hawaii and Montana if the state adopts a mandate. The Iowa
Legislature stopped short of establishing one last month, settling on a goal of
having 25 percent of all fuel in Iowa be from renewable sources by 2020.
Most ethanol-blended gasoline contains 10 percent of the renewable fuel and 90
percent gasoline. The Legislature adopted incentives to encourage more use of
the 85 percent ethanol blend, which is known as E85.
"I think certainly the ethanol aspect related to our manufacturing sector is
certainly a solid piece of the long-term energy plan in Iowa," Culver said. "Let's
bring everything related to alternative energy and renewable fuels and these
technologies of the future to the state."
Fallon supports an ethanol mandate but would like to see gasoline contain at
least 20 percent ethanol. Fallon's goal is for Iowa, in 10 years, to be producing
from renewable sources the equivalent of the energy the state consumes. Fallon
said he would work to make sure Iowa law allows local farmers and investors to
compete with large, out-of-state agribusiness and energy companies for the
spoils of what he calls the imminent homegrown energy boom.
"It's about establishing a climate for state policy to make sure it's the little guys
who can get a start in this without getting squashed by the utility companies and
Cargills and ADMs," he said.
Blouin said more emphasis should be placed on expanding the availability of E85
than on whether gas at the pump contains 10 percent or 20 percent ethanol. "I
think that leaves you worrying about nickels and dimes," he said.
Culver, Blouin and Fallon favor increasing spending for research and
development of renewable fuel technology. That covers ethanol as well as wind,
solar and biomass, which is energy produced from burning crops such as switch
grass.
However, despite helping invite 11 ethanol production plants to Iowa while he
was the economic development director, Blouin said ethanol is a temporary fix to
the nation's energy needs - until engine technology such as hydrogen becomes
available.
He is critical of Culver's plan, saying it fails to recognize that ethanol may not be
the renewable fuel of choice down the road.
"We've got to be careful not to oversimplify this thing and not lead people to
believe we're going to create tens of thousands of jobs out of ethanol," Blouin
said. "In other words, you can't propose false hope. Ethanol and biodiesel have a
place in Iowa's future for a lot of years to come. But that's going to change."
Culver said Iowa is years away from reaching its potential in producing ethanol.
"We haven't even begun to reach our full potential when it comes to production
and distribution of ethanol," Culver said. "So why worry about the next
generation?"
Federal policy has much more influence than states over energy cost and
regulation, leaving a governor's potential influence "fairly modest," said Iowa
State University economist Neil Harl.
But Harl echoed Blouin's sentiment that ethanol's days as the nation's fuel savior
are numbered.
"Obviously, it's important to Iowa to have a vibrant ethanol industry as long as
there's demand for the product," said Harl, a national expert on the agricultural
economy. "The real issue is that we should not head down a road that in a few
years turns out to be a road less traveled."
In the meantime, Spencer co-op manager Kevin Hartkemeyer said the best thing
the state can do to help his business is to offer incentives to retailers like him,
instead of only to the ethanol producers.
Costs associated with converting his pumps make E85 more expensive to sell,
although he offers it at two of his five stations to support the state's corn
producers.
"It's more of a feel-good effort than a profitable effort," Hartkemeyer said. "If we're
going to have incentives, we ought to be steering them to the end retailer" and
passing them on to the consumer.
Sioux City engineer Sal Mohamed, who is seeking the Democratic nomination for
governor, opposes an ethanol mandate.
Mohamed is on the primary ballot and participates in most candidate forums,
although his campaign has little money or organization.