McCain, Obama contrast on federal help for ethanol

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By Fred Love | Tuesday, October 7, 2008 8:17 PM CDT | () comments

DES MOINES — With one candidate in favor of federal subsidies for ethanol producers and one against, the outcome of this year’s presidential election could leave a lasting impression on Iowa’s ethanol industry.

The industry has battled volatile corn prices throughout the summer, and an elimination of the federal support for ethanol that helped spark unprecedented growth in the industry a few years ago could be enough to push some Iowa plants out of business, said Chad Hart, an assistant professor in agricultural economics at Iowa State University.

“My guess is we would see several more plants shutter down if we didn’t have those supports,” Hart said.

Democratic nominee Barack Obama, an Illinois senator, has supported the government subsidies and protection that have helped the ethanol industry grow leaps and bounds in years past.

Republican candidate John McCain, a senator from Arizona, has opposed government help for the industry and instead emphasizes free markets and competition in his approach to ethanol.

McCain thinks the industry has received enough government help and should be able to thrive on its own, said Wendy Riemann, a spokeswoman for McCain’s campaign.

McCain still envisions an important role for ethanol in the country’s energy future, Riemann said, and he doesn’t intend to abandon the fuel.

“John McCain supports ethanol, but he’s opposed to government subsidies because he thinks it can stand on its own through the competitive market,” she said.

Government support through tariffs, subsidies and other protections put other developing renewable energy sources at a disadvantage, she said.

“He doesn’t want the government to pick a winner, in essence,” Riemann said. “Let the free market do its thing and treat everyone equally and compete in the market.”

Obama’s experience representing a leading agricultural and corn-producing state has positioned him as an authority on the benefits of ethanol, which is derived from corn, Obama campaign spokesman Brad Anderson said.

“Sen. Obama’s been a longtime supporter of ethanol, and his strong support will continue,” Anderson said. “Ethanol should continue to play an important role in increasing our fuel supply.”

He said Obama will continue to push for ethanol subsidies and government protection if elected, but Anderson added that corn-based ethanol is paving the way for more advanced renewable fuels such as cellulosic ethanol that may become more important to the country’s energy outlook.

Anderson said ethanol has proved its worth by reducing the country’s dependence on imported oil and reducing automobile emissions.

“Abandoning ethanol subsides would not only cost the state of Iowa thousands of jobs, but it just makes no sense for our energy security,” Anderson said.

Iowa Republicans may chafe at McCain’s opposition to federal support for ethanol, especially in a state where support for the industry receives bipartisan backing, Hart said.

But Sen. Thurman Gaskill, R-Corwith, said he supports McCain, despite Gaskill’s longtime backing of the ethanol industry.

“I think the industry can survive without the subsidies, but it may not grow as fast,” Gaskill said.

He said rising corn and oil prices represent more serious threats to Iowa’s ethanol plants than losing federal support. He added McCain brings other agricultural strengths to the table, such as a willingness to open up more foreign markets to Iowa crops.

Fred Love can be contacted at

(515) 243-0138 or fred.love@lee.net. Comment on this story at qctimes.com.