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Reuters
In Iowa, candidates love ethanol, at least out loud
Friday January 16, 11:59 am ET
By Charles Abbott

WASHINGTON, Jan. 16 (Reuters) - In Iowa's presidential caucuses, corn-based ethanol is the issue everyone knows is there even if they don't want to talk about it.

Ethanol is embraced by Iowans as a home-grown renewable fuel and as a burgeoning way to bring industrial jobs and economic diversification to the agricultural heartland. Already the No. 1 U.S. corn (maize) state, Iowa is poised to become the leading ethanol distiller this year.

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"We're staking a lot of our faith in the future of agriculture on renewable energy," Iowa Farm Bureau President Craig Lang said in an interview. He described renewable energy as one of the top five issues in the caucuses.

But there was little discussion of ethanol ahead of Monday's neighborhood meetings that initiate the presidential nominating process.

"It's almost a given that a candidate will not come into Iowa and be opposed to ethanol, at least not publicly," said agricultural economist Neil Harl of Iowa State University.

This year's field of Democratic candidates justify that faith. The vary only in their degree of support.

Howard Dean and Richard Gephardt are the most vocal, saying they would guarantee ethanol a 10 percent share of the market for motor fuels. That would be triple the share proposed in energy bill pending in Congress -- 5 billion gallons (19 billion liters) by 2012, or 3.5 percent.

WON'T MOVE ENERGY BILL

For all the attention that Iowa brings to ethanol, the caucuses are not certain to give impetus for the energy bill, now stalled by a filibuster in the Senate. Foes say they cannot accept a provision that would shield makers of fuel additive MTBE, an ethanol rival, from defective-product lawsuits.

American Farm Bureau Federation (News - Websites) President Bob Stallman said there were "so many other factors around the energy bill" that offset ethanol's popularity in the Senate. Budget hawks like Arizona Republican John McCain say the bill is larded with corporate giveaways. Others say the bill is too timid in encouraging development of wind, solar and alternative energy.

And a few senators from the East and West coasts say the mandate to use ethanol is an undeserved sop to the Midwest.

The Bush administration, also eager to win farm state votes in the November election, has repeatedly endorsed the so-called renewable fuels standard for ethanol. In the 2000 presidential election, Democrat Al Gore narrowly won the state.

With six plants under construction, Iowa would have the capacity to produce 830 million gallons (31.5 billion litres) a year of ethanol from 16 plants by the end of 2004, edging ahead of long-time leader Illinois, which can distill about 800 million gallons (30.4 billion litres).

"They (ethanol plants) are truly economic development engines," said Monte Shaw, spokesman for the pro-ethanol Renewable Fuels Association.

An average size ethanol plant employs 40 to 50 workers, a boon to small towns, which often fight to maintain population. Farmer-owned ventures control nearly 40 percent of U.S. ethanol capacity.

Archer Daniels Midland Co. ((NYSE:ADM - News)), based in Decatur, Ill., is the largest producer, with an annual capacity of 1.07 billion gallons. There are more than 70 ethanol plants in 20 states, RFA says, producing 2.75 billion gallons this year.