The rise and fall of ethanol
Barack Obama’s ethanol repositioning May 4 on NBC’s “Meet the Press” means that two of the three major presidential candidates can now be expected to rethink the U.S. government’s ethanol policies if elected. Even Hillary Clinton has edged closer to reason on the subject. It only took food riots around the world, surging domestic food prices and a summer gasoline crunch to cause the Democratic presidential front-runner to loose himself from the ethanol lobby.
“What I’ve said is, my top priority is making sure people are able to get enough to eat,” Mr. Obama told Tim Russert on NBC’s “Meet the Press” when asked about the connection between rising food and energy prices and U.S. ethanol policies. “If it turns out we need to make changes in our ethanol policy to help people get something to eat, that has got to be the step we take.” Mr. Obama then inched oh-so-close to a firmer commitment to the needed ethanol jettisoning. “We have rising food prices around the United States. In other coun- tries, we’re seeing riots because of the lack of food supply, so this is something we’re going to have to deal with,” he said.
That sounds a new note for Mr. Obama. Previously, like almost every other major presidential candidate who ever passed through ethanol-enamored Iowa, the candidate had toed much closer to the ethanol lobby’s line. For instance, speaking at the christening of a new ethanol plant in Charles City, Iowa in August, Mr. Obama spoke grandly of the fuel’s contributions to the United States and pledged it a role in his energy policy. Ethanol is “one of the biggest success stories in American manufacturing,” Mr. Obama said. A comprehensive energy policy would need to be multifaceted, he said. He pledged that “one part of that plan has to be ethanol.” Long live King Ethanol.
So, Mr. Obama joins Republican John McCain as a critic, though something of a ginger critic, of the impact on rising food and energy prices. In fairness, Mr. Obama is not unusually pander-prone on this sub- ject. Mr. McCain is simply the exception that proves the rule. His opposition to ethanol subsidies, which pre-dates his 2000 presidential candidacy, normally would have torpedoed his viability if this primary season were more conventional. Mr. McCain placed a distant third behind Mike Huckabee and Mitt Romney in the Jan. 3 Iowa caucus, in part because of his ethanol record. It is most unusual for a candidate to survive such a poor performance in Iowa. But owing to a quirky primary season, the anti-ethanol candidate has a chance. It is one of his few compelling economic calling cards.
Even Hillary Clinton has been repositioning on the subject amid rising food and energy prices. She seems to be sticking closer to the ethanol lobby than Mr. Obama. Speaking on ABC’s “This Week,” Mrs. Clinton said that the issue needs closer review. But she did not commit to any policy that would be anathema to the lobby. “What we need to do is accelerate the research into farm waste and into other cellulosic plant materials,” she said, “because, I think, instead of using the corn, let’s figure out if we can use the corncob. Let’s figure out if we can use the cornstalk. Let’s figure out what other kind of food, you know, waste we can use.” She then signaled a strange new respect for ethanol’s negative impact on prices: “In the short run, we’ve got to work with our farmers and with like-minded people around the world to figure out how this increasing use in biofuels, which is part of our answer to our dependence on foreign oil, does not undermine food production and really accelerate the prices.” Will Mrs. Clinton be able to run this gauntlet? Public interest will recede the moment food and gas prices stop climbing steeply.
But, there is good news here. Both John McCain and Mr. Obama can now be rightly accused of welching on a campaign promise in the event that either should refuse to fix the disaster that is the U.S. ethanol subsidy. It would surely be a bigger welch from Mr. McCain, however, whose record on the subject is extensive.