Just about everything anyone needs to know about the politics of fuel ethanol appears in this statement by Marlys Popma, executive director of the Republican Party of Iowa, as quoted recently in the New York Times:
"Ethanol is just hugely important in Iowa because it drives up of the price of corn."
Popma offered this observation to explain why support of ethanol as a gasoline additive represents the price of entry in the important Iowa presidential caucuses.
What an uproar there would be if a political leader from Texas justified a political calculus on the basis of its ability to drive up the price of oil.
In the US, it is politically acceptable to artificially elevate the price of food but not of oil.
Ethanol is on a roll. It always benefits from political hysteria over energy.
A bipartisan House bill introduced last month would mandate sales of reformulated gasoline containing oxygen throughout the US, even in areas untroubled by ozone or carbon monoxide pollution. With methyl tertiary butyl ether in environmental eclipse and other oxygenates ineligible for anything like ethanol's 54¢/gal tax subsidy at the federal level and other favors from farm states, this would be very good for ethanol.
It would be terrible for motorists and taxpayers. But who cares as long as it drives up the price of corn in Iowa?
House Speaker Dennis Hastert (R-Ill.), one of the bill's sponsors, opined that the bill, by making gasoline specifications more uniform than they are now across the nation, would lower fuel costs by 12¢/gal "over the long run."
No way. Not if all that oxygen came from ethanol.
The substance costs an average of $1/gal to make from grain, for heaven's sake. It requires special handling. Its federal subsidy shorts the National Highway Fund. It raises gasoline octane but reduces fuel-use efficiency.
And, in view of the Iowa Republican leader's observations about ethanol's political importance, it raises the price of food. But no one is supposed to care.
The Bush administration did its part for ethanol, too. As the oxygen-mandate bill was being filed, the Transportation Department circulated a draft report recommending that federal support for ethanol continue.
No politician from either party can afford to be outrun in support for ethanol. The Iowa caucuses are too important.
There are reasons to add ethanol to gasoline. Octane and oxygen-where oxygen in gasoline is necessary-are the most important ones.
But there is no reason outside of politics to broadly mandate something so heavily subsidized.
Ethanol has a death grip on US politicians. And it's getting tighter.