Tell us about your experiences with Marketplace. Enter To Win

Ted Cruz wins Iowa despite corn ethanol opposition

Annie Baxter Feb 2, 2016
HTML EMBED:
COPY
People cheers as Republican presidential candidate Sen. Ted Cruz (R-TX) is declared the winner at the caucus night gathering at the Iowa State Fairgrounds on February 1, 2016 in Des Moines, Iowa. Christopher Furlong/Getty Images

Ted Cruz wins Iowa despite corn ethanol opposition

Annie Baxter Feb 2, 2016
People cheers as Republican presidential candidate Sen. Ted Cruz (R-TX) is declared the winner at the caucus night gathering at the Iowa State Fairgrounds on February 1, 2016 in Des Moines, Iowa. Christopher Furlong/Getty Images
HTML EMBED:
COPY

Ted Cruz’s victory in the Iowa Republican caucus was far from certain, but not just because of strong competition from rival Donald Trump. Iowa’s corn industry has benefited a lot from a decade-old law requiring that renewable fuels, largely corn ethanol, be blended with gasoline. And Cruz is no fan.

His opposition to the Renewable Fuel Standard drew a lot of fire in the state. But he’s not its only detractor.

“The Renewable Fuel Standard is essentially an income redistribution system,” Vince Smith, economics professor at Montana State University, said. 

Though corn prices are low today, ethanol pushed up demand for corn, boosting prices and making livestock feed more expensive. Smith said as a result of the Renewable Fuel Standard, American consumers have paid more for food, while a limited number of farmers benefit. 

Others decry ethanol’s environmental effects, arguing corn ethanol production involves significant greenhouse gas emissions. 

“It’s actually worse for the climate than gasoline,” Emily Cassidy said, research analyst with the Environmental Working Group. “And it also increases the amount of pollutants that get into water by increasing fertilizer use.” 

Despite a push from parties ranging from environmentalists to big oil companies, the Environmental Protection Agency recently declined to lower the biofuels requirements.

Ethanol proponents maintain that it is helping America reduce its dependence on foreign oil sources. What’s more, a lot of infrastructure has built up around ethanol, which some don’t want to see go to waste. 

“We’ve put a lot of effort into this industry already,” said Bruce Schmoll, a corn producer near Claremont, Minn. “And to just let it dry up on the grapevine, so to speak, I think that’s a poor way to go.”

Marketplace is on a mission.

We believe Main Street matters as much as Wall Street, economic news is made relevant and real through human stories, and a touch of humor helps enliven topics you might typically find…well, dull.

Through the signature style that only Marketplace can deliver, we’re on a mission to raise the economic intelligence of the country—but we don’t do it alone. We count on listeners and readers like you to keep this public service free and accessible to all. Will you become a partner in our mission today?

Your donation is critical to the future of public service journalism. Support our work today – for as little as $5 – and help us keep making people smarter.