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Rising fuel costs stoke ethanol politics

Rising gasoline costs and outrage at the pumps have turned ethanol into a popular campaign issue in states electing governors this year, especially in the Midwest
/ Source: The Associated Press

Rising gasoline costs and outrage at the pumps have turned ethanol into a popular campaign issue in states electing governors this year, especially in the Midwest.

Both the Democratic and Republican candidates in Ohio say a key piece of their plans for reviving the farm economy is in alternative fuels made from the state's two top cash crops -- corn and soybeans.

South Dakota Gov. Mike Rounds, who is seeking a second term, promises to expand ethanol production. Even in Florida, where corn is hardly a major crop, two candidates for governor have suggested that tax incentives could speed up ethanol production.

The climbing gas prices and new energy regulations that have U.S. refiners clamoring for more ethanol have provided the catalyst for more investment this year in the fuel additive made from fermented corn.

The number of ethanol plants -- now at 101 -- has doubled nationally since 1999, according to the Renewable Fuels Association. There are 41 new or expanded ethanol plants under construction.

Ohio does not have any corn-based ethanol plants operating now, though there are dozens of plants in other Midwest states.

Democrat Ted Strickland wants to invest $250 million each year on developing renewable energy sources, including corn-based ethanol and biodiesel made from soybean oil.

The money would come from tax-free bonds, and both big companies and farmers would have a chance to invest it in new ethanol plants. "I would like our corn producers to become owners and operators of ethanol facilities," Strickland said.

Farmers struggling with high production costs and low commodity prices hope that new ethanol plants will help increase corn prices.

"We think it can have a tremendous impact" said Joe Logan, a northeast Ohio farmer from Kinsman who also is president of the Ohio Farmers Union. "When you look at agriculture these days, the prospect for prosperity is rather minuscule."

Republican Ken Blackwell said changes must be made to streamline the regulatory process that potential ethanol plant operators must wade through. "What you find is that it's a permit and regulatory quagmire," he said.

In Iowa, Republican Jim Nussle has put the promotion of ethanol at the top of his campaign. Democrat Chet Culver has proposed a $100 million fund to attract more private investment in renewable fuels.

"The focus of our economic development efforts will be renewable energy," Culver said at a debate in February.

Iowa, the nation's top corn producing state, also accounts for the biggest share of the nation's ethanol production. "Ethanol is a big issue for not just the farmers in our state but all Iowans," said Don Peterson, a lobbyist with the Iowa Farm Bureau.

Plants provide jobs for farmers and those living in small towns, he said.

Another hot issue in rural Ohio is the increasing number of large-scale farm operations, some of which have pitted neighbor against neighbor over worries about odors and pollution.

Blackwell thinks technology is improving enough to deal with those concerns without halting the construction of new farms or shifting oversight away from the state agriculture department back to the Ohio Environmental Protection Agency.

"Farmers and I don't want either to happen," he said.

Strickland said that while he understands the benefits of large-scale farming, more needs to be done to protect those living near the farms. "We can find a balance," he said. "There needs to be an effort to keep intolerable conditions from developing."

Winning Ohio's rural vote could go a long way toward getting elected on Nov. 7.

Conservatives in small towns and the farming belt in western Ohio came out in huge numbers for President Bush two years ago and were a key to his victory in the state, which gave him another four years in the White House.

Although residents in rural Ohio tend to vote Republican as a whole, Democrats think they can capture more votes this year because Strickland doesn't fit the mold of their past candidates.

He grew up in southern Ohio on a 20-acre farm. His family raised chickens and butchered pigs in the fall for meat. He supports the rights of gun owners. He says he understands what it's like to live in the country.

"It helps me develop a connection with people," Strickland said of his background. "It conveys that I have an appreciation for people who work the earth."

Blackwell, a native of Cincinnati, won strong support in the state's farm belt in the Republican primary in May against Jim Petro. In Mercer County, for example, Blackwell captured two out of three votes.

"Farmers are conservative," Blackwell said. "They know a genuine conservative when they see one or hear one."

He said they see eye to eye on both economic and social issues and that he is at ease talking with farmers about foreign trade, taxes and the Bible.

"We relate on a whole host of things," Blackwell said. "I ride horses, I shoot guns, I fish."