March 7, 2015 / 11:16 PM / 3 years ago

U.S. Republican hopefuls Bush, Walker change their tune on ethanol

WASHINGTON (Reuters) - Potential Republican presidential candidates Jeb Bush and Scott Walker told Iowa voters on Saturday that they supported government policies to boost ethanol use, a change in position that could help their prospects in the corn-growing state.

Speaking at an agricultural forum in Des Moines, the two White House hopefuls said a 2007 law requiring ethanol use should be kept in place despite their general distaste for subsidies and mandates. Both have criticized supports for the corn-based fuel in the past.

“The law that passed in 2007 has worked for sure,” said Bush, a former Florida governor.

The shift illustrates the competing pressures that candidates in the 2016 election will have to navigate in coming months.

The so-called Renewable Fuel Standard requires motor fuel producers to use an ever-increasing amount of ethanol and other renewable fuels in an effort to boost U.S. energy production.

Automakers and oil producers say it drives up costs and risks damaging vehicles, and the Obama administration has failed to implement it in recent years.

Conservative groups - and some potential candidates - decry it as a boondoggle.

“I don’t think Washington should be picking winners and losers,” said Texas Senator Ted Cruz.

The mandate has helped build a thriving industry in Iowa, now the No. 1 ethanol-producing state.

Producers are planning a multimillion-dollar campaign to pressure candidates to support it ahead of Iowa’s first-in-the-nation contest in February 2016.

The ethanol mandate is not likely to be a front-burner issue but could help voters decide whom to support, said Monte Shaw, head of the Iowa Renewable Fuels Association.

Ethanol likely could stay at 10 percent of the U.S. fuel supply without the mandate but would have trouble growing above that level, analysts say.

Nationwide, 54 percent of Americans think the government should subsidize ethanol producers, according to Reuters/Ipsos polling. It is less popular among Republicans - only 46 percent support ethanol subsidies.

Neither Bush nor Walker, the Wisconsin governor, have weighed in specifically on the Renewable Fuel Standard before.

Walker opposed a similar state mandate as a candidate for governor in 2006. Bush has criticized ethanol subsidies more broadly on several occasions.

Both said the existing law will be needed for the next few years at least but that they hoped to do away with it eventually.

“It’s something I‘m willing to go forward on, continuing the Renewable Fuel Standard,” Walker said.

Additional reporting by Kay Henderson in Des Moines; editing by Matthew Lewis

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