Energy Could Boost Thune in Iowa

Energy reform may be in flux on the congressional agenda next year now that Republicans will control the lower chamber and are unlikely to make it a priority. But the issue could help some lesser known potential GOP presidential contenders break from the pack as the primary race develops next year.

"If gas prices go above $3, energy will be an issue," Iowa Republican Sen. Charles Grassley said of the upcoming presidential race.

The average cost across the country for a gallon of gasoline is currently $2.98, according to the Energy Information Administration, and prices are on the rise.

Current leading contenders in Iowa like former Alaska Gov. Sarah Palin, former Arkansas Gov. Mike Huckabee and former Massachusetts Gov. Mitt Romney have shorter records on energy and renewable energy production than potential dark horses who could be threats for the nomination. In Iowa, the first contest in the GOP nomination fight, the issue could energize South Dakota Sen. John Thune's likely campaign, as well as those of Govs. Mitch Daniels of Indiana, Haley Barbour of Mississippi and Tim Pawlenty of Minnesota.

Iowa, like neighboring South Dakota, has a large market for ethanol producers, and Thune has been proactive in seeking to extend ethanol tax credits. He also added to the 2008 farm bill reauthorization of the Biomass Crop Assistance Program, which routed funding from the Department of Agriculture to production centers that convert plant material into energy and fuel. Thune also supports opening part of the Arctic National Wildlife Refuge for oil exploration.

"Other than John Thune, I don't know where any of them stand on energy or ethanol," Grassley said, referring to his Senate colleague's slate of potential opponents in the GOP race.

Doug Gross, who served as former Massachusetts Gov. Mitt Romney's Iowa campaign chairman in 2008, warned in an interview that energy isn't as high on the priority list as it was during the lead-up to the last race.

But, Gross said, "If energy is an economic security issue next year, then it becomes red hot. But if it's just academic, then it will be left to political parlor games."

He added that if it becomes a factor in the race, it will play to Thune's strengths and suggested that the senator may be the only candidate who can campaign on it successfully.

Since the last presidential race, the allure of ethanol has subsided some: Crop prices that go into it have increased, ethanol producers have lost money and the production has caused deforestation. Thune supporters, however, note that he has sought to bolster the product to encourage the next generation of biofuels, and that his energy portfolio is expansive and extends far beyond biofuels.

The senator said in a brief interview that some bipartisan reforms on energy can be achieved next year if the White House shows a willingness to move forward, and he hopes to take an active role in those deliberations. Such a role could boost his presidential prospects if the upper chamber considers moving legislation.

Barbour and Daniels, meanwhile, boast of their records in attracting energy producing companies to their states in recent years, and Barbour enhanced his reputation earlier this year in the wake of the BP oil spill in the Gulf of Mexico. Pawlenty actively pursued a "clean energy strategy" as governor.

Among the more well-known trio of Huckabee, Palin and Romney, Palin stands out, strategists on both sides of the aisle say, for her reputation of standing up to oil companies when she served as governor.

For his part, Huckabee supported mandatory cap-and-trade in late 2007 when he was running for president, as did the eventual nominee, Arizona Sen. John McCain. Huckabee changed his position in October of 2009 via a blog post on his political action committee's Web site.

Huckabee complained that small businesses would shoulder the biggest tax burden imposed by the system and noted, "The effect on the American economy will be catastrophic."

As for Romney, Gross - his former Iowa strategist - noted that the candidate was not comfortable with the energy issue during the last campaign.

Romney devoted a chapter of his recent book, No Apology, to current energy policy and approached the issue from a national security standpoint. He mentioned that he considered joining Massachusetts to a regional cap-and-trade program that would cap carbon dioxide for electric utilities but ultimately decided against it when manufacturers in his state complained that it would raise their rates by 30 percent.

The Bay Stater noted that he has previously supported ethanol subsidies, but he called subsidies "a hidden form of energy tax." He labeled a direct oil or carbon tax a nonstarter and lamented that automotive mandates can't make a meaningful difference given the wide variety of energy consumers and carbon dioxide emitters.

Romney wrote that he's open to a tax swap program originally proposed by Greg Mankiw, an economist who advised President George W. Bush. The program would impose gas or carbon taxes on producers while reducing their payroll taxes, and Romney said he's open to exploring its potential.

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