Tsunami: Top 10 Impacts for biofuels from US Elections

In Washington, US voters gave control of the House of Representatives to the Republican Party, when Democrats lost at least 57 seats in the House and six Senate seats in the 2012 mid-term elections.

It was the worst drubbing for a first-term President since voters took 77 House seats away from Warren G. Harding’s Republicans in 1922.

Also, California voters rejected attempts to roll back climate change legislation by defeating Proposition 23, and Democrats retained control of the Senate.

But what does it mean for biofuels? We’ll have a roundup of industry opinion in tomorrow’s Digest, when we have complete results from some of the tighter races around the country. Plus, Mike McAdams, president of the Advanced Biofuels Association, will brief us at Advanced Biofuels Markets in San Francisco next week. But 10 impacts — ranging from people to policies —  can be seen even now.

1. The bottom line: moderately positive for biofuels. One of the few areas where Republicans and Democrats agree on priorities is the importance of reforming US energy policy, and biofuels enjoy bipartisan support, especially advanced biofuels.  Though the Farm Bill may push to 2013, and gridlock may reign, Obama will have to run on something other than health care and the 2009 stimulus, and is likely to reach out on energy.

2. The Dearly Departed. One of the most important casualties of the night was Senate Agriculture chairman Blanche Lincoln of Arkansas. Strong ethanol supporters Stephanie Herseth-Sandlin of South Dakota, Earl Pomeroy of North Dakota and Debbie Halvorson of Illinois were among Democratic casualties, while algal fuels leader Harry Teague lost his seat in New Mexico.

3. Among the survivors. The leadership of the House Algae Energy Caucus, Brian Bilbray of California and Jay Inslee of Washington, sailed through this election cycle. Senator Chuck Grassley faced only token opposition, and Senator John Thune of South Dakota was unopposed. Jerry Moran of Kansas moved up successfully from the House to the Senate. Rick Perry, who requested that the EPA waive the Renewable Fuels Standard in 2008, was elected to a third term as Governor of Texas, while Sam Brownback, a staunch friend of bioenergy while in the Senate, becomes the new Governor of Kansas. Leonard Boswell of Iowa survived a challenge to his House seat from Brad Zaun, who had opposed the biodiesel tax credit extension.

4. Among the new faces. John Hoeven, the incoming Senator from North Dakota, was a strong proponent of E15 ethanol while Governor, and was sharply critical of foot-dragging at EPA on the issue.

5. Committee leadership changes. With the changeover in power, expect Frank Lucas to assume the reigns in the House Agriculture Committee, where he will put more pressure on the EPA through oversight hearings. Michigan’s Debbie Stabenow may take the reigns as Senate Ag chair from Lincoln. The House Energy & Commerce committee gavel will pass from California liberal Henry Waxman to Texas conservative Joe Barton.

6. Cap and trade. Dead as a doornail.

7. Ethanol tax credit. Full-court pressure will now be on to pass the ethanol tax credit before a huge freshman class of spending-wary House members come to Washington. With time pressure, ethanol proponents will take less of a hard line, and look for the ethanol tax credit to drop to 36 cents or lower.

8. A more liberal Democratic Caucus. Though Democrats may be chastened into a change of outlook, the election defeats fell in far greater numbers on the conservative Blue Dog Democrats than old-time liberals. Of the 54 members of the House Blue Dog coalition in this Congress, only 23 will return (with six seats undecided). Five left the House, and at least 20 were defeated in the election. The Blue Dogs are generally more hawkish on energy security and come from rural districts, and were solid biofuels supporters.

9. The Presidential sweepstakes opens today. Leading contenders at this early stage are Mike Huckabee of Arkansas, Mitt Romney of Massachusetts, Sarah Palin of Alaska and Newt Gingrich of Georgia. John Thune of South Dakota is expected to make a run. In exit polling last night, Iowa Republicans gave 21 percent of their votes to Huckabee and Romney, 18 percent to Palin and 7 percent to Gingrich.

10. Opportunities for bi-partisanship. Incoming House Speaker John Boehner has pledged to restore regular orders to the House, to prevent episodes like the arrival of the text of the House climate bill at the 11th hour. “Leaders overreach because the rules allow them to,” Boehner said in a speech this fall. “Legislators duck their responsibilities because the rules help them to,” he said. “And when the rules don’t suit the majority’s purposes, they are just ignored.”

On voters minds

According to exit polls, one voter in three said that they voted to express opposition to President Obama’s policies. Though 40 percent said that they they were worse off now on a financial basis than in 2008, only a minority said that the government should do more.

Last words

Third last word: Now we can build a unique California industry that enriches the state as aerospace and high technology did…There is only one major industry in the world today that is poised for major growth, and that is clean technology, which includes renewable energy. California must take and keep the lead in this fast-growing industry.” – Riggs Eckelberry, CEO, OriginOil, commenting on the defeat of California’s Proposition 23.

The second last word: “We’ve come to take our government back.” – Senator-elect Rand Paul of Kentucky

The Last Word. “In 2008, the story was the switch from red to blue. Tonight, red is the color of change, a sea of red.” – John King, CNN