Clinton campaign studying alternative to U.S. ethanol mandate

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Where Does Clinton Stands on Ethanol Issue?

WASHINGTON/SAN FRANCISCO (Reuters) - Democratic U.S. presidential candidate Hillary Clinton's campaign has solicited advice from California regulators on how to revamp a federal regulation requiring biofuels like corn-based ethanol be blended into the nation's gasoline supply, according to campaign and state officials.

The move is the clearest sign yet that, if elected, Clinton would seek to adjust the regulation, called the Renewable Fuel Standard, possibly hurting her chances in corn-growing states like Iowa where she faces a tough battle against Republican rival Donald Trump in the Nov. 8 election.

The Renewable Fuel Standard, created by Congress in 2005, mandates that transportation fuel sold in the United States contain a minimum volume of renewable fuels.

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It was intended to cut greenhouse gas emissions and expand the U.S. renewable fuels sector while lowering reliance on imported oil. It is opposed by the oil industry and environmentalists and has been criticized as a mere subsidy to corn producers.

Clinton advisers have contacted the California Air Resources Board (CARB) to discuss whether a policy like California's Low Carbon Fuel Standard, a market-based system rather than a mandate, could be applied at a national level to replace or augment the Renewable Fuel Standard, and other issues, CARB officials said.

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A look around Iowa ahead of the caucus
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A look around Iowa ahead of the caucus
DES MOINES, IA - FEBRUARY 01: Supporters of Republican presidential candidate Rand Paul campaign for their candidate on a busy street corner during morning rush hour on February 1, 2016 in Des Moines, Iowa. The U.S. presidential election kicks off today with voters taking part in the Iowa Caucus. (Photo by Win McNamee/Getty Images)
DES MOINES, IA - JANUARY 31: The head of an Uncle Sam eagle sits on a bar stool at the Marriott hotel bar on January 31, 2016 in Des Moines, Iowa. The presidential selection officially kicks February 1 with the Iowa caucuses. (Photo by Justin Sullivan/Getty Images)
COUNCIL BLUFFS, IA - JANUARY 31: (EDITORS NOTE: Image was created with a smartphone.) Campaign buttons sit for sale on January 31, 2016 in Council Bluffs, Iowa. Candidates who are seeking the nominations from the Republican and Democratic Party are touring the state campaigning for votes before the Iowa caucus that takes place on February 1. (Photo by Christopher Furlong/Getty Images)
DES MOINES, IA - JANUARY 30: Cows are seen in a pasture on January 30, 2016 outside of Des Moines, Iowa. Candidates who are seeking the nominations from the Republican and Democratic Party are touring the state campaigning for votes before the Iowa caucus that takes place on February 1. (Photo by Joe Raedle/Getty Images)
DES MOINES, IA - JANUARY 30: An American flag is seen painted on a barn on January 30, 2016 outside of Des Moines, Iowa. Candidates who are seeking the nominations from the Republican and Democratic Party are touring the state campaigning for votes before the Iowa caucus that takes place on February 1. (Photo by Joe Raedle/Getty Images)
SIOUX CITY, IA - JANUARY 30: An old Chevrolet car sits outside an old factory on January 30, 2016 in Sioux City, Iowa. Candidates who are seeking the nominations from the Republican and Democratic Party are touring the state campaigning for votes before the Iowa caucus that takes place on February 1. (Photo by Christopher Furlong/Getty Images)
FENTON, IA - JANUARY 29: The sun sets behind wind turbines which the state uses to create nearly 30 percent of all electricity generated on January 29, 2016 in Fenton, Iowa. Candidates who are seeking the nominations from the Republican and Democratic Party are touring the state campaigning for votes before the Iowa caucus that takes place on February 1. (Photo by Joe Raedle/Getty Images)
FENTON, IA - JANUARY 29: A car is seen in the wall of a shed on January 29, 2016 in Fenton, Iowa. Candidates who are seeking the nominations from the Republican and Democratic Party are touring the state campaigning for votes before the Iowa caucus that takes place on February 1. (Photo by Joe Raedle/Getty Images)
MONONA COUNTY, IA - JANUARY 29: A classic Chevrolet pick-up truck sits a barn adorned by Americana memorabilia on January 29, 2016 in Carrol County, Iowa. Candidates who are seeking the nominations from the Republican and Democratic Party are touring the state campaigning for votes before the Iowa caucus that takes place on February 1. (Photo by Christopher Furlong/Getty Images)
FENTON, IA - JANUARY 29: A pro-life sign is posted in a field on January 29, 2016 in Fenton, Iowa. Candidates who are seeking the nominations from the Republican and Democratic Party are touring the state campaigning for votes before the Iowa caucus that takes place on February 1. (Photo by Joe Raedle/Getty Images)
CARROLL COUNTY, IA - JANUARY 29: A pro-life campaign poster sits in the vast grand plains of Iowa on January 29, 2016 in Carrol County, Iowa. Candidates who are seeking the nominations from the Republican and Democratic Party are touring the state campaigning for votes before the Iowa caucus that takes place on February 1. (Photo by Christopher Furlong/Getty Images)
MONONA COUNTY, IA - JANUARY 29: A poster supporting Republican presidential candidate Ted Cruz sits next to a Nativity scene outside the home of a supporter on January 29, 2016 in Carrol County, Iowa. Candidates who are seeking the nominations from the Republican and Democratic Party are touring the state campaigning for votes before the Iowa caucus that takes place on February 1. (Photo by Christopher Furlong/Getty Images)
DES MOINES, IA - JANUARY 28: Campaign signs regarding ethanol are seen January 28, 2016 in Des Moines, Iowa. Candidates who are seeking the nominations from the Republican and Democratic Party are all over the state looking for votes before the Iowa caucus that takes place on February 1. (Photo by Alex Wong/Getty Images)
DES MOINES, IA - JANUARY 28: A campaign billboard of Republican presidential candidate Jeb Bush is seen January 28, 2016 in Des Moines, Iowa. Candidates who are seeking the nominations from the Republican and Democratic Party are all over the state looking for votes before the Iowa caucus that takes place on February 1. (Photo by Alex Wong/Getty Images)
DES MOINES, IA - JANUARY 28: A giant poster of Republican presidential candidate Donald Trump stands in the backyard of a supporter in West Des Moines on January 28, 2016 in Des Moines, Iowa. Politicians are criss crossing the state looking for votes before the Iowa caucus takes place next week. (Photo by Christopher Furlong/Getty Images)
DES MOINES, IA - JANUARY 27: A sign sits outside the Des Moines headquarters of Republican presidential candidate Donald Trump in West Des Moines on January 27, 2016 in Des Moines, Iowa. Politicians are crisscrossing the state looking for votes before the Iowa caucus takes place next week. (Photo by Christopher Furlong/Getty Images)
CRESTON, IA - JANUARY 22: A man stands outside the headquarters for Democratic presidential candidate Bernie Sanders on January 22, 2016 in Creston, Iowa. Sanders, who is seeking the nomination from the Democratic Party is on the presidential campaign trail across Iowa ahead of the Iowa Caucus taking place February 1. (Photo by Joshua Lott/Getty Images)
URBANDALE, IOWA - JANUARY 22: Marsha Schoolcraft from Helotes, Texas, Mary Elizabeth Jackson from Tyler, Texas, and David Carter from Temple, Texas (L-R), all volunteers, phone bank at the campaign headquarters of Ted Cruz on January 22, 2016 in Urbandale, IA. The Democratic and Republican Iowa Caucuses, the first step in nominating a presidential candidate from each party, will take place on February 1. (Photo by Brendan Hoffman/Getty Images)
DES MOINES, IOWA - JANUARY 22: Pictures of Hillary Clinton adorn the wall in her campaign headquarters on January 22, 2016 in Des Moines, IA. The Democratic and Republican Iowa Caucuses, the first step in nominating a presidential candidate from each party, will take place on February 1. (Photo by Brendan Hoffman/Getty Images)
DES MOINES, IOWA - JANUARY 22: Stella Tsantekidou, 21, volunteers at the campaign headquarters of Bernie Sanders on January 22, 2016 in Des Moines, IA. The Democratic and Republican Iowa Caucuses, the first step in nominating a presidential candidate from each party, will take place on February 1. (Photo by Brendan Hoffman/Getty Images)
JOHNSTON, IOWA - JANUARY 22: A memorial dedicated to military veterans outside the public library on January 22, 2016 in Johnston, Iowa. The Democratic and Republican Iowa Caucuses, the first step in nominating a presidential candidate from each party, will take place on February 1. (Photo by Brendan Hoffman/Getty Images)
DES MOINES, IA - NOVEMBER 16: A political billboard features Republican presidential candidates (L-R) Sen. Marco Rubio (R-FL), Jeb Bush and Sen. Ted Cruz (R-TX) and paid for by Nextgen Climate Action Committee is seen November 16, 2015 in Des Moines, Iowa. Iowa will hold its caucus on February 1, 2016, the first in the primary season. (Photo by Alex Wong/Getty Images)
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Mary Nichols, head of the CARB, said she discussed the state's regulations with Clinton advisers.

While a backer of the Low Carbon Fuel Standard, Nichols said she told Clinton's advisers they could avoid political backlash by focusing on other carbon-reduction strategies instead, such as expanding electric vehicle sales and cleaning up emissions from coal-fired electricity.

Nichols did not provide further details on the discussions.

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A Clinton campaign official, who asked not to be named, confirmed the discussions with CARB but gave no further details.

A campaign spokesman, Tyrone Gayle, said the campaign has been seeking advice from "a diverse set of stakeholders." He added that the Clinton campaign "does not support replacing the RFS with a national low-carbon fuel standard" but did not elaborate.

Former Obama administration climate and energy adviser Heather Zichal said on the sidelines of the Democratic National Convention in Philadelphia last week that the Renewable Fuel Standard was broken, but that a Clinton administration could make "modifications" to fix it.

"Mandates aren't necessarily a perfect way to regulate," Zichal said at the event.

The U.S. corn lobby hopes to convince both Clinton and Trump to uphold the regulation, which requires a doubling of U.S. biofuels use to 36 billion gallons per year by 2022, when congressionally mandated volume targets are set to expire. The program is designed to last indefinitely after that.

Environmentalists, anti-hunger activists and the oil sector have called for the rule to be repealed or changed because they say it raises food and fuel costs without delivering the emissions reductions that it was intended to achieve.

MARKET-BASED SYSTEM

The California regulation, a key part of the state's effort to combat climate change, requires a 10 percent reduction in the carbon intensity of transportation fuels by 2020, but leaves it up to companies to decide how to reach that target.

California enacted the Low Carbon Fuel Standard in 2007 targeting oil refiners and distributors that sell in the state's market. It angered Midwestern ethanol interests because the regulation counts the carbon dioxide footprint of transporting biofuels into the state for blending, effectively blocking many of those imports. Oil companies have complained that the regulation is costly.

Clinton in May expressed support for the federal Renewable Fuel Standard in an opinion piece published in an Iowa newspaper, but said it could be improved.

Clinton's openness to overhauling the Renewable Fuel Standard appears to contrast with Trump's position. During the state-by-state battle for the Republican presidential nomination, Trump said he supported the biofuel mandates set out in the Renewable Fuel Standard.

Corn and ethanol industry lobbyists said they have been talking with both the Clinton and Trump campaigns to argue in favor of the Renewable Fuel Standard.

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