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Huntsman Once Had Business Reasons to Oppose Ethanol Subsidies

Huntsman Once Had Business Reasons to Oppose Ethanol Subsidies

By Scott Conroy - June 8, 2011


Former Utah Gov. Jon Huntsman did not mince words in New Hampshire on Saturday when he explained why he didn't intend to compete in the Iowa caucuses. "I don't believe in subsidies that prop up corn, soybeans," he said. "I think they destroy the global marketplace."

What Huntsman did not mention was that his opposition to ethanol subsidies goes back over a decade to the time when he was vice chairman of the Huntsman Corp., a global chemical company founded by his father, Jon Huntsman Sr.

In 1997, the Huntsman Corp. made a $600 million purchase of a Texas plant that produces methyl tertiary butyl ether (MTBE, a gasoline additive used to increase octane and help make gasoline burn more cleanly). MTBE is a direct competitor to ethanol -- since both chemical compounds are used to oxygenate gasoline -- but has fallen out of favor in recent years, as it has been targeted by the Environmental Protection Agency and state legislatures over possible health and environmental concerns.

But in the late 1990s, with its purchase of the Texas plant, the Huntsman Corp. more than doubled its MTBE production capacity and became the nation's second largest producer of the volatile chemical compound.

"This acquisition goes a long way toward realizing the goal of doubling our product capacities, sales and revenues by the end of the year 2000," Huntsman told the Salt Lake Tribune as the deal was being finalized in December 1996.

In subsequent years -- Huntsman remained a senior executive at the family business until 2004 -- the company became increasingly vocal in criticizing federal ethanol subsidies. Huntsman's younger brother Peter called ethanol a "feel-good alternative" energy source in remarks he made as CEO of the family business in 2000.

Huntsman's Republican opponents might seek to make an issue of whether his past business interests played a role in cultivating his anti-ethanol stance, but a central tenet of the Huntsman Corp.'s argument is solid conservative dogma, and one that might find traction in these days of the tea party: The company has long pointed out that while ethanol requires an expensive government subsidy, MTBE does not.

As for any direct conflict of interest on the part of Jon Huntsman himself, according to a spokesperson, his stake in the family business was kept in a blind trust after he left the company in 2004 before it was divested in 2005 -- the year he was sworn in as governor.

"Governor Huntsman has said he supports reducing energy and agriculture subsidies because they distort the global marketplace," Huntsman spokesperson Tim Miller told RCP. "His private sector experience growing a company and creating jobs is not inconsistent with that."

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Scott Conroy is a national political reporter for RealClearPolitics. He can be reached at sconroy@realclearpolitics.com. Follow him on Twitter @RealClearScott.

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