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Daugaard Urges Trump to Protect Biofuels Subsidy

Donald Trump’s pick of anti-ethanol Scott Pruitt to head the EPA has prompted Governor Dennis Daugaard to join his fellow corny state execs Terry Branstad of Iowa and Pete Ricketts of Nebraska in penning a letter to the President-Elect softly begging him not to nuke biofuels:

Daugaard, Branstad, and Ricketts, letter to Trump on behalf of Governors' Biofuels Coalition, 2016.12.09
Daugaard, Branstad, and Ricketts, letter to Trump on behalf of Governors’ Biofuels Coalition, 2016.12.09

Daugaard, Branstad, and Ricketts are all members of Trump’s thus far silent agricultural advisory committee. Branstad is the Führer’s pick for ambassador to China. Ricketts’s brother Tom, co-owner of the Chicago Cubs, has won Trump’s nod for deputy commerce secretary. Daugaard is the only letter writer here not to receive some plum Trump patronage.


  1. Loren 2016-12-11

    Wouldn’t that go against Trump’s apparent shift to the oil and coal folks? Exxon CEO, Oklahoma climate change denier… Ring a bell?

  2. OldSarg 2016-12-11

    If a burger joint sells a burger for less than it cost to make the burger, they go out of business. If a hardware store doesn’t have what the customers need, they go out of business. If a doctor provides poor care, they go out of business.

    Energy is a business. Why in every other case do we not offer these subsidies yet, for the bio, wind and solar energy fields, we take money from the burger joints, hardware stores and doctors just to pay it to a business that has proven it is not viable? I promise you, a lot more Americans are employed in food service, store front sales and the medical professions than this job discriminating field of bio, wind and solar.

    If yo look into the backgrounds of the bio, wind and solar you will notice that their CEOs, CFOs, and Marketers are all prior political who needed employment after their provider either retired or lost.

  3. bearcreekbat 2016-12-11

    These governors really messed up by leaving Steve Bannon off the c.c. list. South Dakota’s apparent alt-right crowd is not going to be happy with our Governor’s faux pas, after all – isn’t Bannon one of the key brains making decisions for Trump (except when Trump sneaks off to excrete his late night attacks on his twitter account)? This mistake could cost us federal ethanol welfare subsidies for years to come if Bannon seeks revenge.

  4. Donald Pay 2016-12-11

    Energy isn’t a business. Good God, where did Old Sarge come up with that? It’s absolutely 100 percent dependent on government policy, our government’s and others’ as well.

    Nothing has been more subsidized, and continues to be, than nuclear energy and fossil fuels. Coal received huge sweetheart deals during the Reagan administration on leases on public lands. Supposedly the coal leases are supposed to be bid on so the taxpayer gets a fair market price. Under the Reagan administration the bidding process was rigged to prevent competitive bidding, and the coal went for pennies. The failure to properly regulate coal ash and coal emissions is another public subsidy. Nuclear gets liability relief from accidents and benefits from decades of direct federal subsidies. Old nuclear plants are now being subsidized in New York and Illinois by state taxpayers.

  5. leslie 2016-12-11

    Denny’s corn, unresolved EB5 fraud & Platte murders; Koch’s tar sands & Baakan fracking; Bush’s Credit Default Swap Derivatives; and Gulliani’s police militarization all equal but so far exceed Trump’s ‘fox in the hen house’ staffing as more of the same crony capitalism taking the vast world wealth for the 1%.

  6. jerry 2016-12-11

    1/2 of Iowa corn goes to ethanol by mandate, most of the rest to livestock feed. Name one thing or one person who is not subsidized. In a socialistic society like ours, we all get a subsidy or have the benefits of subsidies each second of our American lives. We may complain about it, but when the heat goes on during a cold spell, we all look the other way and turn that thermostat up. Trump knows that these flim flam artists are also electoral voters that “stood up” to Trump. Great for future election fodder, but meaningless in the big picture.

  7. Rorschach 2016-12-11

    Yes, big oil and big ethanol should be able to stand on their own two feet without taxpayer-funded corporate welfare. The federal government should keep the renewable fuels mandate though. The alternative to ethanol as a gasoline additive is MTBE which contaminates groundwater. Fiscally irresponsible Republicans will probably insist on the continuation of unneeded subsidies for wealthy corporations though. Corporations are people, you know.

  8. Robert McTaggart 2016-12-11

    Unfortunately, most individuals cannot afford to build their own power plant by themselves. If only there was some help upfront to do what is necessary, say a subsidy that everyone chips into, to get the financing to build the power plant, so that everyone could get a benefit of on-demand electricity right now for a much smaller annual cost?

    Some subsidies are there to provide what is necessary for the service that the public expects. You want electricity whenever you turn on the light switch, computer, or television? That doesn’t happen by magic.

    And by keeping safe nuclear plants operational, both Illinois and New York do not have to replace carbon-free nuclear with something that emits more carbon (coal, or the gas/wind/solar combo).

  9. Robert McTaggart 2016-12-11

    The question really is whether the public receives enough of a benefit for the subsidy that is provided. For example, a nuclear power plant may run for 60, 80, or 100 years, providing decades of jobs and emission-free power.

  10. Robert McTaggart 2016-12-11

    For the record, I am not in favor of “nuke”-ing biofuels ;^). I however am in favor of using nuclear to generate the heat necessary to produce biofuels.

    While this is not truly a free market, there would still be some benefit from competition. Alternatives to the usual biofuels, like ethanol or biodiesel, should be investigated and developed.

  11. mike from iowa 2016-12-11

    Doc- nobody, and I mean NOBODY, will ever confuse Perry with a scientist. He has never held a job outside of gubmint trough sucking. His MO as guv of Texas was to give committees and chairmanships to high dollar campaign contributors, no experience preferred. His only serious claim to fame was bestowed on him by the unsinkable Molly Ivins who crowned him Governor Goodhair.

  12. mike from iowa 2016-12-11

    Big Awl should be willing to pay farmers $20000 per acre to drill for oil on the most fertile farm grounds in America. Of course, that would conflict with all them cafos that need ground to pollute with liquid stink from cafo lagoons and methane producing pits under the buildings. Then they can kill each other off and perhaps save our water from all their pollution.

  13. Robert McTaggart 2016-12-11

    Didn’t Perry want to get rid of DOE, but couldn’t remember it as one of three departments he would eliminate in one of his debate answers?

  14. o 2016-12-11

    Rorschach, “The federal government should keep the renewable fuels mandate though.”

    I have issues with including ethanol with renewal energy. It is used only mixed with oil and in real terms after factoring in the oil used to produce, refine, and transport the ethanol, doesn’t really offset as much fossil rule as advertised. It perpetuates fossils fuel use. I would prefer that funding be used to truly develop non-fossil fuel alternatives.

    Maybe I am naive, but I would wish corn be sold as food – not energy.

    I do think this is the beginning of the realism of the Trump administration affecting supporters. Maybe some buyers remorse as where this man governs on issues that were not part of the “lock-her-up,” “build-the-wall,” “drain-the-swamp” campaign cheerleading. Letting everything else slide will not work out well for many of his supporters.

  15. Robert McTaggart 2016-12-11

    Biomass is a potential source of hydrogen, as is biogas derived from biomass. Or you can burn biomass to generate electricity if a hydrogen economy is not your cup of tea.

    Otherwise, one likely needs a different biofuel to replace gasoline. We would need to make a lot more ethanol than we do today to replace fossil fuel altogether, but it may be the case that several are developed for specific applications (jet fuel, cars, trucks, etc.).

  16. Porter Lansing 2016-12-11

    Don’t forget to kneel and kiss his ring, Gov. Daug. ♛ He loves that stuff.

  17. mike from iowa 2016-12-11

    Yup, Doc. Perry’s memory ain’t the sharpest. But then we have this brainiac to contend with- from The World’s Most Dangerous Beauty Shop-Juanita Jeans.

    Okay, so Donald Trump is taking Daily Intelligence Briefings only once a week, which kinda makes the Daily part subject to whim.

    The reason?

    “You know, I’m, like, a smart person,” he said. “I don’t have to be told the same thing in the same words every single day for the next eight years.”

    Wait. He thinks the intelligence briefing is something that helps his general intelligence? You know, like explaining Newton’s Laws or the water symbolism in “The Rime of the Ancient Mariner”?

    What I think: He doesn’t understand a damn word they are saying.

    But, he has a failsafe.

    He added that he had instructed the officials who give the briefing: “‘If something should change from this point, immediately call me. I’m available on a one-minute’s notice.’”

  18. Robert McTaggart 2016-12-11

    Very cool. That is a TRIGA reactor, which uses a different fuel than a commercial reactor. Its purpose is to generate neutrons for research and to train nuclear engineers on various items for controlling and operating a reactor, and to examine the effects of neutrons on devices and materials used by nuclear power.

    So it definitely supports nuclear engineering programs that have them.

    When the reaction rate goes up, the fuel heats and expands. But that means neutrons don’t hit as many uranium atoms per second, which means the reaction rate drops. Then it cools and contracts, and neutrons will hit more uranium atoms.

    So if you leave it alone, the power will simply fluctuate about an average….no runaway possible.

  19. caheidelberger Post author | 2016-12-11

    OldSarg, it looks like we’re buying the fossil fuel CEOs some burgers, too:

    According to that source, in 2014, the U.S. federal government was subsidizing fossil fuel exploration and development at a rate of $37.5 billion a year.

    Does the Renewable Fuel Standard cost the government anything?

  20. Robert McTaggart 2016-12-11


    It would cost a lot more if biofuels were to replace fossil fuels in the economy tomorrow. That capacity does not exist today.

    In other words, how much would it cost to build the infrastructure and delivery systems (which often cannot use pipelines), as well as to grow the crops or algae necessary, to replace fossil fuels in transportation 100%?

  21. Robert McTaggart 2016-12-11

    Probably if you know how much we are spending on making biofuels right now (in total), you can estimate how much a total fossil fuel replacement would be.

    Then compare that number to the fossil fuel subsidy.

  22. Darin Larson 2016-12-11

    Cory, your headline is misleading. There is no subsidy for corn ethanol. There is a Renewable Fuels Standard (RFS) mandate, however, that requires the blending of a certain amount of biofuels in our fuel supply each year.

    Apart from the RFS mandate, we need a certain amount of ethanol, somewhere in the 4-5 billion gallon per year range if I recall correctly, to serve as an oxygenate in the fuel supply. It makes the gas burn cleaner. It replaced the oil industry’s product, MTBE, a known carcinogen that polluted ground water.

    Some day we may be able to get rid of the mandate, but the problem is how do you keep Big Oil from simply refusing to use a competing product, even if the ethanol is cheaper. They spend hundreds of millions of dollars each year on lobbying and advertising to try to get rid of ethanol. They have attacked ethanol with false advertising and all manner of baseless claims.

    Currently, the oil industry is using ethanol as a blend component with their cheap low octane grade of gasoline. Ethanol is high in octane so it increases the octane of the gasoline blend in our fuel supply. The effect of this blending allows refineries to run more efficiently since they only have to produce a lower grade of gas that is cheaper to make. Big Oil also produces premium grade gasoline that is higher in octane and does not require blending with ethanol, but it is much more expensive for the refinery to produce. Take a look at the difference in price between E-10 gasoline with 10% ethanol and premium gasoline or even E-0 and E-10 at the same octane level.

    Ethanol stretches our nation’s gasoline supply and refining capacity and reduces gasoline prices. It does not require a carrier battle group operating 24/7 in the Persian Gulf, nor a huge military presence in the Middle East. The biggest subsidy to the oil industry is the protection afforded by the US military. If the oil industry had to pay for the cost of defending itself around the world and those costs were passed on to consumers gasoline would be $1-2 a gallon higher.

  23. grudznick 2016-12-11

    Mr. Larson seems to know much about this subject and seems to be a credible fellow indeed.

  24. Robert McTaggart 2016-12-11

    The letter sent to Trump seems to emphasize job creation over the benefits of using biofuels…maybe that message is tailored to the audience receiving the message.

    Darin’s comments about the costs related to military entanglements would be related to the energy independence argument that biofuel interests often make. A holistic review of costs and benefits is needed.

  25. moses6 2016-12-11

    Get rid of subsidies Republicans dont want these we can do it ourselves.

  26. mike from iowa 2016-12-12

    I noticed under dumbass dubya how much fuel prices going to our troops in Iraq and Afghanistan escalated under Cheneyburton’s no bid contracts. Potable water got a whole lot dirtier and less healthy and the shock of showering killed several troops due to shoddy wiring under a Cheneyburton subsidiary.

  27. Don Coyote 2016-12-12

    Darin get’s a lot wrong and not much right in his explanation of the Renewable Fuel Mandate. By mandating a percentage of ethanol mixed with gasoline we are in effect creating a guaranteed market for an inferior (low energy content) fuel and that would be considered an indirect subsidy by economists.

    And while ethanol can act as an oxygenate for gasoline reducing tailpipe emissions, in the summer this is negated by ethanol’s propensity to separate from the gasoline increasing the evaporation of ethanol and with it increased emissions making ethanol a major contributor to summer smog.

  28. caheidelberger Post author | 2016-12-12

    Darin, Don—good point that the RFS is not a direct subsidy transferring cash from the federal budget to ethanol producers, but also fair to refer to an indirect subsidiy, akin to providing military interventions and protection. What to do with that headline?

  29. Robert McTaggart 2016-12-12

    Change it to “Daugaard Urges Trump to Protect Biofuels.”

  30. Craig 2016-12-12

    The biggest problem I see with this letter is that it was addressed to the “Honorable” Donald Trump. There is nothing honorable about that man.

  31. Don Coyote 2016-12-12

    @cah: I don’t buy into the myth of the oil industry/US military subsidy. However for argument’s sake, if it did exist, then why single out the oil industry as the sole beneficiary of peace in the Middle East? Doesn’t all global trade benefit from the peace (such as it is) that is maintained in the Mideast and on the sea lanes by the US military? And if the goal of this peace maintenance is to keep the global price of oil lower, isn’t that an odd type of subsidy; one that drives the price of your product lower? It certainly isn’t the goal of the oil companies.

  32. Darin Larson 2016-12-12

    The price of the product is lower because the costs of the military protection and intervention in the Middle East are not passed on to the consumer–they are part of our taxes. Their artificially lower priced product thus competes against renewable energy products like biofuels at a price point much lower than it would without the military protection subsidy. If gasoline was priced at its true cost, renewable energy sources and alternative energy sources would be eating Big Oil’s lunch more than they already are.

    So, it’s a myth that the US has fought wars and spent trillions of dollars on military operations in the Middle East because of oil? It must be the Persian rugs that we are there defending. Good to know. It is a good thing that Africa isn’t loaded with Persian rugs, we would have to intervene in all of their wars, too.

  33. Jana 2016-12-12

    Given the impact of ag on our economy, does anyone know if Governor Daugaard has spoken out about the impact that NAFTA and TPP have on our farmers and producers?

  34. grudznick 2016-12-12

    Who is Governor H? Mr. H, as Governor, when he has reached the majority of 73 years of age? By then I expect Mr. H to have had his fill of pies and NAFTA to have been…that word Mr. Troy taught me…decimated (10% smaller)

  35. OldSarg 2016-12-13

    Folks, there is a difference between a “subsidy” and a tax “deduction”. Oil and gas receive the same tax “deduction” EVERY industry in the United States receives. They get to “deduct” the money they invest in the development of the endeavor, like the cost of the drill, from the taxable amount of the profit from the endeavor. Ethanol production is “paid” through direct tax dollars, a “subsidy” to offset the cost of what they produce. That means they are “paid” your tax money to make something that would not be profitable without the additional money.

  36. Darin Larson 2016-12-13

    OldSarge, your information is old and out of date. Ethanol does not receive a tax dollar subsidy or any other subsidy. There is a Renewable Fuels Standard (RFS) mandate as discussed above.

    The subsidy such as it was expired on January 1, 2012. That’s nearly four years ago, but people like you are still spouting off about it. Love you some Big Oil propaganda, huh?

  37. Darin Larson 2016-12-13

    OldSarge, here is what you said “Ethanol production is “paid” through direct tax dollars, a “subsidy” to offset the cost of what they produce. That means they are “paid” your tax money to make something that would not be profitable without the additional money.”

    This is wrong and you know it if you read your own article. The ethanol subsidy “to offset the cost of what they produce”, as you say, ended on December 31, 2011. That’s nearly five years ago.

  38. Jana 2016-12-13

    Doesn’t matter. The Trump administration already has it in for SD…if he can find it on a map. With Governor Daugaard and John Thune doing the right thing by condemning him for his “Grab the Pu**y remarks we need to realize that the man carries a grudge.

    Then Kristi says “No, I won’t even meet with you.”

    40% of our state funding will come from the gracious hand of Donald Trump…think about that.

    NAFTA and TPP international trade agreements are good for our farmers and producers. Trump says bye bye.

    Ethanol subsidies are over within his administration given his picks with deep ties to oil at DOE, SoS and EPA.

    Education? Think that his SoE is going to help fund a charter school outside of SF and RC? Her plan is to suck public education of funding and shift it to vouchers. Vouchers will do absolutely no good for anyone outside of our 4 largest cities with Catholic Schools.

    I think the Trump voters of South Dakota were “hoodwinked” by that New York “scam artist.

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