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By Mike Johanns, alliant's Chairman of Agriculture; Former U.S. Secretary of Agriculture
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- Rollins once was head of a group that opposed ethanol
- More than a third of US corn harvest goes into biofuel
President Donald Trump’s nominee to oversee American farming was once head of a group that was among the loudest opponents of a favorite US agriculture product: biofuels.
But Brooke Rollins, a Texas native who’s Trump’s choice for US secretary of agriculture, vowed in her confirmation hearing Thursday to “elevate and honor all sources of fuel.” She said she looks forward to continuing Trump’s “current energy dominance plan,” of which biofuels is an “important piece.”
Rollins spent 15 years as head of the Texas Public Policy Institute, before moving on in 2018. The conservative think tank backed fossil fuels and vocally opposed US corn-based ethanol. At the time, traditional fuelmakers found themselves at odds with biofuels, with a federal blending mandate dividing the two traditionally right-leaning sectors of energy and agriculture. Even Trump sometimes found himself walking a tightrope between the constituencies during his first term.
Since then, the rivalry between the sectors has faded. More fossil fuel companies have started pumping out products made from corn and soybeans, America’s two biggest crops. Trump’s administration is considering steps to boost sales of biofuel.
“She’s working for a president that’s pro-ethanol, so she’s obviously going to have to follow the president’s lead, and I’m sure she will,” Republican Senator Chuck Grassley of Iowa, the largest US corn grower, said in an interview before the hearing.
“Coming from Texas, I was a massive defender of fossil fuels and the importance of fossil fuels in the energy independence and energy dominance narrative,” Rollins said during the hearing. “Clearly, I’ve spoken with so many of you on both sides of the aisle on this issue. I will be a secretary for all agriculture.”
Rollins’ “extensive qualifications and dedication to America’s farmers” would be on display during the hearing, White House Deputy Press Secretary Anna Kelly said in a statement to Bloomberg.
During Trump’s first term, he was still working to broker a compromise between oil and biofuel interests. In the years since, oil majors have invested in renewable fuels to capture financial government incentives and as a way to gain an environmental sheen and fend off the threat from electric vehicles.
The two industries have become “increasingly aligned,” which could present more opportunities for expanding biofuel use, said Monte Shaw, the executive director of the Iowa Renewable Fuels Association.
EV Threat
More than a third of the annual US corn harvest goes into making biofuel, with most of the gasoline sold nationwide containing 10% ethanol — a blend known as E10. Rather than opposition from oil, the biggest threat to ethanol now comes from the risk of plummeting fuel demand amid the rise of EVs.
This week, Trump invoked emergency powers in a bid to boost domestic energy production and undo Biden administration policies designed to fight climate change. As part of that action, the administration said it would consider issuing waivers to allow year-round sales of E15, which as the name suggests, contains 15% ethanol. Separately, he also ordered his administration to consider eliminating subsidies and other policies that favor EVs.
“Trump has talked about American energy dominance, well, that’s not just oil. I know he said ‘Drill, baby, drill,’ but we need to ‘Distill, baby, distill,’” Shaw said, referring to biofuel production.
During Rollins’ confirmation hearing, biofuel advocates will be looking to “get more clarity and get an update” on her stance, said Geoff Cooper, the head of the pro-ethanol Renewable Fuels Association, whose group was among those urging senators to quickly confirm Rollins.
Green Jet Fuel
It still remains to be seen how the Trump administration will handle a Biden-era push to significantly ramp up US production of sustainable aviation fuel by 2030 in a bid to slash climate harming greenhouse gases.
Expanding the use of biofuels, including in aviation, is “really a obvious opportunity for the Trump administration,” said Mike Johanns, a former Nebraska governor and senator who also served as US secretary of agriculture. Rollins, who was a top domestic aide during Trump’s first term, is in “the best position” to be an advocate, he said in an interview.
“She has that direct policy experience working with Trump,” said Johanns, who is currently chairman of agriculture at Alliant Group. “That is going to be hugely important to have the president’s trust and to have the president’s ear.”
According to Johanns, many farmers and ranchers are doing things every day that may qualify for a research and development tax credit.
“This is no longer about white coats and laboratories,” he says. “This really is about everyday things farmers and ranchers do to improve their process, to improve their herd, to improve their feed rations and to improve the productivity of their land.”
Now granted, Johanns has an incentive to tout the research and development tax credit. He currently serves as the chairman of agriculture for Alliant Group. That company provides tax and consulting services for small and midsized businesses. Its roster includes an impressive collection of former lawmakers and business executives. Still, Johanns says it’s the ability to help farmers that motivates him.
“This is a great opportunity for folks I’ve worked with for many decades in agriculture,” he says.
For example, he says if a corn or soybean farmer decides to do different things with tillage or experiment with seed varieties, that farmer could be eligible for an R&D tax credit. Not only that, if the farmer can show they’ve been implementing practices for a while, they may even be able to have their previous tax returns amended. This can bring a welcome, unexpected infusion of cash
A recent court case ruled that the cost of seed a farmer put into crops attempting to increase productivity qualified for an R&D tax credit.
Johanns advises producers unsure of what tax credits they qualify to meet with an expert and discuss their operation. Based on the conversation, the producer may get tips on how they could earn the R&D tax credit. They also may learn they already qualify for one.
On many occasions, farmers have told Johanns the practices he’s talking about are things they are already doing. He says that’s exactly the point. There are plenty of things that qualify for an R&D tax credit. The key is understanding how to get it. Johanns sees his job as educating people on so they can maximize their profitability.
“It’s been so exciting to be involved with this and we’ve just had such an impact out there,” he says. “The research and development tax credit really works. It works great for agriculture.”
Featured Leadership
Mike Johanns was the U.S. Secretary of Agriculture from 2005-2007 as well as the Governor of Nebraska from 1999-2005 and the state’s U.S. Senator from 2009-2015. As alliant’s Chairman of Agriculture, Johanns brings more than 30 years of experience at virtually every level of government and a strong background in both agriculture and economic development. As the Secretary of Agriculture, he managed 18 different agencies, opened or expanded access to 40 international markets and was responsible for multiple agricultural breakthroughs as a negotiator for the Doha Development Round.
