SIOUX FALLS, S.D. (KELO) — Gevo is taking its aviation jet fuel project to North Dakota but it isn’t taking any South Dakota state money with it, Gevo Chief Executive Officer Pat Gruber said Monday.
“Not one dime. Not one dime came from South Dakota,” Gruber said. Although approved for state money, Gevo did not take or receive it because no plant was built, he said.
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The $12 million in the state Reinvestment Payment Program approved in the Governor’s Office of Economic Development (GOED), applied to the amount of tax relief the company would had received if it built the aviation fuel plant, Gruber said.
While Gruber said Gevo didn’t receive any state money, the project move will leave the state without what was called a nearly $1 billion investment. Former Gov. Kristi Noem called it the largest economic development project in the state’s history.
Republican Speaker of the House Jon Hansen posted on his X account two days ago calling the $12 million “big corporate welfare” that he would stop if elected Governor. Hansen said the approved $12 million was a “hand out” and that GOED and the Governor’s office were duped.
Ian Fury of Gov. Larry Rhoden’s office and Noem’s office responded on his X account to Hansen and said, “To date Gevo has received ZERO dollars and ZERO Cents from the state.”
Statements or implications that Gevo got millions in state money before or without building a plant, “sticks in my craw,” Gruber said.
But that kind of misrepresentation was part of the difficulty and uncertainty of doing business in the state, Gruber said.
Gevo would have used the proposed Summit Carbon Solutions CO2 pipeline. The Lake Preston plant would have converted ethanol into aviation fuel. The CO2 produced would have then been transported to a site in North Dakota via the Summit pipeline. Gevo would have also sold CO2 to other industries.
Strong opposition to Summit’s proposed CO2 pipeline resulted in legislation this session that prevents the company from using eminent domian to help secure a transportation route. In April, the South Dakota Public Utilies Commission denied Summit’s permit application for a pipeline.
“It’s an uncertain evironment (in South Dakota). We need to reduce the risk and the uncertainty,” Gruber said. “That’s why we bought the plant in North Dakota.”
Gevo said in September 2024 it planned to buy Red Trail Energy LLC’s plant and carbon capture assets for $210 million in Richardton, North Dakota. In September of 2024, Gevo said the plant would be able produce 65 million gallons per year of jet fuel and other fuel each year.
The CO2 in North Dakota can be buried or sold to other users and can also be used for enhanced oil recovery in the state, Gruber said.
Gruber said Monday the plant can produce 30 million gallons of jet fuel each year. The company plans a $500 million investment in the North Dakota plant, which is about half of the intended investment for South Dakota.
Gevo will still own the property in Lake Preston and it will do a future project there, Gruber said. But as to when, he isn’t sure.
“I feel bad for the farmers. I feel bad for the economy of South Dakota,” Gruber said.
The company estimated to GOED that it would pay $900,000 in annual property taxes on the South Dakota plant. It also estimated it would create 90 full-time equivalent jobs.
Gruber said Monday it would also have resulted in an annual economic impact of about $100 million.
Instead the state has rejected the benefits, Gruber said.
“It’s anti-development, as if they want to go backward in time,” Gruber said of South Dakota.
In comparison, North Dakota “has a great business environment. It wants to grow industry and agriculture,” Gruber said.
He cited the discussion in the state around data centers. The possibility of data centers is generating some opposition. Gruber said opposition to data centers will cause investors and companies to build outside of South Dakota.
The South Dakota Economic Development Finance Authority (EDFA) approved a $167 million bond in the state’s livestock nutrient management bond program in 2023. That bond could have been used for the CO2 project. The program “assists financing capital expenditures associated with the handling and/or processing of byproducts and livestock nutrients by using federally tax-exempt bonds,” the GOED website says.
In addition to the planned incentives from South Dakota, Gevo received approval for a $1.46 billion loan through the U.S. Department of Energy. Gruber said Gevo is working with the DOE to transfer that loan to North Dakota. On Oct. 14, Gevo said it had secured an extension from the DOE on the loan.
KELOLAND News has left messages with the mayor and city council president of Lake Preston as well as sending an email to Rhoden’s office. The story will be updated with any response.
