POET idles Indiana plant, draws concern from Iowans
By KRISTIN DANLEY GREINER
Due to recent decisions made by the Trump Administration regarding small refinery exemptions, ethanol production leader POET must idle production at its bioprocessing facility in Cloverdale, Ind. Shutting down will take several weeks, after which time the plant will stop processing corn for ethanol production.
The plant processes more than 30 million bushels of corn annually. Hundreds of local jobs will be impacted.
POET already has cut production at half of its biorefineries with the biggest impact being felt at its Iowa and Ohio plants. Numerous jobs must be consolidated across POET’s 28 biorefineries to compensate for those cutbacks and corn processing will drop by an additional 100 million bushels across Iowa, Ohio, Michigan, Indiana, Minnesota, South Dakota and Missouri.
“The renewable fuel standard was designed to increase the use of clean, renewable biofuels and generate grain demand for farmers. Our industry invested billions of dollars based on the belief that oil could not restrict access to the market and EPA would stand behind the intent of the renewable fuel standard. Unfortunately, the oil industry is manipulating the EPA and is now using the RFS to destroy demand for biofuels, reducing the price of commodities and gutting rural economies in the process,” said POET chairman and CEO Jeff Broin in a statement.
The RFS authorizes small refinery exemptions for refiners that process less than 75,000 barrels of petroleum a day and demonstrate “disproportionate economic hardship.” During the past two years, the EPA has issued waivers to refineries owned by ExxonMobil, Chevron and other large oil companies-none of which are small and none of which have economic hardships, POET emphasized.
“EPA’s mismanagement of SREs has created an artificial cap on domestic demand for ethanol and driven RIN values to near-zero, which weakens the incentive for retailers to offer higher blends. Oil is making billions of dollars, yet still using EPA to stop biofuels growth by handing out hardship waivers to some of the wealthiest companies in the world, in contradiction with President Trump’s public comments. So far, the EPA has cut biofuels demand by 4 billion gallons and reduced demand for corn by 1.4 billion bushels, causing severe damage in rural America,” Broin continued.
Monte Shaw, executive director of Iowa Renewable Fuels Association, cannot believe what is happening in the ethanol industry and with POET.
“In my 20 years of being involved with biofuels policy, these are some of the most uncertain and disheartening times I’ve witnessed for our industry. At a time when margins are low, farm income is down, and trade disputes continue to hamper the rural economy, granting 31 unjustified RFS exemptions only served to compound the pain being felt across the heartland. Dozens of biofuel plants across the country are slowing or idling production, meaning less corn is being ground and thousands of jobs hang in the balance. If the Trump Administration does not take immediate action to ensure waived RFS gallons are reallocated and biofuels demand is restored, we can fully expect more plants to close their doors and the economic crisis being felt across rural America will only deepen,” Shaw said.
“POET made strategic decisions to support President Trump’s goal of boosting the farm economy. However, these goals are contradicted by bailouts to oil companies. The result is pain for Midwest farmers and the reduction of hundreds of jobs and hundreds of millions of dollars of economic activity across Indiana.” added POET president and COO, Jeff Lautt, in a statement.
The recent announcement of 31 new waivers comes in contrast to the president’s roll-out of year-round E15 earlier this summer. The SREs are “wiping out any near-term growth potential for year-round E15 and challenging the president’s promises made to family farmers and rural communities. The president now has the opportunity to show his leadership on this issue and turnaround the rural economy,” Broin challenged.
“My long-term fear isn’t for the biofuels industry, it’s for rural America. POET can continue to produce ethanol with cheap grain, but we don’t want to lose our family farmers. The EPA has robbed rural America, and it’s time for farmers across the Heartland to fight for their future,” Broin said.
Currently, POET does not plan to idle any additional plants, but will be “monitoring market conditions and make decisions accordingly.”
The Iowa Corn Growers Association’s (ICGA) Annual Grassroots Summit ICGA delegates and members rallied to express their anger earlier this week and are calling for the Trump Administration to make it right by following the law and upholding the integrity of the Renewable Fuel Standard (RFS).
“Agriculture is in one hell of a bad situation right now. The government put us in this situation, and they need to help us get out of it,” stated Vic Miller a corn farmer from Fayette County in a statement provided by the ICGA. “It’s time for President Trump to make rural America and the RFS great again. He made promises to American farmers and now it’s time for him to keep them.”
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