POET to ‘idle production’ at Cloverdale plant

CLOVERDALE — POET Biorefining announced Tuesday it will idle production at its bioprocessing facility in Cloverdale.

The process of idling the plant will take several weeks, after which the plant will cease processing of more than 30 million bushels of corn annually.

Shutting down the plant means the loss of 56 local jobs. POET officials were quick to point out the impact they see it having on farmers and others who don’t actually work at the plant, estimating it will impact hundreds of jobs in the state.

POET first acquired the shuttered Altra Biofuels plant north of Cloverdale in 2010, investing more than $30 million in upgrades to the facility. The plant celebrated its grand opening in early 2011.

It is unclear if “idling production” could mean a possible resumption of business in the future.

While the decision to close a biorefinery is a drastic one, it is not the first step POET has taken to deal with decreased demand for biofuels in the current market. The company has reduced production at half of its biorefineries, with the largest drops taking place in Iowa and Ohio.

As a result, the company is consolidating numerous jobs across POET’s 28 biorefineries, estimating that corn processing will drop by an additional 100 million bushels across Iowa, Ohio, Michigan, Indiana, Minnesota, South Dakota and Missouri.

“The Renewable Fuel Standard (RFS) was designed to increase the use of clean, renewable biofuels and generate grain demand for farmers,” POET chairman and CEO Jeff Broin said. “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.”

The RFS authorizes small refinery exemptions (SRE) for refiners that process less than 75,000 barrels of petroleum a day and demonstrate “disproportionate economic hardship.” However, POET said in the last two years, the EPA has granted SREs to refineries owned by ExxonMobil, Chevron, and other large oil companies — none of which are small and none of which have economic hardship.

“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,” the company said in its statement. “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 four billion gallons and reduced demand for corn by 1.4 billion bushels, causing severe damage in rural America.”

POET president and COO Jeff Lautt was vocal in his disappointment with the Trump administration and the EPA.

“POET made strategic decisions to support President Trump’s goal of boosting the farm economy,” Lautt said. “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.”

The EPA recently announced 31 new waivers, which POET officials say come in steep 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 company said. “The president now has the opportunity to show his leadership on this issue and turn around the rural economy.”

“My long term fear isn’t for the biofuels industry, it’s for rural America.” Broin said. “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.”