Ethanol Plant to Stop Production, POET Blames EPA

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(photo courtesy of Wes Mills) (photo courtesy of Wes Mills)

Ethanol production at an Indiana biofuels plant will be stopped, 50 workers will be laid off, and the owner blames Environmental Protection Agency policies and the oil refining industry. South Dakota-based POET Energy announced the plant in Cloverdale will be placed in “idle production” within several weeks, leading to the layoffs.

The ethanol producer company sent a WARN notice to the Indiana Department of Workforce Development indicating workers would be laid off. POET's letter states the company "has decided to cease operations indefinitely and that a mass layoff at its facility...shall occur." The notice also indicates there are "no plans to resume operations in the future." The company indicates October 18 will be the last day on the job.

The company accuses the EPA of misusing the Small Refinery Exemption, which gives smaller oil refineries a waiver on fulfilling the federally mandated Renewable Fuel Standard. Oil refineries that process less than 75,000 barrels of petroleum a day are exempt from the biofuel requirements. But POET says the EPA has granted these waivers to refineries owned by larger oil companies, like ExxonMobil.

“Our industry invested billions of dollars based on the belief that oil [refiners] 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.

The Indiana Corn Growers Association is also critical of EPA’s granting of these waivers, which it says takes billions of gallons of ethanol out of the required levels defined in the RFS.

“These waivers directly impact rural America and corn farmers” said ICGA President Sarah Delbecq, who is a farmer from Auburn, Ind. “With immense uncertainty now and in the future for the ag economy due to planting delays and trade disruptions, more waiver abuse would only exacerbate the damage to farmers’ bottom line and overall demand for corn.”

The ICGA says Indiana ranks as the fifth-largest producer of U.S. ethanol – generating more than 1.1 billion gallons per year. The corn growers group says nearly half of Indiana’s corn crop goes toward ethanol production, which represents nearly $300 million in additional farmer income.

Click here to read the WARN notice from POET Energy.

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