ALEXANDRIA — Poet Energy recently announced it will idle production at a plant in Cloverdale and will be scaling back production at other locations.
However, Warren Brown, economic development director for Alexandria, said it’s his understanding that the company’s Alexandria plant won’t see any impact right now.
Poet opened its Alexandria facility in 2008 and employs more than 40 people in Madison County. According to the company’s website, the local plant uses 21 million bushels of corn annually to produce 68 million gallons of ethanol.
The idling of the Cloverdale plant and reduction in production come in the wake of an ongoing trade dispute with China and the EPA providing exemptions for small refineries to include ethanol in gasoline.
“I hope it won’t have any impact,” Brown said. “Right now their business remains steady.
“If you want to have an ethanol plant in your community, you want it to be Poet,” Brown said. “They are a great business operator and community partner. Our hope and desire is that there will be no impact locally.”
Tom Madru, general manager of Kokomo Grain, which has facilities in Madison County, said Wednesday that the demand for corn by Poet in Alexandria depends on the time of the year.
“We have not seen a decline in their demand,” he said. “They have purchased corn this year.”
Madru said it is not unusual for purchases by Poet to decline just before a new corn harvest.
“They normally do some maintenance work just before the harvest,” he said.
Madru said if the demand drops significantly it will have an impact on the local farm economy.
A company press release earlier this month indicated Poet is reducing production at half of its biorefineries, with the largest reductions in Iowa and Ohio.
The EPA’s Renewable Fuel Standard (RFS) program, which has provided small refinery exemptions to Exxon, Shell, Mobil and other oil companies, has also contributed to a decline in demand.
“The Renewable Fuel Standard was designed to increase the use of clean, renewable biofuels and generate grain demand for farmers,” Jeff Broin, Poet chairman, 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.”
The EPA decision has cut biofuels demand by 4 billion gallons and reduced demand for corn by 1.4 billion bushels, the company’s press release said.
“POET made strategic decisions to support President Trump’s goal of boosting the farm economy,” Jeff Lautt, company president, said.
“However, these goals are contradicted by bailouts to oil companies,” he said. “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.”
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