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Sioux Falls company passes billion-gallon mark for ethanol production capacity

Ethanol plant openings are so frequent these days that industry leaders have a hard time getting to all of them. But when a Poet Biorefining plant celebrated its grand opening in Corning, Iowa, Friday, a U.S. senator and congressman, a state agriculture secretary and both ethanol trade groups were on hand to praise an important milestone.

When the 60-million gallon plant is fully operational, it will make Poet, the new name for the Broin Companies, a billion-gallon producer. That puts it just behind the industry leader, ADM, in the amount of ethanol production controlled and marketed by one company.

But unlike other large companies and the investor groups now jumping into the industry, Poet makes a point of offering equity to local investors.

"In every facility built by our companies we always reserve a portion of our ownership for local farmers and investors," Poet CEO Jeff Broin told Agriculture Online in an interview at the new plant Friday. "We think it's important that some of the income from these facilities stays in the area surrounding the plant."

Broin's family began experimenting with ethanol production on their farm in 1983 near Kenyon, Minnesota and began commercial production in 1986 with a million-gallon plant in Scotland, South Dakota. Today, the company, based in Sioux Falls, South Dakota, manages 20 plants in nine states. It has built 25 ethanol plants in the past 20 years.

Broin is also one of a few companies working to develop production of ethanol from cellulose, with production planned at its corn ethanol plant near Emmetsburg, Iowa.

The mood at the Corning plant Friday was almost euphoric.

Iowa Agriculture Secretary Bill Northey, a farmer from Spirit Lake and past president of the National Corn Growers Association, remembers the days when gas stations proudly proclaimed "no alcohol in our gas," and when Detroit had misgivings about recommending ethanol for its cars. Today, some oil companies are promoting their investments in biofuels and car makers advertise flex-fuel vehicles that burn E-85. And, ethanol is a big part of some $3 billion in economic investment in the state last year, Northey told Agriculture Online.

That has pushed Iowa from near the bottom of states in venture capital investments to somewhere around tenth, he said.

"To me, it’s also kind of a change in attitude in rural Iowa," he said. "We have part of our own destiny in our own hands."

Matt Hartwig of the Renewable Fuels Association told the crowd at the plant that the U.S. ethanol industry currently has 117 biorefineries in 19 states with a capacity for 6 billion gallons of ethanol. By the end of this decade, the industry will be making 12 billion gallons of ethanol, an amount approaching a tenth of the nation's gasoline use.

Other speakers were even more bullish.

Corning is in Republican Representative Steve King's western Iowa district, which already ranks first in the nation in biodiesel production and, King told the crowd at the plant Friday, "before the snow flies, this district will be number one in ethanol production in all of America."

Iowa's Republican Senator Chuck Grassley ticked off a long list of positive things about ethanol. It has increased the price of corn for farmers (by about a dime over local prices according to some farmers who have already sold corn to the Corning plant). It's good for the environment. (The Corning plant uses new fermentation technology that cuts fuel use by about 15%.) It's good for jobs (including 40 new ones at the Corning plant). It's good for our balance of trade, Grassley said, because about a third of the U.S. trade deficit is imported oil. And it's good for energy independence and national security.

Grassley acknowledged that he's been criticized by The Wall Street Journal for his support in Congress of the ethanol industry.

"We don't have to apologize for ethanol," he said. "Everything about it is good, good, good."

Meanwhile, the 40 employees who will actually make the stuff, are getting ready to put the plant into operation by mid-May.

The plant has a $2-million payroll and will buy 21 million bushels of corn annually.

About 70% of the plant employees are from within 25 miles of Corning and the rest have come from outside of the community, said plant manager Greg Olsen. "We've got a good team that we've put together."

Ethanol plant openings are so frequent these days that industry leaders have a hard time getting to all of them. But when a Poet Biorefining plant celebrated its grand opening in Corning, Iowa, Friday, a U.S. senator and congressman, a state agriculture secretary and both ethanol trade groups were on hand to praise an important milestone.

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