SIOUX CENTER—Siouxland Energy Cooperative has resumed production at its ethanol plant west of west of Sioux Center, although in a limited capacity.
Siouxland Energy halted production Sept. 9, a temporary measure in response to the announcement in August that the U.S. Environmental Protection Agency would grant 31 small-refinery exemptions, which reduced the demand for ethanol.
Market conditions have changed, however, thanks to good news from California, where a significant amount of the plant’s ethanol is shipped, said Siouxland Energy board president Kelly Nieuwenhuis.
The California Air Resources Board recently came out with a new model for determining carbon index scores. With this new model, Siouxland Energy’s score was lowered, allowing the company to get back additional revenue totaling $2.7 million for ethanol shipped to California earlier this year.
Siouxland Energy started production again on Friday, Oct. 25.
Nieuwenhuis said operating at 50 percent capacity has allowed Siouxland Energy to lose slightly less money than it would if the plant remained totally idle, the result of changes from California and not the EPA.
“The regulatory attempts by the EPA give us little confidence that we will see the relief we need,” Nieuwenhuis said in testimony at a Tuesday, Oct. 29, hearing to the Committee on Energy and Commerce in Washington, D.C.
He told the committee he has seen how the EPA’s small refinery exemptions have hurt rural Americans.
“Each year, our plant produces up to 80 million gallons of clean, renewable biofuel, including up to 2 million gallons a year of cellulosic ethanol,” Nieuwenhuis said at the hearing.
Announcing the decision to idle production at the plant was one of the toughest things he has had to do, he said.
“Even eight years ago during a 50-year drought, our plant had significantly more debt than we do today and yet we had no problem accessing capital,” Nieuwenhuis said at the hearing. “This time around, our local bank has increased the scrutiny for borrowing given the lack of certainty with the RFS (Renewable Fuel Standard). The reality is that they read the same news that we read, and they understand that EPA is taking actions that have dramatically undermined the market.”
Throughout Siouxland Energy’s idle period, the plant’s 42 employees received full pay, according to Nieuwenhuis.
Operations resumed on Oct. 25, but it will be a while before any ethanol is actually produced and shipped again.
“When we idled the plant, we basically flushed everything out. We’re up and running, but it’ll probably be about three weeks before we get any ethanol going out the door,” Nieuwenhuis said. “It takes a little time to get everything back, filled up and rolling again.”
Although this is an encouraging step in the right direction, Nieuwenhuis said more must be done for ethanol at the federal level.
“We’re going to continue to fight for the ethanol industry and to stop the small refinery exemptions and go forward from there,” he said.
A Siouxland Energy newsletter sent to Siouxland Energy members cautioned that changes to operational capacity could still occur.
“As the EPA continues to ignore the guidelines established by the administration in early October, the markets continue to be unsettled. This market uncertainty created by the EPA leaves the door open to future operational adjustments, including increased run rates or additional idle periods,” the newsletter stated.
It continued, saying that because Siouxland Energy does not want to build up inventory in its bins, grain acceptance will be scheduled daily, with delivery hours limited each day based on inventory levels.
Producers were encouraged to check in with Siouxland Energy before delivering, and members were encouraged to sign up for text alerts through the website www.siouxlandenergy.com,to stay up to date on any changes at the plant.