SIOUX CENTER—Sioux Center’s ethanol plant is shutting down temporarily.
The board of directors of Siouxland Energy Cooperative, a producer-owned company located three miles west of Sioux Center, announced Monday, Sept. 16, that it will idle production at its ethanol facility.
The nine-member board decided to halt production due to President Donald Trump’s recent grant of small-refinery exemptions, or SREs, to many large oil refineries, which has undermined the Renewable Fuel Standard and reduced ethanol demand by 4 billion gallons.
“The administration’s actions unfairly benefit the oil industry at the expense of our local farmers and, if not addressed soon, will impact the livelihoods of many,” said board president Kelly Nieuwenhuis. “We look forward to the administration properly addressing these issues so that Siouxland Energy can resume ethanol production and its purchase of corn from local farmers, and generally contribute to the local and global economy.”
This is the second ethanol plant to halt production. The first was Plymouth Energy by Merrill. The closures at both Iowa ethanol plants are temporary, at this point.
This is the first time Siouxland Energy has halted production since it opened in 2000.
“It was the hardest decision this board has ever had to make,” Nieuwenhuis said. “I feel we have the best board we’ve ever had at Siouxland Energy. Everyone sitting around the table is a farmer. This plant grinds 23.5 million-25 million bushels of corn a year and produces 70 million gallons of ethanol so the last thing we want to do is see this thing not running.”
Siouxland Energy has 385 shareholders from eight states.
“We realize our shutdown has a local, regional and larger effect,” Nieuwenhuis said. “Besides ethanol, we offer a great feed supply to a lot of cattle feeders in a three-county area and if we’re not producing, we’re also not producing our wet distillers grain for those cattle feeders.”
The ethanol plant doesn’t plan to accept any corn for this harvest season. However, Nieuwenhuis said if things turn around, they could have the plant up and running again within a week.
“This is a day to day thing right now,” Nieuwenhuis said. “I did talk to Sen. [Joni] Ernst on Saturday. I also got a message from Gov. [Kim] Reynolds on Friday night. The meeting they had with president Trump last Thursday was really positive. They’re hopeful that the deal they’re told we’re going to get will be the one we get because they said it would be very beneficial so we’re sitting back and patiently waiting.”
Siouxland Energy employs 42 people in Iowa and South Dakota, all of which are staying on board during the shutdown.
“They’ll be compensated fully because we realize one big announcement and this thing could turn around,” Nieuwenhuis said.
Siouxland Energy officially stopped production Sept. 9.
“We first went into fall shutdown at the end of August, our normal maintenance time before the big harvest season,” Nieuwenhuis said. “Normally it’s four to five days of people working day and night, 24 hours a day around the clock having people patch things up and then we crank it back up. This year with the margins they way they were, we were loosing money in every gallon we were producing so we took a two-week shutdown. We worked only during the daytime hours and in that time period the board made decision to not restart.”
Nieuwenhuis was concerned by President Trump’s meeting Monday with oil industry leaders.
“With oil industry in Saudi Arabia, which has 5.8 percent of world’s oil supply, getting attacked by drones — that’s huge,” Nieuwenhuis said. “We’ve been aggressively pushing the Trump administration to reallocate the 4 billion gallons of ethanol that were lost through their SFEs. With the recent attack on Saudi Arabia, ethanol could fill that void without having to protect Middle Eastern oil. We’re trying to get every bit of news out of the state of Iowa and we’re going to continue pounding that home until we get a good announcement.”