State Senator Miller hears about the ethanol industry
Wednesday, April 18, 2012 5:56 AM
Richard Eichstadt, general manager of Poet Biorefining in Preston, had one main message for District 31 State Sen. Jeremy Miller (R-Winona) when he stopped by the plant in Preston on April 16.
Poet Biorefining general manager Richard Eichstadt, left, shares a laugh with District 31 State Sen. Jeremy Miller (R-Winona) during Miller's recent stop at the plant. (Bluff Country Newspaper Group photo by Lisa Brainard)
Eichstadt hoped that ethanol would be able to get good access to the consumer market.
"We feel it's a very competitive fuel," said Eichstadt of the ethanol produced at Poet.
The plant manager felt that getting ethanol blender pumps and products readily available "has to be legislated... encouraging stations to put it in" - or it won't happen to any great extent.
Eichstadt was looking beyond E10 (10 percent ethanol-90 percent gasoline fuel products) to E15, E20 and even higher blends of ethanol in fuel.
He noted the EPA (federal Environmental Protection Agency) has approved going up to 15 percent ethanol. Eichstadt continued, "But.... right now oil has a monopoly."
He said people would go for the ethanol product, given the choice, because "it's cheaper by quite a bit."
Miller asked at what percentage ethanol blend a "flex fuel" vehicle would be required. Eichstadt answered, "Legally - E15."
The general manager gave background on Poet to Miller, saying it's 66 percent locally owned by a farmers coop. The plant was started in 1998. Many local people served on its board of directors. Eichstadt said, "We think it has been very good for the county... good for ag in general."
When he talked about buying local corn, Miller commented, "I bet the local farmers like that."
Eichstadt said it saves time during the fall harvest, as opposed to taking corn to the Mississippi for transport.
He also said it has helped support corn prices. "Critics say it drives up food prices, but that is not a very valid argument," he noted.
Eichstadt pointed out purchasing local corn for ethanol also has reduced the need for other ag subsidies for those producers. "It helps make farmers self-sufficient and lessens subsidies."
He also noted the ethanol industry got the producer's payment when it started, but he added, "No more." Eichstadt said that specific money at that time provided the equity needed for banks to loan money to ethanol plants. Otherwise, he felt loans would not have been forthcoming.
In current times, he said money is still being paid out, but not to ethanol, "Just look at the petroleum subsidies."
Eichstadt told Miller that in Minnesota there is some movement by an isobutanol company to convert some ethanol plants and that some legislation may be desired in its favor. There is concern it might try to lock out ethanol, the Poet manager stated.
Eichstadt stressed, "I think all the industries should get the same rules... have a level playing field."
He also said that Poet is starting to look at using cellulose - crop residue - to produce ethanol, starting construction on a plant at Emmetsburg, Iowa. But at this point it is still not competitive with ethanol pricing.
Miller said a priority of the Legislature this session is to streamline permitting processes used by the MPCA (Minnesota Pollution Control Agency). "We don't want to jeopardize the environment, but we want it to move quicker. It (getting industry and projects up and running) does help economic development and jobs."
Miller said he could relate to Poet being a local "good neighbor" in the community, saying his family has run a scrap company in Winona since 1910. He stated, "My father taught me it's all about developing relationships."