Poet: 10 years, 650 million gallons of ethanol

Source: By Jake Shama, The Daily Republic • Posted: Monday, November 7, 2016

LOOMIS — The ethanol business is booming, and one local plant has turned its success into a $1 billion investment in the Mitchell community.

Ten years ago, the energy company opened a facility about 2 1/2 miles northwest of the Mitchell Municipal Airport and has benefited from central South Dakota’s steady corn market.

To celebrate its first decade in operation, the plant is hosting a luncheon from noon to 2 p.m. Wednesday for its employees and numerous invited guests, including producers, investors and local vendors.

“It’s pretty awesome we’ve been here for 10 years and made such a big impact on the local economy,” said the plant’s general manager, Becky Pitz.

The plant actually began operations on Dec. 4, 2006, but Pitz thought it may be too cold to host a luncheon outside in December.

In the past 10 years, the Mitchell plant has produced 650 million gallons of ethanol and 1.8 million tons of Dakota Gold animal feed, according to reports provided from Poet. It started extracting corn oil from its feed in 2012, thus creating high-protein feed rather than high-fat, and has so far produced more than 45,000 tons.

And much of the corn has come from local farmers. According to Pitz, the Mitchell plant has purchased 200 million bushels of corn and paid more than $1 billion to 1,640 farmers and 65 elevators.

Pitz graduated from South Dakota School of Mines in Rapid City and worked at Toshiba as a senior engineer. When Poet started seeking applicants for a plant in Mitchell, Pitz jumped at the opportunity and still “loves every minute of it.”

Sitting just north of Loomis, the facility is the second westernmost plant in the 27-plant Poet network, edged out by the Groton facility in northern South Dakota. Pitz said Jerry Rubendall, an initial investor in Poet’s Mitchell venture, wanted to show there was corn this far west.

But the location proved its worth in more ways than one. The demand for wet animal feed is higher in Mitchell than any other Poet location, Pitz said. Since the corn is evenly broken into ethanol, feed and carbon dioxide, having ranchers nearby helps. Pitz said some Poet locations capture the carbon dioxide to sell to companies like Coca-Cola, but there is no market for it in Mitchell.

In 2006, the plant was the 19th facility designed by Poet and was the largest at the time with an expected production of 60 million gallons of ethanol per year, Pitz said. The plant has exceeded expectations and produces more than 70 million gallons.

“When economic times are good, you want to produce as much as you can,” Pitz said. “We’re in probably the top tier of the plants (by production).”

Poet employs 45 people in Mitchell, 10 of whom have remained at the plant since it opened 10 years ago.

Plant and planter

Ten years after her first day at the plant, Poet Laboratory Technician Laura Laible has no plans to leave.

Laible and two coworkers perform quality control on incoming corn samples and outgoing products, including checking yeast levels and toxins.

Laible’s first day at Poet was Oct. 23, 2006. Before then, the Mitchell Technical Institute graduate was working at United Blood Services, which required a significant amount of travel. One day, she received a sign pointing to a career change in the form of a plea from her 5-year-old son.

“I came home one night and it was, ‘Mommy, can you get a different job?’ A little 5-year-old clutching at your heart,” Laible said.

She applied to Poet and hasn’t looked back. Laible said the company asks her to work 40 hours per week but doesn’t care when she schedules her shifts, giving her the freedom to be with her five children for the important moments.

Having developed strong bonds with her coworkers, Laible said working at Poet is well worth the 40-minute drive to work from her home in Howard.

Day to day, Laible said laboratory technicians must embrace change because people at the Poet headquarters in Sioux Falls are continually researching advancements and making recommendations to improve products, so testing practices can be greatly altered from one month to the next.

And Poet has done more for the community than serve as an employer for folks like Laible.

For one Mitchell-area farmer, the Poet plant is the only buyer he needs. Dustin Pollard, 28, works on a corn and soybean operation just west of Loomis, and he takes all the farm’s corn to Poet.

“It’s only a mile from us, and it’s a better price. Ethanol helps out with gas prices, and it keeps the corn price up,” Pollard said.

Pollard said Poet is often 4 to 5 cents higher for corn than prices offered by grain elevators, so doing business with the ethanol plant saves on fuel costs and brings in more revenue.

“Very seldom, we might take a little bit to Mitchell, but it just depends on what’s going on. But normally, primarily, all our corn goes to Poet,” Pollard said.

And Pollard said having the plant nearby hasn’t created a nuisance. He doesn’t think the facility is an eyesore, and the humming sound “doesn’t bother a thing.”

Pollard and his employer, Darwin Everson, have been selling to Poet since the plant first opened, and Pollard believes the plant is impacting farmers around the region, whether they sell to Poet or not.

“It keeps our costs up. Ethanol’s a great deal, and if we didn’t have the ethanol plant, I don’t think our corn prices would be what they are,” Pollard said.

Planning for the future

Poet has started looking at a new venture, and while it hasn’t made its way to Mitchell, Pollard said he’d be interested in getting involved if it ever does.

The company has partnered with DSM — a Netherlands-based company focused on energy and health among other ventures — to start producing cellulosic ethanol, which is created from corn cobs, leaves and other biomass left behind after harvest, though it could also be made from switchgrass, straw, wood residue or other biological materials.

“It really opens up your options for entirely new sources and a lot more production than what we’re doing currently,” said Matt Merritt, director of public relations for Poet and Poet-DSM.

Merritt said the company has considered cellulosic ethanol since some of its earliest days, but the investigation ramped up after the Renewable Fuel Standard included targets for cellulosic ethanol and called for 36 billion gallons of ethanol in the U.S. fuel supply by 2022.

Merritt said the country is producing about 15 billion gallons of grain ethanol per year. According to the Environmental Protection Agency website, the Renewable Fuel Standard calls for 16 billion gallons of cellulosic biofuel in 2022, while conventional biofuel is set to remain at 15 billion.

Poet-DSM already tested cellulosic ethanol at a research facility in Springfield and has constructed a 20- to 25-million gallon cellulosic ethanol plant next to an existing 50- to 60-million gallon grain ethanol plant in Emmetsburg, Iowa, and Merritt doesn’t expect grain sales to fall if new plants start cropping up around the Midwest.

“There’s plenty of room in the market to use more ethanol than we are today,” Merritt said. “We’re seeing a good market starting to develop for 15 percent ethanol blends, and we think that’s going to continue.”

Merritt said grain ethanol is cheaper to produce, but cellulosic ethanol further reduces carbon and greenhouse gas emissions. Ethanol is the same regardless of its source, so cellulosic and corn ethanol can be mixed together. Furthermore, Merritt said the development of cellulosic ethanol has led the Emmetsburg facility to spend an additional $20 million per year on materials provided by local farmers.

Poet is not planning any new corn ethanol plants, Merritt said, but he did not rule out building farther west than Mitchell in the future. He said the plant has been great for the company and is unique because it is located close to a city that is larger than most other Poet locations.

Poet has played a part in the community beyond buying corn, Pitz said. Pitz is on the agriculture advisory committee for MTI. She said the plant lets MTI students farm open ground on the Poet campus, and several current employees are Mitchell Tech grads.

The company also helps out the 34-person town of Loomis by plowing its roads after snowy weather, Pitz said, though there isn’t much more interaction beyond that.

Pitz said Mitchell was a “prime candidate” for a cellulosic ethanol plant, but the company is still a few years from deciding if that could happen.

Since 2006, the Mitchell plant has expanded its rail line and added equipment and storage, but Pitz doesn’t foresee any major changes on the horizon. But in the fast-moving ethanol industry, nothing’s written in stone.

“On my radar right now, no, there isn’t,” she said. “But ask me in six months, there could be.”