Thank you for all of your hard work and for the attention given to our concerns.

Transcription

1 Testimony for Steve Murphy General Manager POET Biorefining-Laddonia & POET Biorefining - Macon United States Environmental Protection Agency Public Hearing EPA HQ OAR June 9, 2016 Good [morning/afternoon], My name is Steve Murphy and I am the General Manager for two POET Biorefining plants. One is located in Laddonia, MO and the other in Macon, MO. These are 2 of the 27 POET plants in the country. Between these two plants we have 92 full-time employees who together worked to produce 105 million gallons of ethanol and 300,000 tons of animal feed last year. Additionally, both plants produce corn oil, liquefied CO2, and cogenerate 25MWH combined heat and power electricity for the grid through a partnership with our local electrical plant co-op. I am also pleased to report that we will soon add another 15MWH of CHP to the grid in an upcoming project, further displacing fossil fuel generated energy. Both plants are 80% owned by local farmer investors who supply the corn and sorghum we process. We employ dozens more people indirectly and did over $300 million dollars of economic activity which is a very big number in rural counties. Last year I appeared before you to make a single point; that the proposed 2016 rule would harm those who have tried to abide by the Renewable Fuel Standard as passed, and reward those who have sought to stymie its purpose since day one. Today, as margins in the ethanol industry are tight, farmers continue to see corn prices well below the cost of production, and investment in advanced biofuels projects have stalled, I am here to reinforce my statement last year as we review the 2017 proposed rule. While acknowledging the increase that EPA has called for in its proposed volumes, it still is short of the statute and has investors in our two plants concerned. These are the same men and women who we will need to help get any cellulosic expansion off the ground in future years. If their investments are not realized, how will I be able to convince them to invest in a newer technology that still is maturing? From all reports we receive, the cellulosic Project LIBERTY is now ramping up production, and we are excited for this technology to be rolled out to other plants in the future. On behalf of my two plants, we want to be next. But market certainty must be achieved, and unfortunately this

2 proposed rule continues to muddy the water. I cannot say for certain whether next year s rule will be better or worse. As such how can I tell investors their dollars will be well-tended? When the RFS was passed the people in our industry were given a promise; produce clean fuels and there will be a place for them in the marketplace. As I said last year, we thought a deal was a deal. So our industry built out the capacity to supply 15 billion gallons of renewable fuel. The EPA is so desperately close to achieving the statutory numbers, and I know the economists and marketers here today can prove that the market can absorb the full 15 billion gallons. So I can only ask that you lend them your ear and work tirelessly through the data. Thousands of families are counting on you. So on behalf of my teammates, my town, and my industry, let s abide by Administrator McCarthy s promise and get this law back on track. Together we can finish what we started and bring true diversity to the fuels market that will result in cleaner healthier air for our nation. Thank you.

3 Testimony for Greg Olsen General Manager POET Biorefining-Corning United States Environmental Protection Agency Public Hearing EPA HQ OAR June 9, 2016 Good [morning/afternoon], My name is Greg Olsen and I am the General Manager for POET Biorefining in Corning, Iowa. At our plant we have 44 full-time employees who together worked to produce 73 million gallons of ethanol and 207,000 tons of animal feed last year. We pay over $480,000 in taxes to the county and we are an active member in our local community. I am here again this year to speak from the perspective of a plant manager who only wants to produce fuel and hopes in the future to have a cellulosic plant to manage. I hope to use my short time here to give you a picture of why I am concerned about the future of my plant and the small town our team so dearly loves. As I mentioned last year, the company I work for, POET, recently launched the first-of-its-kind cellulosic plant in Emmetsburg, Iowa. It s not too far away from Corning. In conversations I had with executives from our headquarters back in 2013 and earlier, they spoke about how I would need to prepare our plant to bolt on a new cellulosic project in the future. I was not the only POET General Manager to have those discussions.. For Corning, that would mean a whole new plant constructed and a whole bunch of new jobs created. It would mean new revenues for our 1,860 farmer-suppliers and more trucks that need driving to bring the biomass to our facility. Last year, I mentioned that discussions around bringing a cellulosic plant to Corning had quieted. Unfortunately, corporate continues to indicate they are uncertain if EPA is committed to increasing volumes of ethanol to statutory levels. I continue to hear from my executives terms like regulatory uncertainty and lack of market access and unclear path to commercialization. In one conversation, I was told that if they are willing to cut the total renewable volumes by two hundred thousand gallons, they may be willing to pull the rug out from underneath us on a more expensive and risky cellulosic project. Like last year, the only request I have for you today is to please do whatever you can to ensure that those in charge at POET feel that there is enough certainty to keep rolling out new

4 cellulosic plants. If what is on those pages of the RVO proposal is not strong enough, please make it stronger. Our town has done everything that has been asked of it under the RFS. We have created a significant amount of American-made fuel that is cheaper and cleaner for American drivers. And, we are ready to do more. Give our company s leadership the confidence it needs to build and grow the biofuels industry. Thank you for all of your hard work and for the attention given to our concerns.

5 United States Environmental Protection Agency Public Hearing EPA HQ OAR June 9, 2016 Dale Samp, Samp Family Farms Testimony Good afternoon, My name is Dale Samp. My family and I farm around 2300 acres in north central Missouri. We raise corn, soybeans, and wheat as well as do some custom farming. Our closest and best market for corn is the ethanol plant in Macon so all of our corn production goes to that location. I have also served on the board of the POET Macon plant since it opened. I came here today because I know firsthand the impact biofuels has on our rural communities. Before my son Kyle came back to our farm full-time in 2010 he worked as an intern at the plant in Macon while in college and later became a grain buyer at Macon before moving to Laddonia to become its commodities manager. My oldest son Andrew has worked for POET since he graduate from college and works at the POET plant in Gowrie, IA today. If it weren't for these plants, I am not sure if my boys would have any connection to agriculture or the rural America we love so dearly. I also know how excited we are that someday we might be able to bring a cellulosic plant to Macon. For me, selling corn stover would be a value add and give me a chance to economically clear residues from my fields that would otherwise sit there and decompose unused. You see, I want to be part of first generation of ethanol leading to the second generation. Like I said, I sit on the board at Macon, and we are just waiting for the right opportunity that makes sense for our investors to get on board. Right now, it sounds like there is a great deal of uncertainty thanks in part to confusion over the past few years around this rulemaking. But let me be clear, if you provide the certainty, we will move forward. And perhaps years from now as more clean fuels are being used and my sons are still working the fields maybe with their sons and daughters, we will be able to look back and say we did something great together. All I ask, is that you do your part to help that become a reality, and get this rule working again. Thank you.

6 Good morning, My name is Steve Seabrook and I work for POET Ethanol Products in Wichita, Kansas. We are the marketing arm of POET, LLC. In this role, we market ethanol for 34 ethanol refineries including POET s 27 plants. In total we represent over 2 Billion gallons of ethanol annually. First, I would like to express my appreciation for the timely release of the 2017 target volumes. This allows the proper amount of time for stakeholder comments to be compiled and received, along with the proper amount of time for those comments to be evaluated and applied, prior to formal publication of the target volumes. Additionally, I would also like to compliment the EPA for indicating that no compelling evidence exists that would prevent the nationwide average ethanol concentration in gasoline moving above 10%. The acknowledgement that no blend wall exists is critical as our industry continues to make significant investments in retail infrastructure that will allow ethanol to efficiently flow into the gasoline pool at levels well above 10%. Our industry efforts around Prime the Pump coupled with tremendous support from the USDA s Biofuel Infrastructure Partnership has allowed some of the largest gasoline retailers in the U.S. to install E-15 infrastructure that will provide consumers with even more access to higher blends of ethanol. POET Ethanol Products spends a significant amount of time understanding U.S ethanol supply and demand. With this understanding, we evaluated the proposed 14.8B target for non-advanced biofuels with two key pieces of information in mind: First, regarding gasoline demand, we feel the latest STEO includes expected gasoline demand that is understated by one percent, which is the equivalent of 150MM gallons of ethanol demand not currently included in the 14.8B target. When you combine this increase with small adjustments to expected growth in E-15 and E-85, coupled with the number of diesel RINs that qualify within the D6 category, it is our feeling target volumes in the non-advanced biofuel category are underestimated by 200MM gallons. Second, we believe the ethanol industry can sustain production rates equal to 15B gallons on an annual basis. When you combine these factors, we are convinced that a 14.8B non-advanced target is too conservative as we transition to Therefore, based on the information mentioned above, it is our request that the EPA give serious consideration to include an additional 200MM non-advanced biofuels in the 2017 target. Not only would this change be realistic, but it would return our target obligation to the original 15B of nonadvanced biofuels outlined in the original statutory targets from This target obligation would also support the EPA s desire to maintain a reasonable amount of RIN availability in the marketplace for obligated parties. I thank you for the opportunity to speak today, and look forward as the renewable fuel industry continues to prove itself as a sound economical alternative in in today s liquid fuels market. Sincerely, Steve Seabrook