EPA hearings on Renewable Fuel Standard: Testimony of Steve Murphy, GM, POET Biorefining-Laddonia & POET Biorefining – Macon

Good afternoon, My name is Steve Murphy and I am the General Manager for two POET Biorefining plants. One is located in Laddonia, Missouri and the other in Macon, MO. These are 2 of the 27 POET plants in the country. Between these two plants we have 90 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. 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.

I am here to make one and only one point today. What this proposed rule does will 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. I ask you to take a step back and ask yourselves, should the men and women who have worked hard and invested to make these ethanol plants a reality be penalized while the oil companies get their wish and maintain the 90% mandate for gasoline otherwise known as the “blend wall”. Much is made over the supposed 10% mandate for biofuels, but rarely if ever do you hear these rules referred to as a 90% mandate for oil.

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. Perhaps we are a bit too honest here in this part of the country, but we thought a deal was a deal. So our industry went ahead and built out the capacity to supply 15 billion gallons of renewable fuel. Now, with this rule, the EPA is saying well yes that is what the legislation said, but the oil companies also known as OBLIGATED parties aren’t quite as obligated to use your renewable fuels as you were led to believe.

Meanwhile we hear about the blend wall and how they can’t sell the fuel and don’t control the retail sector. Are you really suggesting that the sophisticated marketers that the oil companies employ can’t find a way to incentivize retailers to buy and offer mid-level blends? The standard ethanol blend in Brazil is now 27.5% ethanol. How can a developing country like Brazil convert all their infrastructure and vehicles to run on 27.5% ethanol, and the USA can’t manage 15% with cars from the same automakers? One must assume Brazil also has boats and small engines. How can Brazil accomplish this seemingly impossible feat?

Cut through all the jargon and the rhetoric and the sound bites and what are you left with? A rule that tells the oil companies they don’t have to lift a finger to comply with the statute. Oil companies are rewarded for limiting competition. You also get our investor corn farmers who are trying to breakeven with a record corn supply, reduced government crop subsidies, and corn prices at a 5 year low. You are telling the people that built out the biofuel supply chain to the over 15 billion gallons called out in the law, that they lose for trusting the government to apply the law as written.

So on behalf of my teammates, my town, and my industry, let’s get this law back on track. On behalf of rural America, lower fuel prices, higher octane performance, and cleaner air, let’s do what we set out to do and build diversity and competition into the fuels market. And on behalf of all Americans, let’s show some foresight and do it while oil prices are low so that when they come back up, we are prepared to deal with them.

Thank you.