Ethanol Advocate, Presidential Host

Southwest Iowa Renewable Energy has had a marathon year, accommodating a presidential visit, managing change and showing poise in the face of a national crisis. A year after Trump's historic drop in, the plant keeps rising to new challenges.
By Tom Bryan | July 14, 2020

FROM JULY 2020 ISSUE

 

Ethanol Producer Awards

BOARD OF THE YEAR

SOUTHWEST IOWA RENEWABLE ENERGY 


After a lifetime of running farms and ag enterprises in and around Harrison County, not much surprises Karol King—he’s seen it all in western Iowa—but a phone call from Mike Jerke early last summer was a once-in-a-lifetime stunner: The president of the United States was coming to their ethanol plant, and they had just days to prepare.   

“Mike called after finding out about the possibility of Trump making his big E15 announcement in the area, and it was starting to look like they had chosen our plant,” says King, chairman of the board for Southwest Iowa Renewable Energy LLC, a 130 MMgy ethanol plant near Council Bluffs, Iowa. “Mike was looking for our approval, and we said, ‘Absolutely, yes. Anything that draws national attention to ethanol and E15, we support.’ We told him to do whatever was needed to make it happen, and his team went to work.”

In the days leading up to President Donald Trump’s June 11, 2019, visit to SIRE, it was an all-hands-on-deck effort to make sure the plant, and the entire surrounding property, was tidy, safe and ready to host not only the president—along with his Secret Service detail and administrative entourage—but hundreds of media and invited guests from around the country.

“I didn’t realize just how many invitations went out, and from how far people were coming,” King says. “It was amazing to see that much enthusiasm.”

President Trump dropped in on SIRE, officially, to celebrate the final rule issued by the U.S. EPA, less than two weeks earlier, to lift the summertime restriction on E15, making it possible for the higher ethanol blend to be sold year-round. During his speech, President Trump hailed the decision as a step toward greater energy independence and lower prices at the pump. “Those savings go right into the pockets of hard-working families across our land,” he told the crowd. Trump was joined on stage by an area farmer, a local business owner and a SIRE employee, after touring the facility and grounds with Jerke, CEO of SIRE, and Renewable Fuels Association President and CEO Geoff Cooper.     

Reflecting back on the whirlwind Trump visit, a year later, King says he’s proud of how quickly and diligently SIRE’s personnel worked to accommodate the president. Jerke, too, reflects back on the event with a sense of deep appreciation for his team and his board. “We knew it was going to be challenging, but with a supportive board behind us, good people on the ground and excellent guidance from the White House advance team, everything came together nicely,” he says. “Everyone put in long days—and it was hectic—but when the president arrived on the ground, it was all very organized and prescribed.”  
  
Now, 13 months later, still not out of the COVID-19 crisis—and with the president’s reputation in ethanol country dented by his administration’s liberal allocation of small refinery exemptions (SREs)—SIRE was ratcheting up production after throttling back during the spring downturn. “We certainly feel better about things now, as compared to early May or early April, but we have a long way to go,” Jerke says, adding that he feels more obligated than ever to be vocal about stopping the EPA from granting more unqualified SREs. He says SIRE’s board encourages him, and other management personnel, to be vocal industry advocates. Often, that simply means standing up for what’s right. “We just do what we can to help educate people on the SRE issue, and once they see it for what it is—real abuse, and a travesty—they get it,” he says. “It’s easy to be passionate when you know you’re on the right side of an issue.”

Consistency Through Change
SIRE’s board of directors, small today compared to its 14-member structure during construction, is settling into its new form after two major departures in the past year. After the plant was built, more than a decade ago, SIRE’s board was drawn down to seven members. King says the board has consisted of both “independent” ag-based shareholders and “industry” seats held by outside companies with a stake in the facility.

SIRE’s longtime seven-member board included one representative of ICM Inc., the plant’s design/builder, and two representatives of Bunge, also an original investor. Recently, ICM exercised its option to exit SIRE, and Bunge also negotiated buyout terms. And while ICM and Bunge have departed SIRE, both King and Jerke say they have deep respect for what those members, and others, contributed. “Boards are reflective of the people that are there today, but also consistent leadership over time,” Jerke says. “Our successes over the years represent the collective efforts of all those folks working together. No question, those different people pushed SIRE to where it is today.” 

Currently, SIRE’s board consists of King and four other members, all with western Iowa ag connections. They include Mick Guttau, Hubert Houser, Ted Bauer and Jill Euken. Jerke says the way the board manages today, and over the years, is empowering. “SIRE has it figured out,” he says. “Karol and I talk all the time, but at the end of most of our discussions, he reminds me that he’s not interested in micromanaging. That sort of relationship comes from a place of confidence and it requires trust and transparency. At the end of the day, our board is effective because it has good leadership.”          

Likewise, King says, freeing up the plant’s management and personnel to make day-to-day decisions makes SIRE operationally effective. “Our core mission has remained constant over the years,” he says. “We look out for shareholder interest and support management. The personnel at SIRE work for Mike—they report to him—and we try to stay out of his way and let him lead.”

Courage During COVID
While the ethanol market suffered during the pandemic, SIRE stepped up to produce hand sanitizer when it was truly needed. The plant has made headlines for a self-branded product dubbed “SIREtizer,”which it has produced and bottled at the facility. 

Since March, SIRE has produced and distributed thousands of gallons of SIREtizer across Iowa. “We’ve donated product to area hospitals and first responders,” Jerke says. “We’ve also sold product. We delivered hand sanitizer to restaurants, which helped some of them jumpstart their curbside offerings. We also provided alcohol to other entities that were positioned to make product. That went well, and it provided an important cash flow we hadn’t counted on. First and foremost, it was about fighting this pandemic and rising to a national need, but the cash flow was significant to us given the dire situation all producers were in.”

Jerke says the U.S. Food and Drug Administration’s latest guidance, issued on June 1, “took the industry backwards” in terms of being able to supply alcohol for hand sanitizer. “We’ve let our customers know that this new guidance exists, and if they are able to refine our product to those more stringent specifications, we’re happy to supply it within the framework of that guidance,” he says, adding that SIRE plans to continue to pursue sanitizer-related opportunities. “Necessity is the mother of invention, and we think there is still a pathway for participation in that market. We just need to figure out what our next move is.”

Southwest Iowa Renewable Energy was nominated for this award by Robert White of the Renewable Fuels Association.