Producer Spotlight : Chippewa Valley Ethanol Company

Interview with Mike Jerke, general manager at Chippewa Valley Ethanol Company


Q. Please tell us a bit about why Chippewa Valley Ethanol Company (CVEC) was established and its history over the years. What makes CVEC unique?

A. Chippewa Valley Ethanol Company (CVEC) began as a dream between two Benson, Minnesota men more than two decades ago. John Carruth, a local farmer, and Ray Millet, the local electric cooperative manager. The two wanted to make the most of the area’s corn production while also stabilizing electricity rates. Their answer was Chippewa Valley Agrafuels Cooperative (CVAC), a group of more than 650 shareholders that included producers, elevators, and local investors.

CVAC became the general partner of the ethanol partnership (CVEC) and construction on the facility began in June 1995. The first bushel of corn was ground on April 26, 1996 marking the start of full operations at CVEC.

Heartland Plant 1

Originally conceived as a 15 million gallon per year facility, CVEC currently produces nearly 50 million gallons per year. It is still a small-town Minnesota company but has grown to 975 cooperative members; the majority of which live within a 50 mile radius of the plant.

CVEC has grown and diversified into direct selling of E85, industrial ethanol production, and beverage (vodka) production. We count our culture of innovation as a significant strength that has led to solid returns for our member/owners.

In addition to our local efforts, we are member/owners of Renewable Products Marketing Group (RPMG) which is one of the premier ethanol and co-products marketing firms in North America. Located in Shakopee, Minnesota, RPMG is producer owned and focused on providing value back to its members.

Finally, we have ownership interest in four other ethanol facilities and continue to see strategic investments in production as a long term benefit to our shareholders.

Q. What has CVEC's impact been on the local economy and surrounding communities?

A. The direct effect our Company has had on the surrounding economy can be measured by the cash distributions that have been sent out thru the years. Since inception, CVEC has returned over $93 million to our members. Additionally, the Company employs 50 people and like other ethanol facilities utilizes numerous local businesses for services such as trucking, millwright, electrical work, miscellaneous business functions, and so forth.

Q. What do you see as the biggest threats to the ethanol industry in Minnesota in the short-term and in the long-term?

A. The biggest threat to the ethanol industry in Minnesota is complacency. Ethanol has revitalized our rural communities and provides a clean cost competitive alternative to air-polluting petroleum. We cannot lose sight of that or take it for granted. Unsubsidized ethanol is competing against petroleum, a product that recently ‘celebrated’ 100 years of taxpayer support. Oil subsidies continue to cost the taxpayer $4-5 billion every year.

It is certainly important that we continue to look for renewable alternative sources to replace our dependence on fossil fuels but we need to remember that the only viable solution currently is ethanol. Big Oil will use every opportunity to lull the American public into thinking there is no energy problem. If we are complacent, our neighbors and many allies will only hear the Big Oil message.

Q. What are your feelings on the role of the Minnesota state government and its policies affecting local ethanol producers? Are there policy changes you'd like to see that would greatly impact the Minnesota ethanol industry?

A. Minnesota needs to remember how to be a leader. In 2003, the State led the nation with the embracing of 10% ethanol in every gallon of gasoline. As an early adopter of E85, Minnesota boasts the highest number of retail stations providing E85 in the nation. Currently, the State Legislators are considering bill language to set aggressive targets for even more use of alternative transportation fuel. While all of that is good, as a State we have yet to aggressively roll out E15 as an option to the consumer. As the most vigorously tested fuel in history, there are no more federal barriers to E15 use in vehicles model year 2001 and newer. Yet in Minnesota, the State that led the way with higher ethanol blends, we do not yet see a collective effort to encourage and support the deployment of E15.

State government needs to focus itself on the collective good E15 represents and move the ball. We do not need to reinvent the wheel. What was once done with E85 can be replicated with E15. Let’s be a leader again. Or at the very least, try to catch up with Iowa.