Interview with Brian Kletscher, CEO of Highwater Ethanol.

Q. Tell us a bit about the history of Highwater Ethanol and how it has advanced into the operation it is today?

A. Highwater Ethanol was formed in May 2006. The construction process occurred from the fall of 2007 through June 2009. Highwater Ethanol, LLC constructed a 50 Million gallon ethanol facility in Lamberton Township, Lamberton, MN. The facility is located 1 mile west of Lamberton, MN along US Hwy 14 and the CP/Dakota Minnesota & Eastern Railroad.

In August 2009, Highwater Ethanol ground its first bushel of corn and produced its first gallon of ethanol. We currently produce at the rate of 57 million gallons of denatured ethanol per year. Highwater Ethanol produces approximately 145,000 tons of DDG {Dried Distillers Grains} and approximately 100,000 tons of MDG {Modified Distillers Grains}.

Highwater Ethanol is expected to operate 24 hours per day, 7 days per week, 365 days per year; with scheduled shut downs for routine maintenance. Highwater Ethanol, LLC currently employs 40 full time employees. The ethanol plant is a state of the art facility built by Fagen/ICM with technology to control dust and noise. Before Highwater Ethanol was able to start building, the plant needed a wide variety of environmental protection permits that are required by the State of Minnesota.

These permits include air emissions, NPDES, and above ground storage tanks administered by the Minnesota Pollution Control Agency. Water appropriation permits were administered by the Minnesota Department of Natural Resources.

Q. How did your personal interest in ethanol begin?

A. I have always been involved in the Ag industry. Farming for 30 years in Redwood County, MN as well as serving as a Redwood County Commissioner from 1997 - 2008. My 30 years of corn and soybean farming and dealing with low market prices, led me to embrace the ethanol industry in the 1980s. I knew that we needed to utilize the corn that we produced to generate additional economic development locally, rather than shipping the corn out of the region. I believe in the State of Minnesota, we have been successful in accomplishing this.

Q. How did you advance this interest to develop into the career you have now?

A. In 2006 when we started Highwater Ethanol, I lead the development of Highwater Ethanol and served as its President from 2006 - October 2008. On November 1, 2008 I began as the CEO.

Q. What do you see as the biggest threats to the ethanol industry in Minnesota in the next year?

A. The biggest threats will be in relationship to Federal and State government decisions on the use of biofuels. Also, changing the perception that ethanol produced from corn is not environmentally friendly. We know how to grow corn in Minnesota and the United States. Let’s make sure we continue to support corn-based ethanol. My fear is that if corn-based ethanol does not survive, that no new biofuels will be able to survive. Corn-based ethanol is the nucleus of ethanol and biofuels. All new technology always seems to be five years out; we are going on eight years since I first heard that.

Q. Next five years?

A. In the next five years we will need to make sure the biofuels industry is strong. That allows financing to become better available for the growth of the biofuels industry. Federal and State governments need to give assurance to the current industry that we will continue to utilize biofuels now and into the future. We have developed a great renewable fuels industry. Being able to obtain EPA approval for tested renewable fuels will be vital if we intend on growing the biofuels industry.

Q. What do you view as the three most important things you can do as a CEO to ensure the continued success of the Highwater Ethanol plant?

A. Maintaining operational efficiencies is important for our business, so that we are able to produce more ethanol from the same bushel of corn. Maintaining an excellent staff where each member knows their job and is doing it very well is important. Maintaining business relationships with consumers, vendors, and banks are all vital to our business.

Q. What would you like consumers to know about your plant, your employees, and the products produced by the plant?

A. Our plant is a very efficient facility. We produce approximately 2.897 gallons of denatured ethanol per bushel of corn. We utilize approximately only .646 kw hours per gallon of ethanol produced, 23,790 btu per gallon produced and 2.15 gallons of water per gallon produced. We are a clean facility where each employee knows their job and does it well. This has allowed us to gain the efficiency that is needed to maintain operations. The employees are all very well trained. Each takes extreme pride in their job and the facility. We are proud to produce a renewable fuel that is consumed everyday in the State of Minnesota. We are proud to be a part of an industry that can produce a product from corn that is grown right in our region.

Q. Regarding the local economy in the Lamberton area, what impact do you feel Highwater Ethanol has in the area?

A. Highwater Ethanol has potentially increased corn prices in the area between $.07 -$.10 per bushel. Spread that over 19 million bushels and that is $1.3 million dollars per year. In addition our plant has a payroll of nearly 2 million dollars per year. We feel that the impact is very beneficial for the Lamberton area.

Q. What role do you see local and state elected officials playing in keeping the ethanol strong and moving forward into the future?

A. As a prior local elected official, I know the direct impact that government decision making can have on a business. The State of Minnesota has the opportunity to put Minnesota in the lead of biofuels production again by fostering the use of ethanol and other biofuels. We have E15 in the palm of our hands and we have not been able to foster its introduction into this state.

We will continue to press hard on this. I believe elected officials can better understand the biofuels industry by touring a facility and gaining firsthand knowledge on how biofuels are produced, where they are produced and the capabilities that ethanol has in regard to displacing non-renewable oil/ gasoline.

Q. In your opinion, how does renewable fuels energy policy on a federal level impact what happens here in Minnesota?

A. Federal policies impact how ethanol and other biofuels are utilized in the United States,  which does affect Minnesota. Both the EPA’s approval of fuels and the RFS 2 standards affect where biofuels are produced and what quantity of biofuels are being used or imported/exported.

Q. How do you see “second generation” or “advanced biofuel” technology meshing together with Minnesota’s existing biofuel plants and infrastructure?

A. The opportunity for additional technology is here right now. There are facilities at this time reviewing technology that may allow those facilities to produce a different product or a combination of products. The meshing of technology is a logical step, as current facilities have infrastructure in place such as natural gas, electricity, storage tanks, roads and other related items. We will need to walk together as we review new technology and the capabilities that it may bring in the future.