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CREATING ECONOMIC VALUE FROM CORN

301 20th Avenue SEWatertown, SD 57201

Phone: (605) 882-8480Fax: (605) 882-8982

w w w . g l a c i a l l a k e s e n e r g y . c o m

13435 370th AvenueMina, SD 57241

Phone: (605) 225-9900Fax: (605) 225-9906

NEWSLETTER FEB 2012 - MAY 2012

GLACIAL LAKES ENERGY, LLCP.O. Box 933Watertown, SD 57201

www.glaciallakesenergy.com

PRSRT STDUS POSTAGE

PAIDPERMIT #550

WATERTOWN, SD

Don’t Mess with the RFSJim Seurer, Chief Executive Officer

Cautionary Statements Regarding Forward- Looking Statements This document contains forward-looking statements involving future events, future business and other conditions, our future performance and our expected future operations and actions. In some cases you can identify forward-looking statements by the use of words such as “believe,” “expect,” “anticipate,” “intend,” “plan,” “estimate,” “predict,” “hope,” “should,” “could,” “may,” “future,” “continue,” “potential” or the negatives of these terms or other similar expressions. These statements are based on management’s beliefs and expectations and on information currently available to management. Forward-looking statements are only our predictions and involve numerous assumptions, risks and uncertainties. Important factors that could significantly affect future financial condition and results include, among others, operating margins in the ethanol industry, the rapid pace of expansion in the industry, the cost of corn and the price of ethanol, changes in ethanol supply and demand, changes in current legislation or regulations that affect ethanol supply and demand, disruptions to infrastructure or in the supply of raw materials, the results of our risk management and hedging transactions, and ethanol industry valuations generally. Our actual results or actions may differ materially from those set forth in the forward-looking statements for many reasons, including events that are beyond our control or assumptions not proving to be accurate or reasonable. We caution you not to put undue reliance on any forward-looking statements, which speak only as of the date of this document. We cannot guarantee our future results, levels of activity, performance or achievements.

Coming to a Gas Station Near YouBob Dineen, Renewable Fuels Association / President and CEO

“GLE Core Values: Integrity, Professionalism, Accountability, Respect, Teamwork”

Managing Your Wait Time GLEWatertownhasstruggledfromthebeginningwithsmallersizedpits forcornreceivingwhich,attimes,hascausedadditionalwaittimefortheproducer(s)deliveringcorntotheplant.Theboardofdirectorsandmanagementrealizethattimeismoneyforproducers.Theboardtaskedthemselvesandmanagementtolookatwaystoincreasecorndeliverieswithinthesiteandwaittimes. “Thenumberoneissueisthesizeofthedumppitsandourequipment’sinabilitytohandlethevolumeofcorndumpedduringagivendayinamoreexpedientmanner.Wehavelearnedthatifourwaittimeforunloadingcornislong,producersmayopttodumpcornatourcompetitors.Inturn,wemustthentrytosecurethecornwelostbybuyingitbackwithahandlingfeeattached,”reportsCEOJimSeurer. Theinitialestimatestoremedytheissueswerewellintothemillionsandmanagementdidn’tfeelthatlevelofexpenditurewaswarrantedallatonetime.Therefore,a“phasedapproach”hasbeeninitiated;meaningthatthelesscostlyprojectswerelinedupfirstso as to determine if the problems would be mitigated or resolved before the moreexpensivesolutionsareimplemented. GLEcontinuestofinetuneitsproceduresandbecomeadeptatoperatingagrainreceiving facility which was originally designed for a 40 million gallon plant. Whilemanagement believes the situation has improved somewhat, there are days whentrucksmaybackup. Onerecentstep takenbymanagementwasto track thehistoricalcornreceivingtimestodeterminethebestandbusiesttimesoftheweekattheWatertownfacility. Roger Hansen, Director of Grain Commodities, says data was taken from corndeliveries from January through March 2012 to determine when peak times occur.“We’redoingwhatwecantogiveourcustomershelpfulinformationsotheycanbetterplanaroundourbusiesttimes,”saysHansen.“However,busydayscanvarydependingontheseason,theweather,orthemarketandthecurrenttrendsmayquicklychange.Wearehopingthis informationwillhelpbalanceoutdeliverydaysandalleviate linelengths” HansenalsoencouragesproducersandtruckerstochecktheplantwebcamattheGLEwebsite(www.glaciallakesenergy.com)toviewrealtimereceivinglinesatboththeWatertownandMinafacilities.

Ethanol: Increasing National SecurityBy Bob Dinneen, President & CEO of the Renewable Fuels AssociationReprinted from the Ethanol Producer Magazine

America’saddictiontoforeignoilhashadasignificantimpactonoureconomyandournationalsecurity.ThemillionsofbarrelsofpetroleumimportedtotheUnitedStates not only cost billions of dollars, they also require putting military lives indangerprotectingthefuelsupplylines.TheonlyeffectivestrategyforimprovingU.S.energysecurityisinreducingthenation’soildependence. At10percentoftheU.S.fuelsupply,usedin97percentofthenation’sgasoline,ethanolprovidesadomestic,renewablealternativetoimportedoil.In2011,theuseof13.9billiongallonsofAmericanethanolhelpedreducetheneedforimportedoilby485millionbarrels.Thatisroughlyequivalentto13percentoftotalU.S.crudeoilimports,savingtheAmericaneconomy$49.7billion. Reducingoilimportdependencyhasbeenanationalsecuritypriorityandpolicyobjectivesincethe1970s.Yet,onlysince2005,theyeartherenewablefuelstandard(RFS) was first enacted, has the U.S. seen a reversal of the long-term trend ofincreasingoilimportdependence.Duringthistimeframe,America’soildemandhasdecreasedwhileimportshavefallenfrom60percentto45percent,inlargepartduetotheincreaseindomesticethanolproduction.In2010,U.S.oil importsfellbelow50percentforthefirsttimesince1997.Withoutethanol,withoutthefoundationoftheRFS,ouroilimportswouldhavebeen52percentlastyear.MaintainingcriticalpoliciesliketheRFSisessentialtoincreasingournationalenergysecurity. Whilegasolinedemandiscurrentlyatitslowestpointinmorethanadecade,prices at the pump continue to run up due to the increasing cost of crude oil.Nevertheless,pricesofgasolinewouldundoubtedlybehigherwithouttheenormouscontributionofethanolinourfuel.AstudybyIowaStateUniversityandtheUniversityofWisconsinfoundthatin2010,domesticethanolproductionhelpedlowergasolinepricesby89centspergallon.ThatmeanstheaverageAmericanhouseholdspent$800lessongasolinethanwouldhaveotherwisebeenthecase.Theresearchersalsofoundthatforthefirstdecadeofthe21stcentury,growthinethanolproductionandusehelpedkeepgasolinecheaperbyanaverageof25centspergallon.Assuch,Americandriverssavedanaverageof$35billionannuallyongasolinepurchasesfrom2000to2010. The Energy Information Administration recognizes the contribution ethanolhas made to increasing national security stating, “increases in domestic biofuelsproduction…playedanimportantroleinmoderatingimportdependence.”EIAalsosaysethanolgrowthsince2005is“helpingtodisplacetraditionalhydrocarbonfuelsandsoreducingpetroleumimportneeds.” Ethanol presents the U.S. with a critical opportunity to expand domesticenergy production and reduce imports. Today, ethanol is the only commerciallyviable renewable fuel alternative we have to imported oil. The future of energyindependence,andofoursecuritybothabroadandathome, is takingplacerighthere,rightnow,everyday,inethanolplantsacrossthisgreatnation.

The Renewable Fuels Association (RFA) promotes policies, regulations and research and development initiatives that will lead to the increased production and use of fuel ethanol. AneweraforAmericanethanolisbeginning–andnotamomenttoosoon. InearlyMay,thefinalstepinthefederalregulatoryprocessestablishedbytheU.S.EnvironmentalProtectionAgency(EPA)wastakenbyAmerica’sethanolproducers,includingGlacialLakes,tomakeE15alegalfuelforsale.

Asmanyreadingthisknow,ithasnotbeenaneasyprocess.Afterthreeyearsoftesting,retesting,bureaucraticredtapeandobstacleserectedbyindustriesthatdon’twanttoseemorerenewablefuelinthemarket,America’sethanolindustryhaspersevered.Now,ourindustrycanbeginofferingconsumersinSouthDakota,NorthDakota,Minnesota,Iowa,andallofthecountrywiththefuelchoiceatthepumpforwhichtheyareallclamoringfor. Let’sbeclear:widespreadadoptionandavailabilityofE15willtaketime.WhilethefederalregulatoryprocessforofferingE15isclearandallchallengesatthatlevelhavebeenovercome,muchworkstillremains. AswasthecasewithE10,statefuelregulationsinvirtuallyeverystatewillneedtobereviewedandadjustedtoallowforthesaleofE15.SomestateslikeIowa,Illinois,andKansashavealreadytakenthenecessarystepstoadjusttheirfuelregulationsfornewE15blendswhileotherstates,includingNebraska,stillneedtotakesimilaraction. Equally,ifnotmoreimportantly,ourindustrymusteducatefuelretailers,consumers,andthegeneralpublicaboutthemeritsofE15.WemustactivelyreachouttostationownersandpresenttothemafactualcaseforofferingE15blendsandprovidethemwiththenecessarytoolsinordertodoso.Here,theRenewableFuelsAssociationhascreatedtheE15RetailersHandbookavailableforfreeonitswebsitetoinstructanypotentialretaileronthestepstheymusttaketosafelyandlegallyofferE15. Ourindustrymustalsoaddressconsumerangstthatalwayssurroundstheintroductionofnewfuels.WemustassurethosedrivingvehiclesmadeinModelYear2001andnewerthatE15issafefortheirvehicle.WemustworkwithsmallengineadvocatestoinformoperatorsofsuchenginesthatE15isnotafueltheycanuse–butE10stillremainsasafeandeffectiveoption.Wemustemphasizeethanol’sroleinkeepinggaspricesdownandthejobsandeconomicbenefitsthatcomewithdomesticethanolproductionanduse. Otherchallengesstilllieinwait.Anti-ethanolposturingbysomemembersofCongressandongoinglitigationinvolvingEPA’sE15waiverstillthreatentoderailoureffortstobringacleaner,morecost-effectdomesticrenewablefueltomarket.Tobecertain,theburdenofmakingE15asuccessfulandviablefueloptionformillionsofAmericandrivers,andthusincreasingthemarketforethanol,liessquarelyonourshoulders.Itisincumbentonallofustoengageintheeffortsunderwaytoaddressstateregulatoryissues,informretailers,andreassureconsumerstosmooththeintroductionofchoiceatthepumpthroughE15. Theseareexcitingtimesintheethanolindustry.Weareembarkingonanewerainwhichourfutureisnottiedsolelytopublicpolicy.OurfutureisdependentuponourabilitytomaturefromanindustryseenaslittlemorethanafueladditivetoonethatisprovidingAmericanswitharealchoiceindecidingfromwheretheirfuelcomes.

New GLCP Membership Coordinator Shareholders who have membership-related questions can now contactJessica Eidson, GLCP’s new MembershipCoordinator.Eidson,anativeofCastlewood,SD, is a graduate of Northwest MissouriState University and has a degree inBusiness Management/Marketing andshehasbeen in thebusinessandfinanceindustry for the past eight years. Eidsonjoined GLE in April working in a full timeposition and will be available to assist

membersMondaythroughFridayfrom8:00am-5:00pmMembersareencouragedtocall(605)882-8480,ext1018oremailJessicaatjeidson@glaciallakesenergy.comtomakeanappointmentorwhentheyneedassistance.

Pictured left is GLE Maintenance Manager (Watertown) Adam Butterfield’s E30 ethanol race car. Watch him race every Sunday night at the Watertown Casino Speedway! Flag drops at 6:00 pm.

Idon’tknowaboutyou,butwhenitcomestotheeffectivenessoflawsandregulationspassedinournation’scapital,itseemswealwayshearmoreaboutwhatISN’TworkingratherthanwhatISworking.Contrarytopopularbelief,thereareregulationsthatactuallydowhatthey’reintendedtodoandtheRenewableFuelStandard(RFS)isaperfectexampleofthis. Backin2005,theUSCongressandPresidentBushpassedtheEnergyPolicyActof2005whichcreatedthiscountry’sfirstrenewablefuelstandardof7.5billiongallonsby2012.Dueinparttotheethanolindustry’shugesuccessinmeetingthismandate,thestandardwasagainrevisitedin2007undertheEnergyIndependenceandSecurityActof2007atwhichtimeitwasexpanded.TheUSethanolindustrycontinuestorespondtoapointwheretodaywenowhavethecapacitytoproduce15.0billiongallonsoffuelormorethan10%ofournation’sgasolinesupply.Pleaseconsiderthefollowing:

Withoutethanol(andtheRFS),ourimportofcrudeoilwouldhaveincreasedourdependenceonforeignoilin2011from45%to52%orroughly480millionadditionalbarrels. Onacumulativebasis,ethanolhasaccountedfor8outofevery10newbarrelsofliquidfuelproducedfromUSsourcessince2005. In2011,American-madeethanolcontributedmorevolumetotheUSfuelsupplythanthegasolinerefinedfromoilimportsindividuallyfromSaudiArabia,Iraq,Venezuela,

aandmanyotherOPECnations. InMarch2012,wholesalegasolinepricesaveraged$1.04pergallonmorethanwholesaleethanolprices. Ethanolisthelowestcostmotorfuelintheworld. USethanolproductionusedjust3%ofthe2011/2012worldgrainsupply. Theethanolindustry’sfeedco-productoutput(distillergrain)ranksastheworld’s4thlargestcorncropat39millionmetrictons. Since2000,foodpricesarealmostperfectlycorrelatedtooilprices(95%coefficient). USethanol(GLEincluded)hasbecomeamajorexporteroffueltounderdevelopedcountriesincludingBrazilwhosesugarcanecrophasbeenredirectedtowardthemore

pprofitableproductionofrawsugar.

(Source:RenewableFuelsAssociation–RFA) Despitetheeliminationoftheblender’staxcredit,wecontinuetohearcertainmembersofCongressbashourindustryandsomewouldevenliketorescindtheRFS.Thatwouldbeahugemistakeanditwouldcertainlyroll-backtheprogresswe’vemadetoreduceourdependenceonforeignoil…nottomentionthebenefitourindustryprovidestoimproveourhealththroughcleanerairorenhanceruraldevelopment(Americanjobs).Unfortunately,thesedetractorshaveonlyonethinginmind…theirre-election…astheytypicallycomefromstatesthatproduceoilorhavebeenfedasteadydietofmisinformationaboutourindustryandourproducts. Tothiswesay…”Don’tmesswiththeRFS”it’sworkingjustasitwasdesignedtowork!!!

Save the DateGlacial Lakes Energy – Watertown, SD will celebrate its

10 Year Anniversaryin August 2012 with tours of the facility,

a short program, and more. Watch for details!

Tell us how we are doing!Call our Customer Service Hotline at866-934-2419Corn Plantings Expected Higher

USDA’s March Planting Intentions and Stocks Report projected a larger-than-anticipated95.9millionacresofcornwillbeplanted thisspring. Inaddition,USDA lowered corn stocks by 150 million bushels which, says Chris Smith, GrainCommoditiesManageratMina,cameasashocktothetradeandpropelledthecornmarkethigher. In terms of corn planting acres, much of the Midwest has experienced dryconditions boding well for corn planting possibilities, says Smith. He remindsproducers that, as of this writing, there is still significantly more revenue in cornwhenfactoringininsurancerevenueguarantees. The next major USDA report will be Planted Acres on June 29. “Producersshouldbecautiousifthosereportsreflectlargeplantingsinbothcornandsoy,withpossiblereductionsinthenation’sspringwheatcrops,especiallyintheDakotas,”advisesSmith.“DonotbesurprisediftheSouthDakotacornplantingnumbercomesinata25%increaseover2011.” Hesays thatwitha largecornplantingnumberand the inversionseen in themarketforcornfromJulytoSept/Dec,basislevels“couldbecomeinteresting.”LastyearinJune,thecornmarket“found”300millionbushelsofstocksandthemarketwas limit lower. “This encouraged exports,” says Smith, “and, coupled with theimpendingVEETCexpiration,cornfuturesandbasislevelsrallied,alongwithethanolandexportdemand.”WiththeVEETCexpirationbehindus,Smithsaystheremaybesignificantlylessupwardpressureonthecornmarketasthesummerprogresses,unlessweatherfailstocooperate.

WATERTOWN CORN RECEIVING STATISTICS January 1 – March 31, 2012 LeastBusyDayandTime: Fridays:3:00pmtoclosing 29,148bushelsaverage

LeastBusyTime,AnyDay: 3:00pmtoclosing 32,622bushels

BusiestDayandTime: Tuesdays:9:00amtonoon 55,043bushels

BusiestTime,AnyDay: 9:00amtonoon 50,130bushels

Check Out Distillers Piling Program It’s time for cattle producers to consider contracting for GLE’s Distillers PilingProgram. “The cow/calf guys should really look hard at this program now,” saysDistillersSalesManagerRichZeller,whoexplainsthatproducerscancontracttheirorders now and schedule delivery for later, to be piled and covered until neededthroughthewintermonths.“This isanopportunetimetogetourmodifieddistillerfeedproduct,”explainsZeller,addingthatproducerscanchooseaflatpriceorsetituponanindexscale. In termsofGLE’sotherproducts,Zellersays thevalueof thedrieddistillers isincreasing in relation to the price of corn, primarily due to its acceptance in themarket.Syrupsupplyisverylimited,withsalesonlyavailabletocustomersalreadyusingoneormoreofGLE’sotherfeedproducts. On the export side, GLE’s dry distiller feed product continues to be exportedaroundtheworld,withdestinationstoCanadabytruckandtoMexicobyunittrain.UnittrainsarealsotakingGLEdistillerstotheGulfofMexicoandtheWestCoast,where it’s loaded ontoocean vessels. In April,GLE trucked productto Minneapolis to beloaded into containersthat will end up inKoreaorChina.Throughcoordination with thefertilizer industry, thosesame trucks were abletohaulfertilizerbackintotheGLEarea inorder toreducefreightcosts. ContactKathyGeffreorRichZellerat605-882-8916tocontractdistillerstoday!

Coloring Contest Winners PeterCottontailmadearareappearanceattheGLEmainofficeto judgethe150submissions to the first-ever Easter Coloring Contest. He was impressed with theentries,commentingthatGLEhasaverytalentedgroupofyoungartistsamongtheirmembership,makingselectionofthewinnersverydifficult.Aftermuchdeliberation,Peterselectedthreewinnersoutofthethreeagecategories,sendingeachoneaspecialEasterbasket.Hedidn’tstopthere.Duetothehighqualityofallentries,eachparticipantreceivedaspecialtreat.GLEappreciateseveryonewhoenteredthecontest.ThecolorfuldisplayofpictureshelpedbrightentheWatertownofficeduringtheEasterseason.Followingisalistofwinners.

Ages 4 and under:1st Place—Mariah Messmer, daughter of Jeff and Tricia, Wessington; 2ndPlace—Blaine Waldner, son of Bill and Miriam, Britton; 3rd Place—BrielleJenc,daughterofWayneandKristin,Watertown.

Ages 5-8:1st Place—Eric Kuhlman, son of Karl, Hazel; 2nd Place—Marie Wollmann,daughter of Andy and Jeanette, Faulkton; 3rd Place—Grace Wambach,daughterofJasonandRachal,Ipswich.

Ages 9-12:1st Place—Kate Campbell, daughter of Cris and LeAnne, Aberdeen; 2ndPlace—Samantha Jenc, daughter of Wayne and Kristin, Watertown; 3rdPlace—HaileySkiles,daughterofPaulandJulie,SiouxFalls.

Production Manager is Student for a Day GLE’s Watertown ProductionManager, Brent Bass, recently headedback to the classroom to get a closerlook at Lake Area Technical Institute’s(LATI) programs. As part of Lake AreaTech’sninthannual“StudentforaDay”program,Basswasoneof20communitymembers who were “enrolled” in aprogramofstudyatLATI.Bass,whoisanalumnioftheschool,shadowedastudentintheEnvironmentalTechnologyprogram,attendinglectures,labs, and participating in hands-ontraining.Thedayalsoincludedatourofthe campus, general information aboutthe school, and a luncheon. The eventwas designed to increase public awareness of technical education and Lake AreaTechinrecognitionofNationalTechnicalEducationMonth.“WehaveanumberofemployeeswhohavegraduatedfromLakeAreaTech,”saidBass.“ThiswasagreatopportunitytolearnmoreabouttheirprogramsandcoursesandtorediscoverhowvaluablethisresourceistoGLE.” Forthepastseveralyears,GLEhasalsoofferedaninternprogramforLATIstudents.LATIwasrecentlynamedoneoffivetoptwoyearcollegesinthefirstannualAspenPrizeforCommunityCollegeExcellence,chosenfromanoriginalpoolofover1,000.GLEisverypleasedtobeapartnerineducationwithLakeAreaTech!

Blender Pump Program Proves Popular Itdidn’ttakelongforSouthDakotagasolineretailerstotakeadvantageofthestate’sgrantsto help pay for installation of ethanol blenderpumps. Station owners began applying forthegrantsonJanuary9,andbymid-April,the$950,000budgetfor2012hadbeenawarded. “The purpose of the South DakotaEthanol Infrastructure Incentive Program isto encourage blender pump installation andusage,whichwillthen,inturn,increaseethanolsales,” says Marcy Kohl, GLE’s Manager of

CorporateAdministration.“We’repleasedtoreportthatallofthemoneysetasideintotheprogramforthisyearhasbeenallocated.” SouthDakota’sblenderpumpprogramisafive-year,$3.5milliongrantprogram.Itwasinitiatedbythestate’sethanolproducers,whovolunteeredtoredirectaportionofthestate’sEthanolProducerPaymentsProgramtofundtheinitiative.AnotherroundoffundingwillbeavailablebeginningJuly2.TofindoutwhereE85orblenderpumpsarelocatedacrossthecountry—especiallyasyouplansummertravel—gotowww.glaciallakesenergy.comandclickonthe“What’sHappening”pageandthenclickonthe“BlenderPumpLocations”icon.

Watch for Watertown Road Construction AmajorroadconstructionprojectneartheGLEWatertownplantthissummerandfallmaytemporarilychangehowtrafficisroutedintoandoutoftheplantsiteduringthe summer months. Called the “South Connector Project”, it will be an alternateroutearoundthesouthwestandsouthsideofWatertown,fromtheintersectionofSDHighway20(SD20)andUSHighway212(US212)totheintersectionofUSHighway81(US81)and20thAvenueSouth.TheroadwillruntothesouthoftheWatertownplantveryclosetowhere20thAvenueisnowlocated. BertMagstadt,DirectorofEnergyCommodities,saystheconstructionmaymakegettingintoandoutoftheplantabitmorechallenging,butatnotimewillaccesstothefacilitybeshutoff.AlthoughtheprojectgotunderwayinApril,constructionhavingthegreatestimpactonGLEcustomersisexpectedtobegininmid-MayattheintersectionofSD20andUS212,reducingtraffictoonelane,andinearlyJulywhenconstructionwillbedirectlyinfrontoftheplanton20thAvenueeasttowardUS81.Theprojectisplannedtobecompletedbymid-October. “Weaskourcustomerstodrivesafelythroughtheconstructionzonesandtobepatientwiththeconstructioncrews,”saysMagstadt,whoaddsthatoncecompleted,customerswillexperienceafour-laneroadthatprovideseasieraccesstotheplant.

Mina Hosts Emergency Drill Emergencyplannersandcrewsfromawideareagotafirst-handlookathowtheywould handle an ammonia spill during a regional hazardous materials exercise at theMinafacilityinlateMarch. Local fire, police, and sheriff departments, as well as other emergency personnelfrom Brown, Edmunds, and Faulk counties, were part of the approximately 60 peopleparticipatinginthedrill,whichincludedapracticeevacuationofportionsoftheLakeMinaarea.Emergencycrewssetuptheirhazardousmaterialsequipment,includingcommandtrailers,forthefull-scaleexercise.GLEEnvironmentalHealthandSafetyManagerPeteBullene says the GLE staffutilizedtheeventasatrainingopportunityaswell,practicingfacility evacuation plans anddrills. “Wevolunteereveryyearto help sponsor this event,”explains Bullene. “It’s a goodway for us to be involved inthe community and to showour commitment to being agoodandsafeneighbor.”

Facilities Granted Air Permits GLE’s Watertown and Mina facilities have recently been issued air permits thatwill allow each plant to reach production capacities of up to 130 million gallons ofethanolannually.Thepermitsareissuedbythestateaftera30-daypublicnoticeanda45-dayEPAreview.“We’reproudthatGLEhashadnoviolationateitherplant,”saysEnvironmental Health and Safety Manager Pete Bullene. “The new air permits willallowustostaywithinspecsaswecontinuetoincreaseproductionlevels.”

Reduced Corn Starch LevelsReducedstarchlevelsinnewcropandpiledcornischallengingGLE’sproductionteamtorunevenmoreefficientlyinordertomaintainethanolyields.Averagestarchlevelsonadry-weightbasisinthesoutheasternregionoftheCornBeltis72%to74%.GLEhasbeenreceivingcornwithstarchcontentlevelsinthe68%to70%rate.“Thesearesignificantlylowerrates,”saysOperationsManagerFrankMoore.“Sincestarchisthecomponentofcornconvertedtoethanol,itmeanswehavetorunmuchmoreefficiently.Tomaintaincompetitiveyieldsofgallonsofethanolperbushelofcorn,thereisnoroomtoleaveanythingonthetable.”Mooresaysresearchtiesstarchcontenttocornyields,which,inSouthDakota,generallyrunsbelowtherestoftheCornBelt’sdry-landcorn.However,hesaysthestarchcontentinthisyear’snewcropcornislowerthannormal.Heattributesthattoloweryieldscausedbycornthatwasplantedlateduetowetspringconditions.“Justlikeourproducers,”saysMoore,“weliketoseethose200-bushel-per-acreyields.”

Waiting for Improved MarketsGLE,alongwiththeentireethanolindustry,hasbeenexperiencingdifficultmarketssinceJanuary2012.“JustwhentheethanolmarketwasbeginningtoshowsomeslightimprovementtowardstheendofMarch, theUSDAPlantingIntentionsandQuarterlyGrainStockReportcameoutandthatslightimprovementevaporated,”saysDirectorofEnergyCommoditiesBertMagstadt.“Wehaveanoversupplyofethanolanddemandhasbeenveryflat,sowhencorngetshigh,iteatsintoourpositivemargins.” Asluggishgasolinedemandhasnothelped,althoughthatseemstobeimproving.“GasdemandinAprilis1%to2%lowerthanayearago,comparedto7%to8%lowerinMarch,”heexplains.“Thatpoordemand,inconjunctionwiththeexpirationofVEETC(VolumetricEthanolExciseTaxCredit),wasadoublewhammy.”MagstadtexpectstoseegaspricesleveloffandgasolinedemandimproveafterMemorialDay.Alethargicexportmarkethasnothelped.AEuropeantariffonethanolblendsandareductioninexportstoBrazilhasreduceddemand.“It’sbeenatoughfewmonths,”hesays.“Rightnowbothdomesticandexportmarketsareundera lotofpressure.”However,thereislightattheendofthetunnel.“It’sstartingtoleveloff,butitwilltakesometimetoworkthatglutofethanolthat’sinthepipelinetoamorenormalsituation.”

Mina Production Staff: L to R:Tyler Eberle, Keith Kruckenburg, Matt Hass, Justin Patek

Mina Production Staff: L to R:Dustin Treftz and Brent Faehn

(Terry Fleming, Kelly Hahler not pictured)

Mina Production Staff: L to R:Jean-Marie Thomas, Shannon Aman,

Kelin Hofland (Houston Rietz not pictured)

Watertown Production Staff: L to R:(back row) Mike Visser, Alex Nortje, Brent Bass, Steve Chilson, Ryan Warkenthien, Adam Schweitzer, Jason DeBoer, Ryan Jensen,

Jon Zirbel, Kevin Bakke (front row) Mike Schell, Paul Calkins, Matt Pester, Jesse Hakenson, Dana Sandness, Kelby Goodall(not pictured) Christo Engelbrecht, Mark DeRouchey, Frank Moore

Mina Production Staff: L to R:Irina Larson, Mitchell Vilhauer, Bill Rohrbach

(Erin Harrell not pictured)

Check Out the Corn Receiving Line Webcam! Want to see how short the corn dump lines are at GLE? Both the Watertown and Mina facilities now have installed web cameras so

you can check out the length of the lines before you make the trip in to the plant. Just go to GLE’s website, www.glaciallakesenergy.com,

locate the “Webcam” icon on the home page, and then click on Watertown or Mina. You’ll get a bird’s eye view of the corn receiving areas. You can download the webcam on your smart phone, as well. Department Spotlight: Production

Editor’s note: GLE associates work together as a team serving shareholder/customers. Each department plays a crucial role in GLE’s goal of producing value-added quality products at a profit. In this issue, we focus on Production.

When you’re tucked in bed at night, give a thought to GLE’s production teammembers. While you’re restfully sleeping, some of the 16 operators at each ofthe Watertown and Mina facilities are awake producing the products that keepGLEinbusiness.It’sajobtheydo24/7/365—keepingtheplantsoperatingdayandnight, holidays and weekends. “They’re basically responsible for everything fromprocessingthecorntomakingtheethanolandeverythingin-between,”saysBrentBass,Watertown’sProductionManager.“Itcan’thappenwithoutthesupportofeveryoneelse,butthesearethepeoplehere every day round-the-clock making the products we sell,” says Paul Calkins,Watertown’s Interim Plant Manager and Project Coordinator. Those productsincludeethanol,driedandmodifieddistillers,andcornsyrupandcornoil,currentlyintheWatertownplant(Minaissettobeginextractingcornoilthisfall). Theproductiondepartmentworksinteamsoffour,rotatingtaskswithintheir12hourshift.Theteamisresponsibleforstockingandaddingethanolinputslikeyeast,enzymes,urea,andanhydrousammoniaintotheprocess.Theytaketurnsatthedatacontrolsystems,monitoringeveryaspectoftheproductionfacility—frompumpsandvalvestotemperaturesandflowsandqualityspecifications—makingadjustmentswhere necessary. They’re responsible for collecting samples during the ethanol-productionprocessandmakingadditionstothefermentationmixtomaximizeyeastperformance,aswellasworkinginpartnershipwiththelaboratoryonqualitycontrol.Theteamalsohandlesgeneralhousekeepingandsmallmaintenanceprojects.Findingefficiencies,maintaininghighqualitystandards,andkeepingalargeandcomplexplantoperatingsmoothlycomeswithsomestress.“Thesepeoplehavetobeabletothinkontheirfeetandmakedecisions,sometimesinasplitsecond”saysBass.“They’rehereatnightbythemselvesandtheyhavetomakedecisionstoadjustandoperatetheplantdependingonwhatcomesup.Agreatdealofresponsibilityfallsontheirshoulders.”“I’mveryproudtobepartoftheteamthatoperatesthisproductionfacility,”saysKellyHahler,Mina’sProductionManager.“Ourstaffdoesagreat joband they’vebeenabletooptimizetheplantinsubtlewaysthataregivingusjumpsinproduction.”TerryFleming,MinaPlantManager,couldn’tagreemore.“Weareproudof thesepeople—andalloftheotherdepartmentsthatsupportwhatwedo.“

GLE Realizes a Less Significant 2nd Quarter GlacialLakesCornProcessors(GLCP)experiencedaweaksecondquarterendingFebruary29,2012duemainlytocompressedcrushmargins.Workingcapitaldeclined,ending the period at $44.9 million. Reasons for the decline in working capital includequarter-to-date losses, a December 2011 debt payment, as well as a $0.03 per share($5.5million)distributiontomembers.Inaddition,thecompanyoptedtopayforacornoilseparationprojectfortheMinaplantfromitsoperations.Thatprojectwillbeginlaterthisyearandwilladdarevenuestreamthroughthesaleofcornoil.

GLCPpostedanetlossof$6.7millionforthequarterendingFebruary2012,withacashdeclineofamodest$877,000.“Weexperiencedcompressedmarginsduringthequarter,”saysToddRichter, InterimCFOandController,“withethanol-to-corn futuresdeterioratingduetoamarketoversupplyfromthepreviousquarter.Asaresult,wesawsignificantlylowerethanolnetbacksforthequarter.”RichtersaysGLEisbeginningtoseesomeimprovementinthemargins,andyear-to-dateresultsstillreflectanetincomeof$10.5million.HeaddsthatGLCPanticipatedtheweakerquarterandthatmostethanolplantsareexperiencingthesamedownturninthemarkets. Corn prices for the quarter decreased from $6.38 in Q1 to $6.20 in Q2. As theWatertownfacilityconvertedfromexportproductbacktodomesticproductduringthequarter, overall production costs in dollar-terms increased, although if measured ona per-gallon basis, results were very good, says Richter. Production costs during thequarterforbothfacilitieswereapproximately25.5¢-per-gallon,reflectinglowernaturalgasprices. During the second quarter, GLE ground 21.3 million bushels and sold 56.6 milliongallonsofethanol.

Financial Report for Three Months EndingFebruary 29th, 2012

In Millions

Total Assets $270.1 Current Assets $94.6

Total Liabilities $131.7 Current Liabilities $49.7

Net Worth $138.4 Working Capital $44.9*excluding restricted cash

Corn/Ethanol/Fuel Spread Chart

TheaccompanyingchartillustratesthecrushmarginforethanolproductionatGLEinrelationtothespreadbetweenthepriceofunleadedgasandethanolasofMay29th,2012.Tobeprofitable,thegreenline(CBOTCorn)needstofallbelowthelightblueline(CBOTEthanol).Thedarkbluelineindicatesthepriceofunleadedgas.Thespreadbetweenunleadedgas(darkblue)andethanol(lightblue)isthemargintheblenderreceivesforeachgallonofethanolblended.

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Shutdowns Reduce Plant Bottlenecks ProductionratescontinuetomovehigheratboththeWatertownandMinafacilities.Inmid-April,Watertown,whichismakingdenaturedproductforthedomesticmarketwasproducingatratesof115-116milliongallonsperyear.RatesatMina,whichiscurrentlymakinganun-denaturedproductforexport,wereinthe109-110-million-gallons-per-yearrange. Both plants are in the process of removing bottlenecks and are expected to moveproduction rates even higher, says GLE Director of Operations Frank Moore. In Mina,employeesincreasedthecapacityofmolecularsieves,which,saysMoore,willallowtheplanttoproducesignificantlyhigherquantitiesofethanol. GLE Watertown will be removing restrictions that will increase throughput in thedistillation systems and create better balance. “One half of our Watertown plant is10-years-old,andwe’rebeginningtoseeequipmentthatneedstobechangedout,”saysMoore.“Oneofthebigprojectsduringthisshutdownwillbetoreplaceaheatrecoverysystem,calledtheeconomizer,whichwillcostapproximately$350,000.” “Both plants are performing extremely well,” explains Moore, adding that the GLEproduction teams at both plants are to be commended. “You can continue to increaserates as long as technology continues to improve, but getting those incrementalincreasesinproductionisachallenge.“Ourteamsaredoinganexcellentjobingettingthataccomplished,”hesays.“Bothplantshavenowbeenre-permittedfora130-million-gallons-per-yearrateandwe’llcontinuetostrivetowardsthatgoal.”

Now Racing on Ethanol

Starting in the 2011 season, all NASCAR races have been run on Sunoco Green E15 fuel, a 15% ethanol blend. All cars … all races … for more than 1.5 million miles of track and in front of tens of millions of fans worldwide.

The NASCAR American Ethanol partnership was created to help build marketplace and consumer support for American-made ethanol, thanks in great part to our nation’s state corn checko� programs.

The NASCAR American EthanolTM logo and word mark are used under license by the National Association for Stock Car Auto Racing, Inc. and Growth Energy

Quote of the day “NASCARhasaccumulatednearly2millionmilesofdriving—inpractice,qualifyingandracinglaps–onE15,withoutahitch,inwhatcanonlybedescribedasaseamlesstransition. Plus,we’vealsoseenenhancedperformance. Infact,manyoftheteamshavereportedanincreaseinhorsepower.Inmymind,thisprovesthatE15isaviablealternativetoregulargasoline.”

-Race Car Owner Richard Childress on NASCAR.com

Refinance of Term Debt Completed Todd Richter, Controller and Interim CFO, reports that GLCP has completed its longawaitedrefinanceofthecompany’s$90milliontermdebt.Therefinancewillextendtheterm thereby reducing payments and, at the same time, lower interest rates. Richtersaysthecompanyalsohastheabilitytoreduceinterestexpensebyutilizingalong-termrevolving lineofcredit,allowingGLCPtopaydownaportionof thedebtwhenthere isexcesscashandthenre-advanceonthatsamelineofcreditshouldtherebeaneedtodosolater.Thecompanyalsosecureda$30millionoperatinglineofcreditasapartoftherestructure. CEO Jim Seurer says the new arrangement is a good one that should allow foradditionalflexibilitywhenmanagingcashandworkingcapital. “Asanindicationofourimproved financial strength, we actually had two very large entities competing for ourbusinesswhichisagreatplacetobeandquiteanaccomplishmentgivenwherewewerethreeyearsago,”addsSeurer.

MacKenzieKilber,LATIEnvironmentalTechStudentandGLELabIntern,demonstrateshowtoperformawatertesttoBrentBass.