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Ethanol Stocks Surge After EPA Says Test Shows Cars Can Handle Increased Ethanol Fuel Content, Will Make Determination in Mid-2010

December 1, 2009 10:21 AM EST Send to a Friend
Ethanol stocks are surging today following news from the U.S. Environmental Protection Agency (EPA) today that it expects to make a final determination in mid-2010 regarding whether to increase the allowable ethanol content in fuel.

In a letter sent today to Growth Energy – a bio fuels industry association that had asked EPA to grant a waiver that would allow for the use of up to 15 percent of ethanol in gasoline – the agency said that while not all tests have been completed, the results of two tests indicate that engines in newer cars likely can handle an ethanol blend higher than the current 10-percent limit. The agency will decide whether to raise the blending limit when more testing data is available. EPA also announced that it has begun the process to craft the labeling requirements that will be necessary if the blending limit is raised.

In March 2009, Growth Energy requested a waiver to allow for the use of up to 15 percent ethanol in gasoline, an increase of five percent points. Under the Clean Air Act, EPA was required to respond to the waiver request by December 1, 2009. EPA has been evaluating the group’s request and has received a broad range of public comments as part of the administrative rulemaking process. EPA and the Department of Energy also undertook a number of studies to determine whether cars could handle higher ethanol blends. Testing has been proceeding as quickly as possible given the available testing facilities.

Related Stocks:
Pacific Ethanol, Inc. (Nasdaq: PEIX)
Green Plains Renewable Energy, Inc. (Nasdaq: GPRE)
The Andersons, Inc. (Nasdaq: ANDE)
Metabolix, Inc. (Nasdaq: MBLX)
Archer Daniels Midland Company (NYSE: ADM)



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