Pacific Ethanol (PEIX) Slips on EPA's Proposed 2014 Renewable Fuel Target
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(Updated - November 15, 2013 3:28 PM EST)
Pacific Ethanol (Nasdaq: PEIX), BioFuel Energy Corp. (Nasdaq: BIOF) and other renewable fuel producers are active today following headlines that the EPA is proposing a renewable fuel quota for 2014 that comes in below legislative targets.
According to Bloomberg the EPA is proposing a range of 15 billion to 15.52 billion gallons for renewable fuels, though the agency would wait until Spring 2014 before issuing a specific quota. The proposal is in-line with an August draft on the issue.
The Obama administration's current target is 18.15 billion gallons.
The EPA proposal would reduce demand for corn-based ethanol while lowering compliance costs for companies like Valero (NYSE: VLO) and Tesoro (NYSE: TSO).
Another proposal being made is for biodiesel and cellulosic products with the EPA looking at a range of 2.0 billion to 2.5 billion gallons, while legislators are at 3.75 billion gallons.
Various industries have called for administrators to scale-back the ethanol mandate, saying that there is a risk of ruining engines as more ethanol is expected to raise demand for corn. Refiners haven't pushed as hard for biodiesel as it doesn't present the same constraints as ethanol.
Shares of Pacific Ethanol are up 11 percent after being up over 23 percent earlier on the session.
Pacific Ethanol (Nasdaq: PEIX), BioFuel Energy Corp. (Nasdaq: BIOF) and other renewable fuel producers are active today following headlines that the EPA is proposing a renewable fuel quota for 2014 that comes in below legislative targets.
According to Bloomberg the EPA is proposing a range of 15 billion to 15.52 billion gallons for renewable fuels, though the agency would wait until Spring 2014 before issuing a specific quota. The proposal is in-line with an August draft on the issue.
The Obama administration's current target is 18.15 billion gallons.
The EPA proposal would reduce demand for corn-based ethanol while lowering compliance costs for companies like Valero (NYSE: VLO) and Tesoro (NYSE: TSO).
Another proposal being made is for biodiesel and cellulosic products with the EPA looking at a range of 2.0 billion to 2.5 billion gallons, while legislators are at 3.75 billion gallons.
Various industries have called for administrators to scale-back the ethanol mandate, saying that there is a risk of ruining engines as more ethanol is expected to raise demand for corn. Refiners haven't pushed as hard for biodiesel as it doesn't present the same constraints as ethanol.
Shares of Pacific Ethanol are up 11 percent after being up over 23 percent earlier on the session.
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