SOURCE: The Bedford Report

The Bedford Report

December 13, 2011 08:16 ET

Ethanol Stocks Volatile as Key Subsidies Are Set to Expire

The Bedford Report Provides Equity Research on Pacific Ethanol & BioFuel Energy Corporation

NEW YORK, NY--(Marketwire - Dec 13, 2011) - U.S. ethanol stocks have been volatile in recent weeks as investors brace for the expiration of the Volumetric Ethanol Excise Tax Credit at year's end. The subsidy is worth 45 cents per gallon of ethanol or 4.5 cents on a gallon of fuel pumped at the local gas station. The Bedford Report examines the outlook for companies in the Ethanol Industry and provides investment research on Pacific Ethanol Corporation (NASDAQ: PEIX) & BioFuel Energy Corporation (NASDAQ: BIOF). Access to the full company reports can be found at:

As Philip Walzer of the Virginian-Pilot reports, "For more than 30 years, the federal government has offered tax credits and imposed a tariff to stimulate U.S. production of ethanol, nearly all from corn."

Tom Buis, CEO of Growth Energy, which represents the ethanol industry, argues that the expiration of the subsidy may help ethanol producers in the current political environment. "It's probably a good thing for our image," said Buis, who spoke to members of the ethanol industry in Old Town. "It served as a rallying point for everyone who wanted to go after us."

The Bedford Report releases regular market updates on the Ethanol Industry so investors can stay ahead of the crowd and make the best investment decisions to maximize their returns. Take a few minutes to register with us free at and get exclusive access to our numerous analyst reports and industry newsletters.

While the industry's main subsidy will expire at year's end, several European competitors continue to argue that U.S. federal and state incentives make the imported product unfairly cheap. The European Commission recently launched an anti-dumping investigation of U.S. ethanol that could result in duties being imposed on the product.

The U.S. ethanol industry has been benefiting from higher costs and production shortfalls in Europe, where output is about 165 million gallons (625 million liters) short of the 2.45 billion gallons that drivers are mandated to use this year, according to Bloomberg New Energy Finance.

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