Ethanol Producers Stock Rise on Word of Higher Blends

September 24, 2018 04:14 PM
 
Pres. Trump is slated to unveil a new policy, supportive of higher ethanol blends, in the coming weeks. Farmers, biofuel makers and Iowa politicians have clamored for the move that’s could expand the ethanol market.

(Bloomberg) --

Pacific Ethanol Inc. led biofuel companies higher with the Trump administration said to be preparing a policy change allowing year-round sales of gasoline with more ethanol, a move that would bolster demand.

Shares in Sacramento, California-based Pacific surged as much as 17 percent on NASDAQ, before ending the day 11 percent higher at $2.00/share. Green Plains Inc., another U.S. producer, gained as much as 4.6 percent, ending the day up 2.0 percent at $17.75/share. Bloomberg reported on the planned policy change on Friday, citing people briefed on the matter.

President Donald Trump is slated to unveil the new policy in the coming weeks, possibly in Iowa, where farmers, biofuel makers and politicians have clamored for the move that’s likely to expand the market for corn-based ethanol.

Although the timing of the announcement is in flux, administration officials have confirmed it’s coming, said the people, who asked not to be named since the policy hasn’t been made public. It could help Midwest Republicans in tough election contests and appease corn farmers battered by agricultural tariffs.

“This is good,” Craig Irwin, an analyst at Roth Capital, said by telephone Monday. “It shows that Trump is for ethanol. Ethanol is a part of agriculture and agriculture is a huge supporter of Trump. This shows that Trump” is taking care of his base.

At issue are summertime restrictions on E15 gasoline, which contains 15 percent ethanol. Current rules block its sale from June 1 to Sept. 15 in areas where smog is a problem. Most gasoline that is sold nationwide -- the common 10 percent ethanol blend known as E10 -- is waived from federal vapor-pressure requirements, allowing it to be sold year-round. The same exemption has not been granted to E15 thus far.

Ethanol advocates say the hassle and cost of changing gas pumps and labels seasonally has dissuaded some filling stations from offering the fuel. They argue that lifting summertime restrictions on the sale of E15 will spur more offerings, expanding the U.S. market for the biofuel. Ethanol currently comprises about 10 percent of America’s 143 billion gallon gasoline market.The policy shift will likely come at the expense of most oil refiners who have for years battled against year-round E15 sales.

 

Copyright 2018, Bloomberg

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Comments

 
Spell Check

Kevin
Montfort, WI
9/25/2018 08:23 AM
 

  What a load of crap! Trump promised a vapor waiver in June for the summer driving season. Hello!! The summer is over! The Teflon Don allowed the illegal Rin waivers the entire year which cost 2 billion gallons of lost demand. But he loves us because we are great Patriots?! Are u kidding me?! Only a hardcore neo con would buy this garbage. This is all part of his plan to buy votes for the mid terms.

 
 

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