Pacific Ethanol: Ending subsidies will have no impact on revenue and margins
Ethanol industry supports bi-partisan Ethanol Reform and Deficit Reduction Act to provide production and infrastructure support to the biofuels industry while reducing the national deficit Published on Jun 18, 2011 - 5:41:06 AM
SACRAMENTO, CA, June 17, 2011 – Pacific Ethanol, Inc. (NASDAQ: PEIXD), the leading marketer and producer of low-carbon renewable fuels in the Western United States, issued a statement from its CEO, Neil Koehler, on yesterday’s Senate votes regarding ethanol policy.
Koehler stated, “Yesterday’s Senate votes signal a positive legislative position toward renewable fuels. These actions point to the overwhelming desire – including those in the ethanol industry – to reform the current incentive to focus on infrastructure and market development. Reforming the Volumetric Ethanol Excise Tax Credit (VEETC) would have virtually no impact on Pacific Ethanol’s revenue and margins because, with today’s production economics, ethanol prices are cheaper than gasoline even without the tax credit. Furthermore, replacing it with a variable incentive indexed to oil is both good consumer and energy policy. The Senate also voted down an amendment to bar federal funds from being used for blender pumps and other ethanol infrastructure. This further signals the cooperative effort to reduce the Federal deficit while positioning the renewable fuels industry to successfully implement the existing Renewable Fuels Standard (“RFS”). The RFS requires a minimum of 36 billion gallons in renewable fuel production by 2022; over two and a half times current production.
Pacific Ethanol joins the advanced biofuels and renewable fuels industries, and America’s farmers in support of the bi-partisan Thune-Klobuchar bill, as it represents a strong step forward in establishing a more sustainable model for biofuels production, infrastructure expansion, and support for the commercialization of next-generation biofuels. In addition, the Thune-Klobuchar bill represents smart fiscal policy as it is expected to reduce the national deficit by billions of dollars over the next several years.”
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