Tristan R. Brown
Alternative energy, long/short equity, commodities, energy

Pacific Ethanol's Low Price Is An Aberration

In early January, with corn ethanol Renewable Identification Numbers [RIN] trading at $0.13 apiece after spending the previous year at $0.02, I argued that the move would translate into lower risks for investors in dedicated ethanol producers. It turns out that I spoke too soon. By the end of February, the RINs had moved to nearly $1.00, and they are currently hovering around $1.02 after a brief foray up to $1.45. This has been excellent news for corn ethanol producers. One legacy of the Volumetric Ethanol Excise Tax Credit [VEETC] was corn ethanol overproduction relative to the annual volumetric mandates established by the revised Renewable Fuel Standard [RFS2]. This overproduction in turn kept RIN values near zero even as...

Join Seeking Alpha PRO to read this archived article and 11,574 other archived articles
FREESA PRO MEMBERS
IDEA GENERATORXExclusive access to 10 PRO ideas every day
INVESTING IDEAS LIBRARYXExclusive access to PRO library of more than 15,000 ideas
SECTOR EXPERT NETWORKXExclusive access to all sector experts for direct consultation
PERFORMANCE TRACKINGXTrack performance of all PRO stock ideas
PROFESSIONAL TOOLSXProfessional Idea Filters to zero-in based on industry, market cap and more
"In just the first month of using PRO, I used it to generate two ideas which were actionable for me. As a result of these two positions, I have earned more than 20 times the annual subscription costs for PRO."Michael Yagemann, Greenbridge Capital
"I am pleasantly surprised with the scope of small and mid-cap coverage PRO offers. You can't find that any where else."Patrick Rice, Mainstay Capital Management
You may cancel at any time for any reason, and receive a prompt refund for membership on months paid and not used (max. 6 months). Details