BioFuels Get Hot With GOP Help

| About: TerraVia Holdings, (TVIAQ)
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Slowing climate change is not a cause that will get a Republican to salute green technology.

But supporting our military is. Helped by an EPA-Army partnership called NetZero, biofuels companies are suddenly hot.

CNBC estimates that total aid to the biofuels industry from EPA, Agriculture and the military now totals $510 million per year.

Much of the focus is on Solazyme (SZYM), which went public this year despite a consistent history of losses (click here for more). Investors are bullish on the Navy's decision to buy 450,000 gallons of jet fuel and marine distillates made through a joint venture with Syntroleum Corp. called Dynamic Fuels, which has a plant in Geismer, Louisiana.

Bulls are betting that the interests of the Defense Production Act (DPA), which spurred the development of strategic metals during the Cold War, will spare NetZero from the budget axe coming down as the result of the Supercommittee failure.

In addition to military sales Solazyme, which uses algae as feedstock at a plant in Peoria, is also signing contracts with civilian airlines. It has plans to build a plant in Brazil, and is also selling its feedstock through chemical and food companies for use in skin oils and nutritional oils.

Speaking of smiling Republicans, outgoing Mississippi Governor Haley Barbour may be the greenest Republican on the planet.

In addition to helping open a Stion solar plant in Hattiesburg, he has been helping KiOR (NASDAQ:KIOR) build what could be five biofuels plants in southwest Mississippi. Ground was recently broken for the first such plant in Columbus.

Edward Schneider recently profiled KiOR here as a $1.7 billion company with no revenue. But Barbour is supporting it because it promises to turn wood pulp into energy and jobs, which are in short supply in Mississippi.

Amyris (NASDAQ:AMRS), meanwhile, has signed a deal with Total (NYSE:TOT) of France, which is majority owner of Sunpower (NASDAQ:SPWR), to bring renewable diesel and jet fuels to the global market, under a joint research effort to which Total is supplying more than half the cash. (Total owns 21% of Amyris.) It's also opening a plant in Brazil to make Biofene, a feedstock for use in packaging and fragrances.

Despite all this good news AMRS is currently trading near its 52-week low with bearish technicals, but the move down may be about to end. Its more bearish outlook might be due to a top political supporter being Democrat Diane Feinstein, who put $1 million into the then-private company's stock shortly before it got a Department of Energy grant.

Next time, Amyris, feed a Republican politician. It's better for business.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.