Put all ethanol/biofuel stocks on the radar. Today the Obama administration announced the creation of the Biofuels Interagency Working Group and announced $786.5 million in Recovery Act funds for renewable fuel projects.
“We must invest in a clean energy economy that will lead to new jobs, new businesses and reduce our dependence on foreign oil,” said President Obama. “The steps I am announcing today help bring us closer to that goal. If we are to be a leader in the 21st century global economy, then we must lead the world in clean energy technology. Through American ingenuity and determination, we can and will succeed.”
“Developing the next generation of biofuels is key to our effort to end our dependence on foreign oil and address the climate crisis — while creating millions of new jobs that can’t be outsourced,” Secretary of Energy Steven Chu said. “With American investment and ingenuity — and resources grown right here at home — we can lead the way toward a new green energy economy.”
The Interagency will be co-chaired by the Secretaries of Agriculture and Energy and the EPA and will work with the National Science and Technology Council’s Biomass Research and Development board with the following goals in mind:
In his directive, the President called on Secretary of Agriculture Tom Vilsack to:
Many of the biofuel/ethanol stocks that have been left for dead over the past couple years exploded higher on the news today. These are all penny stocks and highly speculative so caution is urged but this kind of government support may lead to extraordinary gains in these names in the coming months.
Global Energy Holdings (GNH) up 100%
Biofuel Energy (BIOF) up 51%
Pacific Ethanol (PEIX) up 40%
Verenium (VRNM) up 40%
Green Plains Renewable Energy (GPRE) up 8%
It should be noted that the government plans to restrict green house emissions, limiting some corn ethanol production processes. It’s clear that their intention is to promote the use of next generation biofuels such as cellulosic ethanol. To qualify as an advanced biofuel, each type must have greenhouse gas emissions that are at least 50% lower than the emissions associated with ordinary gasoline while the plants that produce them must have emissions lower than 20%.
Verenium Corp (VRNM), a pioneer of next generation cellulosic ethanol commented on the move today:
“This move by the Administration represents an important next step in realizing the significant potential of next-generation biofuels here in the United States,” said Carlos A. Riva, President and Chief Executive Officer at Verenium. “We are on the cusp of realizing the potential of cellulosic ethanol technology, and initiatives such as those outlined in the President’s plan today are critical to enabling companies like Verenium to achieve commercial success.”
Disclosure: Author has no position in the companies mentioned above at this time.