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Ethanol Companies’ Shares Rise on New EPA Guidelines

January 24, 2011
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According to the Associated Press, shares of several ethanol companies climbed Friday after the Environmental Protection Agency approved higher levels of corn-based ethanol to fuel all cars manufactured in the last decade. The agency declared that 15 percent ethanol blended with gasoline is safe for cars and light-duty trucks built between 2001 and 2006. In October, the EPA approved the same gasoline-ethanol blend for vehicles manufactured since 2007. Previously, the maximum gasoline blend has been 10 percent ethanol. Investors immediately saw the potential for ethanol companies that are left after a harrowing three years that saw numerous bankruptcies and refineries bought for pennies on the dollar. Falling gas prices during the recession and vaporizing investment dollars shuttered many of the companies that arrived in recent years to take advantage of federal subsidies. Those that stuck it out were often established, with a solid financial backing. Pacific Ethanol Inc. led the sector gains with shares rising about 6 cents, or nearly 7 percent, to about 87 cents in afternoon trading. Shares in BioFuel Energy Corp. rose 5 cents, or 4.4 percent, to $1.18, while Rex American Resources'' shares added 47 cents, or 3.1 percent, to $15.50.

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