Tuesday, May 20, 2008

Ethanol: "Khosla's Conspiracy" (AVR; PEIX)

The number two gainers on both the Nasdaq and NYSE are ethanol company stocks; PEIX up 31% and AVR up 2.64%. PEIX closed at $3.20 Friday, it's at $6.62 right now.
From the Wall Street Journal:

Spiking food prices, global shortages and Third World riots have managed to elicit repentance from some ethanol evangelists. Not Vinod Khosla. As the Silicon Valley billionaire explained last week in an interview with the San Francisco Chronicle, ethanol's contribution to the crisis is "very minor" and "overblown."

"Food prices have been going up," Mr. Khosla conceded. "But there are massive PR campaigns trying to ascribe most of the blame to biofuels." Apparently "lots of people" are behind the plot, though Mr. Khosla singled out one: "Clearly, the American Petroleum Institute has been very, very concerned about food prices, and you wonder why."

Gosh. API is a trade group for the oil and gas industry that is radioactive on Capitol Hill. But we didn't realize that API's tentacles were wrapped around the World Bank, the International Monetary Fund and the USDA, all of which blame ethanol for inflationary pressures on food prices. Nor did we appreciate how much authority API's views carried with the U.N.'s special rapporteur for the right to food, Jean Ziegler, who says Western biofuels programs are "a crime against humanity"....MORE

HT: Environmental Capital

From the AP:
Shares of Pacific Ethanol shoot higher on earnings