CHICAGO (Dow Jones)--The U.S. ethanol industry is expected to continue to prosper even as the Democrats take control of the House of Representatives, according to representatives of the U.S. ethanol and corn sectors.
While 13 House races from Tuesday's elections remain undecided, Democratic victories in 227 seats assures the party at least a seven seat majority when the 110th Congress convenes in January.
Republicans have been strong supporters of the growth of the alternative fuel industry, but there is just as much support from the Democratic side, said Matt Hartiwg, spokesman for the Renewable Fuels Association, an ethanol trade group, on Wednesday.
He noted such key congressional members as Nancy Pelosi, D-Calif, and Colin Peterson, D-Minn., as strong proponents of ethanol and renewable fuel production. Pelosi will take over as Speaker of the House, while Peterson will take over as chairman of the House Agriculture Committee.
Renewable energy firms stock prices rose Wednesday following the Democrats' victory in the House. The Andersons Inc. (ANDE) is up $2.15 to $37.25, while Pacific Ethanol Inc. (PEIX) shares are currently trading at $16.91, up 69 cents. VeraSun Energy Corp. (VSE) is up $1.41 at $20.12, Xethanol Corp. (XNL) is up 6 cents at $2.960, and Archer Daniels Midland (ADM) is up $1.90 to $35.43.
There are 106 ethanol plants already in operation, an additional 48 plants are under construction and seven are undergoing expansion, according to the RFA.
Current ethanol output is 5 billion gallons and with announced capacity, it could add another 3.5 billion gallons.
The Renewable Fuels Standard, as part of the Energy Policy Act of 2005, mandates 7.5 billion gallons of renewable fuels be used in the U.S. fuel supply by 2012.
The U.S. Agriculture Department is predicting that the ethanol industry will consume 2.15 billion bushels of this year's corn crop, which is 20% of the total U.S. corn harvest.
Source: Debbie Carlson and Bill Tomson; Dow Jones Newswires; 312-750-4072; debbie.carlson@dowjones.com; bill.tomson@dowjones.com