The EPA raised today its renewable fuels standard for 2008 to meet a federal mandate that – at least – 5.4 billion gallons of ethanol be blended into our (U.S) gasoline. This years standard was approximately 4.7 billion gallons as the EPA hopes to reach 7.5 billion gallons by 2012. Rick Kment, a DTN biofuels analyst, believes, though, that this move is unlikely to have much effect as gasoline blenders are already using more than the 5.4 billion gallons mandated. The U.S. currently has 134 operating ethanol plants with a combined capacity of 7.2 billion gallons.

December Ethanol on the CBOT increased once again to settle at $1.968 a gallon. CBOT Ethanol has jumped approximately 40 cents since hitting its all-time low back in October. Investors should keep an eye out for ethanol stocks as conditions have become moderatly favorable. Morgan Stanley’s analyst, Dave Wilson, recently issued a short-term buying opportunity with share prices so low.

In other news, Aventine’s CEO, Ronald H. Miller, bought 10,000 shares of his own company’s stock at $8.54.

What to look forward to:

The U.S. House of Representatives could vote on a wide-ranging energy bill next week that would triple the use of ethanol. There is speculation that legislation will require 20.5 billion gallons of ethanol by 2015, with 5.5 billion gallons of that coming from cellulosic ethanol. The bill is also speculated to set short-term targets of 9.5 billion gallons by 2008 and 11.6 billion gallons by 2009. Back in June, the Senate passed a proposal to require 36 billion gallons of ethanol use by 2022. Democrats will also attempt to hit the oil industry with $15 billion in taxes and require utilities to get 15 percent of their electricity from wind, solar and other renewable sources.