Pacific Ethanol, Inc. Enters Into New Exclusive Ethanol Marketing Agreement

SACRAMENTO, Calif., Pacific Ethanol, Inc. the leading West Coast marketer and producer of low-carbon renewable fuels, announced that its subsidiary, Kinergy Marketing LLC, has signed an exclusive marketing agreement with AE Advanced Fuels Keyes, Inc. ("AE Keyes") to sell all ethanol produced by the 55 million gallon per year ethanol production facility located in Keyes, California. AE Keyes, operating the facility under lease with Cilion Inc, is in the process of retrofitting the facility and has announced that it expects the facility to be operational by the first quarter of 2011.

Neil Koehler, PEI's president and CEO, stated, "We are pleased to have AE Keyes as a marketing partner. Kinergy has consolidated a supply portfolio of marketing agreements with the largest California ethanol facilities that are operating or plan to be operating in 2011 when the implementation of California's Low-Carbon Fuel Standard begins.

This brings significant value to Pacific Ethanol and its California marketing partners with the rapidly increasing demand expected for low-carbon ethanol produced in California. Our comprehensive system of supply, distribution and service handles a majority of the low-carbon ethanol produced in California, delivering premium value to our customers. The strength of our position in the market is further supported by recent voting results in California."

Earlier this month, California voters defeated Proposition 23, which would have suspended California Assembly Bill 32, which requires a reduction in greenhouse gas emission levels in the state. The ethanol produced by each of the California ethanol production facilities within Kinergy's supply portfolio has the lowest carbon intensity rating of commercially available transportation fuel in the United States, according to the California Air Resources Board. Beginning in January 2011, the California Low-Carbon Fuel Standard will require refineries to reduce the carbon intensity of their fuel by 10% over the next nine years.

About Pacific Ethanol, Inc.

Pacific Ethanol, Inc. /quotes/comstock/15*!peix/quotes/nls/peix (PEIX 0.80, -0.03, -3.61%) is the leading West Coast marketer and producer of low-carbon renewable fuels. Pacific Ethanol also sells co-products, including wet distillers grain, or WDG, which is a highly valuable nutritional animal feed. Serving integrated oil companies and gasoline marketers who blend ethanol into gasoline, Pacific Ethanol provides transportation, storage and delivery of ethanol through third-party service providers in the Western United States, primarily in California, Nevada, Arizona, Oregon, Colorado, Idaho and Washington.

New PE Holdco, LLC owns four ethanol production facilities which are managed by Pacific Ethanol and located near their ethanol and by-product customers, offering significant timing, transportation cost and logistical advantages. Pacific Ethanol owns 20% of New PE Holdco. Upon the restart of the Stockton facility, the four production facilities will consist of three operating plants in Oregon, Idaho and California and one idled facility in California. Pacific Ethanol's subsidiary, Kinergy Marketing LLC, markets ethanol from Pacific Ethanol's managed plants and from other third-party production facilities, and another subsidiary, Pacific Ag. Products, LLC, markets WDG. For more information please visit pacificethanol.net.

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995

With the exception of historical information, the matters discussed in this press release including, without limitation: the ability of Pacific Ethanol to continue as the leading West Coast marketer and producer of low-carbon renewable fuels; the ability of Pacific Ethanol to resume production at the California plants, which is at the discretion of the third-party plant owner; the ability of AE Keyes to commence production at the ethanol facility located in Keyes, California by the first quarter of 2011; and the expected demand growth for low-carbon ethanol, which may result in premium market pricing are forward-looking statements and considerations that involve a number of risks and uncertainties.

The actual future results of Pacific Ethanol could differ from those statements. Factors that could cause or contribute to such differences include, but are not limited to the ability of AE Keyes to successfully complete the retrofitting of its ethanol facility by the first quarter of 2011 and those factors set forth in the "Risk Factors" section contained in Pacific Ethanol's Registration Statement on Form S-1 filed with the Securities and Exchange Commission on October 26, 2010.

This news release was distributed by GlobeNewswire, globenewswire.com

SOURCE: Pacific Ethanol, Inc.