Market Spotlight: Once-trendy ethanol struggles

And last month analyst David Edwards of Morgan Stanley began covering the sector by downgrading the shares of three of its key companies -Aventine Renewable Energy Holdings Inc., Verasun Energy Corp. and Pacific Ethanol Inc. -partly because of scientific concerns and their possible effect on Washington.

"Scientific studies have raised questions about the carbon cost of biofuels, and proposed legislation could drive a reassessment of corn ethanol," he wrote.