It's been tough making money from biofuels lately. The ethanol industry in particular has seen margins shrink and stock prices fall (see Ethanol Margins Suffer).

But despite the hardships, Monday and Tuesday brought a surge of political and financial support to the sector.

On Monday, Massachusetts Gov. Deval Patrick proposed a bill requiring all home heating oil and diesel fuel to have a mix of 2 percent biofuel by 2010 and 5 percent by 2013.

If passed, the bill would make Massachusetts the first state requiring a biofuel standard for home heating oil.

The bill also seeks to cut the state's 23-cents-per-gallon gasoline tax on fuel made from cellulosic ethanol.

Florida's governor also wants more ethanol for the state.

On Monday, Gov. Charlie Crist said he supports an import tax reduction on Brazilian ethanol, according to the Associated Press.

Brazil is Florida's No. 1 international trade partner.

But Crist doesn't see many U.S. politicos willing to support the lowering of the 54-cents-per-gallon tariff until the presidential election campaign is over, according to the Associated Press.

The move would no doubt spark opposition from U.S. ethanol producers and farmers who grow corn for ethanol production.

The news wasn't all bad for U.S.-based biofuel companies.

On Tuesday, ethanol-technology developer Range Fuels said it signed a $76 million agreement with the U.S. Department of Energy to build what it claims is the country's first commercial-scale cellulosic-ethanol plant.

Companies developing cellulosic ethanol, which is made from nonfood parts of crops like switchgrass, wood chips and corn cobs, still haven't been able to produce it on a mass scale, or at an affordable price.

Range Fuels, which announced it won the funding from the DOE in February, hopes to change that.

The Broomfield, Colo.-based company will use wood and wood waste as its feedstock, and says the plant will have the capacity to produce more than 100 million gallons of ethanol per year. Range Fuels expects to complete the first construction phase, which will have a 20-million-gallon-per-year ethanol capacity, in 2008.

Also, the second-largest U.S. ethanol producer, Archer Daniels Midland (NYSE: ADM), unveiled higher-than-expected third-quarter earnings Tuesday.

The company's net income reached $441 million, or 68 cents per share, in comparison to $403 million, or 61 cents per share, during the same quarter last year.

Analysts were expecting to see 59 cents per share. As a result ADM's stock jumped $2.63, or 7.62 percent, to $37.15.

But it was a bittersweet victory, as it came in spite of a 49-percent increase in operating losses from ADM's bioproducts sector, which includes its ethanol business.

Perhaps the lesson here is that biofuel companies that diversify their holdings will have a better chance of overcoming times of weakness.

Failing to Manage Earnings

On the first day of November, analysts were expecting energy-management companies to pull in healthy quarterly earnings (see Good News Expected for Energy Management). That isn't turning out to be the case.

Last week, Itron (NSDAQ: ITRI), which has been called the bellwether of the industry, missed analyst expectations (see Itron Misses Expectations, Greentech Lessons of the Week).

On Tuesday, the same thing happened to Comverge (NSDQ: COMV).

Comverge saw shares drop 6.6 percent to $34.56 per share Tuesday after it reported a higher first-quarter loss than the year-ago quarter. The company blamed the loss on its purchase of energy-efficiency firm Public Energy Solutions (see Energy-Management Consolidation Continues), among other things.

Comverge, which makes demand-response technologies that help prevent outages, reported a loss of $5.3 million, or 28 cents per share, compared with a loss of $4.5 million, or $1.39 per share, during the same quarter last year.

Analysts were expecting a loss of 22 cents per share.

Comverge also said it's planning a follow-on public offering of 1.37 million shares of common stock and 5.48 million shares to selected stockholders.

Hillary Seeks Green Vote

In another indication that the next U.S. presidential election could be good for the greentech industry, Democratic presidential candidate Sen. Hillary Clinton on Monday evening unveiled a plan that calls for an emission cap-and-trade program.

The plan also would set national energy-efficiency targets for utilities and would increase federal investment into energy research.

The cap-and-trade plan would auction 100 percent of pollutant allowances, with proceeds providing tax benefits for energy-intensive industries and incentives for energy efficiency and renewable technologies, among other things.

Clinton also wants 25 percent of energy the country uses for electricity to come from renewable resources by 2025. In 2005, wind,solarand other nonhydro renewables accounted for only 2.3 percent of U.S. electricity generation. Hydropower added another 6.6 percent.

What entrepreneurs might find especially appealing is Clinton's proposed $50 billion investment fund for alternative energies. Funded by oil companies and the government, the fund would invest in the research, development and commercialization of alternative energy and energy-efficient technologies.

Clinton also wants to double federal investment in basic energy research and increase the country's use of biofuels to 36 billion gallons by 2022 and 60 billion by 2030.

The candidate claims her plan would reduce greenhouse-gas emissions by 80 percent from 1990 levels by 2050 without sacrificing the economy.

Clinton's plan is the latest indication that Democratic candidates see the environment as a key issue in this election.

Sen. John Edwards also has started showcasing some of his proposals, including a $13-billion-per-year fund for new energy, and Sen. Barack Obama's energy policy would launch a venture-capital fund to invest $10 billion annually in clean-energy technologies for five years (see Government VC).