SecProbe.io

November 10, 2011

Via E-mail
Neil M. Koehler Chief Executive Officer  Pacific Ethanol, Inc. 400 Capitol Mall, Suite 2060 Sacramento, California

 RE: Pacific Ethanol, Inc.
  Form 10-K for the Fiscal Year Ended Decem ber 31, 2010
  Filed March 31, 2011   File No. 000-21467
Dear Mr. Koehler:

We have reviewed your filing and have the following comments.  In some of our
comments, we may ask you to provide us with  information so we may better understand your
disclosure.
 Please respond to this letter within ten business days by amending your filing, by
providing the requested information, or by advi sing us when you will provide the requested
response.  If you do not believe our comments apply to your fact s and circumstances or do not
believe an amendment is appropriate, pl ease tell us why in your response.
 After reviewing the information you provide in response to these comments, we may
have additional comments.
 Form 10-K for the Fiscal Year Ended December 31, 2010

 Kinergy Operating Line of Credit, page 45

1. You disclose on page 45 that Kinergy, your s ubsidiary, is required  to meet specified
EBITDA and fixed coverage ratio financial c ovenants.  To the extent that future non-
compliance of any debt covenant is reasonabl y likely, please revise  future filings to
disclose and discuss the specifi c terms of any such covenants,  as well as the terms of your
most significant and restrictiv e covenants in MD&A.  Your  disclosures should include
actual ratios/amounts for each period and the mo st restrictive required ratios/amounts.
This will allow readers to understand how mu ch cushion there is between the required
ratios and the actual ratios.  Pl ease show the specific computa tions used to arrive at the
actual ratios with correspondi ng reconciliations to US GAAP amounts, if necessary.
Your disclosure should also address the risks and potential consequences of not
complying with your debt covenants.  See Sec tions I.D and IV.C of the SEC Interpretive

Mr. Koehler
Pacific Ethanol, Inc. November 10, 2011 Page 2

 Release No. 33-8350 and Question 10 of our  FAQ Regarding the Use of Non-GAAP
Financial Measures dated June 13, 2003.
2. Please revise future filings to disclose amounts borrowed and that are available to you to
be drawn down under the $20.0 million line of  credit that Kinergy maintains.
 Consolidation of Variable Interest Entities, page 46

3. Please explain specifically how New PE Holdco meets the definition of a variable interest
entity under the criteria in  paragraph 05-8 of ASC 810- 10-05 and paragraph 15-14 of
ASC 810-10-15.  Provide supporting details as necessary to explain how the legal entity
meets the relevant criteria.
4. Please explain how you have met both of the criteria in paragra ph 25-38A of ASC 810-
10-25.  Explain how the extens ion terms and termination rights of the AMA and other
agreements impact your assessment.  Discuss th e powers of the board of directors of New
PE Holdco and any other parties who make  business decisions a nd direct activities
impacting New PE Holdco’s economic perfor mance.  Clarify who drafts and approves
the budget for costs and expenses associated with services to be performed by you under
the agreements.
5. Clarify specifically why you di d not meet the criteria on the Effective Date, when the
Asset Management Agreement and other key ag reements were entered into, before the
purchase of the 20% ownership interest.
6. Please tell us and clarify in fu ture filings the consideration you delivered in exchange for
the call option for 25% of the membership interests.
 Contingencies, page F–40

7. In future filings please disclose an estimate of  the possible loss or range of loss in excess
of accrual, or a statement that such an es timate cannot be made.   Refer to ASC 450-20-
50, paragraphs 3-5 for guidance.

We urge all persons who are responsible for th e accuracy and adequacy of the disclosure
in the filing to be certain that the filing include s the information the Securities Exchange Act of
1934 and all applicable Exchange Act rules requir e.  Since the company and its management are
in possession of all facts relating to a company’s disclosure, they are responsible for the accuracy
and adequacy of the disclosures they have made.
 In responding to our comments, please provi de a written statement from the company
acknowledging that:
 the company is responsible for the adequacy an d accuracy of the disclo sure in the filing;

Mr. Koehler
Pacific Ethanol, Inc. November 10, 2011 Page 3

  staff comments or changes to disclosure in response to staff comments do not foreclose
the Commission from taking any action with respect to the filing; and

 the company may not assert staff comments as  a defense in any proceeding initiated by
the Commission or any person under the federa l securities laws of  the United States.

 You may contact Tracey McK oy, Staff Accountant, at (202)  551-3772 or, in her absence,
the undersigned Accounting Branch Chief at (2 02) 551-3355 if you have questions regarding
comments on the financial statements and related matters.
Sincerely,
         / s /  T e r e n c e  O ’ B r i e n           T e r e n c e  O ’ B r i e n          A c c o u n t i n g  B r a n c h  C h i e f