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EXHIBIT 10.3


[COMERICA LOGO]


October 4, 2005


Kinergy Marketing LLC
5711 North West Avenue
Fresno, CA 93711

This Letter Agreement is entered into by and between Comerica Bank ("Bank") and
Kinergy Marketing LLC, an Oregon limited liability company ("Borrower") as of
this 4th day of October, 2005, at Bank's headquarters office at 333 West Santa
Clara Street, San Jose, California 95113. This Letter Agreement amends,
restates, and supersedes in its entirety all letter agreements entered into
prior to the date hereof, including without limitation, that Letter Agreement
dated September 24, 2004 by and between Borrower and Bank.

Bank and Borrower agree that any loans which Bank in its sole discretion has
made or may now or hereafter make to Borrower (sometimes hereinafter
collectively referred to as the "Loan") shall be subject to the terms and
conditions of this Letter Agreement unless otherwise agreed to in writing by
Bank and Borrower. In the event there are contradictions between the provisions
of this Letter Agreement and any other written agreement with the Bank, this
Letter Agreement shall prevail. Loan shall be subject to the terms and
conditions of this Letter Agreement, promissory note(s) executed in connection
herewith and/or previously or subsequently executed, and all amendments,
renewals and extensions thereof (singularly or collectively, the "Note"), and
all those certain security agreements and/or such other security or other
documents as Bank has required or may now or hereafter require in connection
with the Loan (collectively, the "Loan Documents").

1. Borrower shall provide to Bank the following reports:

         a.   Annual CPA audited financial statements of Borrower and Pacific
              Ethanol, Inc. within 120 days of year end.
         b.   Quarterly company prepared financial statements of Borrower and
              Pacific Ethanol, Inc. within forty five (45) days of quarter end.
         c.   Accounts Receivable Agings within 45 days of quarter end.
         d.   Accounts Payable Agings within 45 days of quarter end.

2. Borrower agrees to at all times maintain the following financial ratios and
covenants on a consolidated and nonconsolidated quarterly basis:

         a.   Maintain a Quick Ratio of not less than 0.90:1.00.
         b.   Maintain a Debt-to-Tangible Effective Worth Ratio of not more than
              1.75:1.00.
         c.   Minimum Net income of at least $100,000.00.
         d.   Working Capital of not less than $1,000,000.00.

3. Borrower further agrees as follows:

         a.   That Borrower shall not, without the Bank's prior written consent,
              change its name, business structure, corporate identity or
              structure; add any new fictitious names, liquidate, merge or
              consolidate with or into any other business organization.

         b.   That Borrower shall keep all of its principal bank accounts with
              Bank and shall notify the Bank immediately in writing of the
              existence of any other bank account, deposit account, or any other
              account into which money can be deposited.

         c.   Borrower acknowledges and agrees that the credit facility(ies)
              referenced herein may be evidenced by a demand note(s) which is
              payable upon demand. Nothing in this Letter Agreement is intended
              to nor shall be deemed to change the demand nature of any credit
              facility. The purpose of this Letter Agreement is to provide a
              means for Bank to monitor the credit facility and demand may,
              therefore, be made even if the Borrower is in compliance with each
              and every provision of this Letter Agreement or the Note(s).

4. As used in this Letter Agreement the following terms shall have the meanings
set forth below. All initially capitalized terms used but not defined in this
Letter Agreement shall have the meanings assigned to such terms in the Note and
Loan Documents.

"Current Assets" shall mean, in respect of a Person and as of any applicable
date of determination, all current assets of such Person determined in
accordance with GAAP.

"Current Liabilities" shall mean, in respect of a Person and as of any
applicable date of determination, all liabilities of such Person that should be
classified as current in accordance with GAAP.

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"Debt" shall mean, as of any applicable date of determination, all items of
indebtedness, obligation or liability of a Person, whether matured or unmatured,
liquidated or unliquidated, direct or indirect, absolute or contingent, joint or
several, that should be classified as liabilities in accordance with GAAP. In
the case of Borrower, the term "Debt" shall include, without limitation, the
Indebtedness.

"Net Income" shall mean the net income (or loss) of a Person for any applicable
period of determination, determined in accordance with GAAP, but excluding, in
any event:

         (a)  Any gains or losses on the sale or other disposition, not in the
              ordinary course of business, of investments or fixed or capital
              assets, and any taxes on the excluded gains and any tax deductions
              or credits on account on any excluded losses; and,

         (b)  In the case of Borrower, net earnings of any Person in which
              Borrower has an ownership interest, unless such net earnings shall
              have actually been received by Borrower in the form of cash
              distributions.

"Person" or "person" shall mean and includes any individual, corporation,
partnership, joint venture, firm, association, trust, unincorporated
association, joint stock company, government, municipality, political
subdivision or agency or other entity.

"Quick Assets" shall mean, as of any applicable date of determination,
unrestricted cash, certificates of deposit or marketable securities and net
accounts receivable arising from the sale of goods and services, and United
States Government securities and/or claims against the United States Government
of Borrower and its subsidiaries.

"Quick Ratio" shall mean, as of any applicable date of determination, Quick
Assets divided by Current Liabilities.

"Subordinated Debt" shall mean indebtedness of the Borrower to third parties
which has been subordinated to the Indebtedness pursuant to a subordination
agreement in form and content satisfactory to Bank.

"Tangible Effective Net Worth" shall mean, with respect to any Person and as of
any applicable date of determination, Tangible Net Worth plus Subordinated Debt.

"Tangible Net Worth" shall mean, with respect to any Person and as of any
applicable date of determination, the excess of (a) the net book value of all
assets of such Person (excluding affiliate receivables, patents, patent rights,
trademarks, trade names, franchises, copyrights, licenses, goodwill, and all
other intangible assets of such Person) after all appropriate deductions in
accordance with GAAP (including, without limitation, reserves for doubtful
receivables, obsolescence, depreciation and amortization), over (b) all Debt of
such Person at such time.

"Working Capital" shall mean, as of any applicable date of determination,
Current Assets less Current Liabilities.

Please acknowledge your understanding and acceptance of these terms and
conditions by signing below and returning this Letter Agreement to me. A copy
has been provided for your records.

Comerica Bank


By:     /s/ Robert Harlan
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        Robert Harlan

Title:  Vice President Western Division
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Acknowledged and Accepted this____day of_________________________.

Kinergy Marketing LLC


By:   Pacific Ethanol, Inc.
Its:  Member

By:  /s/ William G. Langley
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Its: CFO
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By:
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Its:
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