Biofuel Plants Purchased

Green Star Products (GSPI), has recently completed the purchase of two commercial “super ethanol” plants located in the state of Kentucky. The GSPI originally purchased a 60 percent equity position in the two plants in November 2002 Since that time, the company has been negotiating to acquire the balance of 40 percent ownership.

San Diego, California – June 12, 2003 [SolarAccess.com] Super ethanol has a much higher octane rating than regular ethanol, which would allow for a wider acceptance of ethanol by the consumer by reducing the percentage requirement in gasoline blends by 30 percent. The purchase agreement also includes the acquisition of 100 percent of the intellectual property to produce super ethanol. Three patents that describe the process to form a new higher-octane ethanol to increase octane in fuels cover super ethanol. The final super ethanol usage application patent was recently granted patent status (February 2003). GSPI’s two super ethanol plants valued at over US$4 million were built in 1993 and each has a production capacity of 30,000 gallons per day. They were modified in the year 2000 to meet OSHA and API insurance requirements. One facility is still nine percent owned by the Somerset refinery. The ethanol plants use a platinum catalyst and are designed to operate at a pressure of 500 psi and a temperature of 275 degrees Fahrenheit. The plants have been designed with a dual operating function that also allows them to be used to upgrade low octane gasoline to a consumer grade. Both plants will need some additional upgrades before any production can start. GSPI also purchased a 35 percent interest in American Biofuels in July, 2002. American Biofuels announced in February 2003 that it was assembling the largest biodiesel production facility in the U.S. at the Bakersfield, California. The production capacity of this plant is expected to reach 35 million gallons per year at full production. This is significant when considering the entire U.S. production of biodiesel in 2002 was only 15 million gallons. The Bakersfield plant was initially engineered to be a smaller plant, but the proprietary reactor/separator modular design indicated that a larger plant could be built at a much lower incremental cost. As a result of this change in design, some unexpected delays have been experienced in several areas including delivery of the equipment. Presently, initial production is scheduled for late summer of 2003. The Energy Bill and the Farm Bill contain many incentives to expand biofuel production and its use in the U.S. Both bills are receiving bi-partisan support. The cost of petroleum fuels will eventually increase. Meanwhile, the cost of biofuel has been decreasing and production has increased due to technology advances and economies of scale in production and higher demand.

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