GreenShift Acquires Stake in Ethanol Oil Recovery Systems
MOUNT ARLINGTON, New Jersey — GreenShift Corporation today announced the completion of its investment in Ethanol Oil Recovery Systems, LLC ("EORS").
EORS is the inventor of a new patent-pending technology for the cost-effective conversion of corn oil into biodiesel fuels. EORS has agreed to transfer its technology to a new development partnership called SunSource BioEnergy, LLC, that is comprised of and managed by some of the ethanol industry's leading producers, including VeraSun Energy, Glacial Lakes Energy, KAAPA Ethanol, and Golden Grain Energy. EORS owns an 18% stake in the SunSource BioEnergy partnership.
"Our technology is an innovative and unique approach. After considerable research, development and testing, we are pleased to contribute the technology to the SunSource BioEnergy industry partnership," stated David Cantrell, chairman and founder of EORS.
Biodiesel currently comes mainly from soybeans as well as other plants and animal fats. Corn has historically not been used because conventional extraction processes were not capable of producing a high enough grade of oil. The new technology extracts crude corn oil from the evaporation area of dry mill ethanol facilities. SunSource BioEnergy plans to finance the construction of a 50 million gallon biodiesel production facility that will refine the crude corn oil and convert it into biodiesel fuels. By extracting the corn oil, ethanol facilities gain a new revenue stream and reduce costs through the improved operating efficiency of certain of their distilling processes. SunSource BioEnergy additionally plans to offer the technology and oil purchase agreements to other ethanol producers across the industry.
Recently cited by President Bush as "one of our nation's most promising alternative fuel sources," biodiesel is a clean burning alternative fuel that contains no petroleum. It can be blended at any level with petroleum diesel to create a biodiesel blend, it can be used in diesel engines with little or no modifications, and it is simple to use, biodegradable, nontoxic, and essentially free of sulfur and aromatics.
Over 37 billion gallons of petroleum diesel are used for domestic transportation each year in the U.S. The total demand for diesel fuel approaches 50 billion gallons per year when construction, farming and other off-road uses are considered. The current production of biodiesel in the U.S. is about 30 million gallons per year.
Kevin Kreisler, GreenShift's chairman and chief executive officer, said that, "This technology is an excellent example of how we can and should be using our natural resources better, and how an incremental advance in technology can enable quantum environmental gains. In addition to generating additional revenue and decreasing costs, SunSource BioEnergy's production can be expected to benefit the environment by offsetting demand for fossil fuels, and by reducing the generation of greenhouse gases since biodiesel is a cleaner burning fuel as compared to traditional fossil fuels. We are proud to add EORS to our portfolio of environmentally proactive companies."
The new SunSource biodiesel facility is expected to be completed in 2007. Under the terms of its agreement with EORS, GreenShift is acquiring a 15% stake in EORS for about $1.2 million. The investment in EORS is expected to produce an annual return to GreenShift of in excess of $1.5 million once the new facility is operational.