GSPI Consortium Plans 500-Million Gallons Biofuels Production
June 28 2006 - 1:35PM
Business Wire
Green Star Products, Inc. (OTC:GSPI) (GreenStarUSA.com) announced
today that it has finalized negotiations with a Consortium of
Companies to produce up to 500-million gallons of Biofuels annually
within five years. GSPI President, Joseph LaStella, stated, "The
GSPI Consortium of companies represent all the various elements
required to create a successful World-class venture both
economically and practically." Additional companies have indicated
they will be coming on board shortly. The GSPI Consortium will
construct complete BioRefinery facilities incorporating both
biodiesel with adjacent ethanol production facilities. The ethanol
facility will utilize waste agricultural products such as corn
stover and switch grass (see GSPI press release May 15, 2006).
These factors present a unique opportunity for the GSPI Consortium
to become one of the major alternative fuels producers in the
United States and the World. Biofuels, such as biodiesel and
cellulosic ethanol, significantly reduces harmful fuel emissions,
including global warming gases, while being cost competitive with
conventional fossil fuels. BIODIESEL Mr. LaStella stated, "On the
biodiesel technology side of the equation, GSPI has already
demonstrated 3 1/2 years of commercial production of biodiesel in
its proprietary, continuous flow process reactor system, which is
also a waterless production process." The GSPI system has many
financial advantages, including a commercial reactor, which
converts feedstock to biodiesel 30 times faster than industry
standards (see GSPI press release May 23, 2006). Other advantages
include construction costs of 60% less than the industry's average
costs with completion of plant construction in 14 weeks versus 14
months for a standard biodiesel plant. BIOMASS ETHANOL The other
side of the technology equation concerns cellulosic-ethanol
production. GSPI for many years has predicted and supported the
fact that long-range future of ethanol production will not be from
corn but from waste agricultural products (wood chips, rice and
wheat straw, corn stover, orange peels, etc.); and cellulosic
portion of the municipal solid waste. On January 31, 2006,
President Bush delivered the State of the Union Address at the U.S.
Capitol in Washington, D.C., stating, "So tonight, I announce the
Advanced Energy Initiative -- a 22-percent increase in clean-energy
research -- at the Department of Energy." The President also added,
"We must also change how we power our automobiles ... We'll also
fund additional research in cutting-edge methods of producing
ethanol, not just from corn, but from wood chips and stalks, or
switch grass. Our goal is to make this new kind of ethanol
practical and competitive within six years." On Larry King Live on
May 17, 2006, David O'Reilly, Chairman and CEO of energy giant
Chevron, said, "It is true, cellulose ethanol is almost like the
Holy Grail. If it works, it changes the game. So I'd say if you can
crack the cellulosic code, that will be an even bigger deal than
'The Da Vinci Code'." GSPI's history in "biomass-to-ethanol
technology" results from a long-term association with its strategic
partner Pure Energy Corporation (PEC) (pure-energy.com), a company
with 15 years experience in ethanol conversion technology. Irshad
Ahmed, President of PEC, is a well-known published industry leader
in the biomass technology field with 25 patents in the United
States and worldwide, with the latest patent issued as recently as
on June 20, 2006. Mr. Ahmed has numerous technical publications and
was the President of the National Biodiesel Foundation for three
years. He has also served as a member on many national energy
committees, such as the American Council on Renewable Energy as
well as an invited member on the energy task force on renewable
energy organized by Senators Hillary Clinton and Charles Schumer of
New York. PEC's conversion technology of biomass to ethanol is a
proven technology based on 15 years of research including the
operation of test facilities located at the Tennessee Valley
Authority (TVA) Laboratory in Muscle Shoals, Alabama. TVA is a US
Federal facility that was originally operated by the US Department
of Energy. Pure Energy also has several other strategic partners
such as Shell Chemicals, BASF Corporation, and others. BASF
Corporation (NYSE:BF) is a world leader in the agriculture/chemical
industry, employs more than 81,000 people, and has posted sales
last year of $54 billion. Working with PEC, BASF will participate
in the planned BioRefinery projects with GSPI in Idaho and
Pennsylvania. All of the GSPI BioRefinery facilities will utilize
the Pure Energy biomass-to-ethanol two-stage dilute acid hydrolysis
technology process, integrated with the GSPI Waterless Continuous
Flow Biodiesel Technology. There are many cost saving benefits
achieved by operating both systems together. The potential supply
of biofuels will be supported by the U.S. farmer. In preparation
for this support, the GSPI Consortium is active in multiple
projects in the following States: North Carolina, Pennsylvania,
Florida, Idaho, Washington and California. GSPI is establishing
access to multiple biofuels feedstock because as demand for these
feedstocks increase available supplies will surely tighten and
prices will accelerate. Mr. LaStella stated, "The farmers, both in
the Unites States and foreign countries, will be the backbone of
this new expanding alternate fuels global industry." INTERNATIONAL
In order to become a major world supplier of biofuels, other
long-term supplies outside the U.S. must be acquired. NRG Resources
(NRG), a long-term Consortium partner, will spearhead feedstock
acquisition and biofuel production outside the United States. NRG's
Executives operate businesses in the United States and also in the
Countries of Ukraine, Kazakhstan and Latvia; which are Countries
that now offer many excellent biofuel industry development
opportunities as follows: -0- *T 1) Ability to set up cultivation
of feedstock for biodiesel production 2) Government support with
existing business connections 3) Market access and ease of
transportation 4) Massive agriculture potential 5) Inexpensive
labor 6) Stable governments 7) US friendly 8) 98% literacy *T NRG
Resources has support from the government of Kazakhstan and the JSC
Russian Railways (Russian railroad) to utilize over 5 million acres
for the agricultural development of oilseed crops for the
production of biodiesel. These surface rights will allow NRG to
utilize local farmers to grow the feedstock to supply the biodiesel
plants throughout Kazakhstan. Present crops being grown now include
cotton, which can be converted into feedstock during plant
development. Using cottonseed oil from existing crops will allow
GSPI to immediately start building a plant in 2006 - 2007, and
other feedstocks can follow later. The Chairman of NRG Resources,
Tony Vanetik, was born in Russia and has operated a number of
companies with relationships that extend to the highest level of
the Governments of Kazakhstan and Russia. The relationships include
strong ties with the JSC Russian Railways (Russian railroad), which
covers 11 time zones and is one of the largest railways in the
world employing 1.26 million people. The Russian railroad will play
an important role in transporting the biodiesel to European Union
(E.U.) markets and the Chinese market -- China borders the eastern
part of Kazakhstan. Senior Executive of JSC Russian Railways, Mr.
Serge Lipatov, is also the President of JSC TransTeleCom (a 100%
subsidiary of JSC Russian Railways); and he is also a member of the
Board of Directors of NRG Resources, Inc. Some experts believe that
Kazakhstan's potential oil reserves could provide significant
production, to even rival Saudi Arabia's, in the not-too-distant
future. Kazakhstan presently has extensive oil distribution
pipelines extending to its seaports and into China. Kazakhstan also
has under construction other fuel pipelines that will connect
existing lines from Kazakhstan to the E.U. These oil lines to
refineries from producing fields are being constructed in
anticipation of the major growth of oil production in Kazakhstan.
With the extensive infrastructure in Kazakhstan, along with the
Russian railroad, GSPI's future biodiesel expansion can service
local needs and supply shipments to the E.U. The E.U. has mandated
that, by 2010 all diesel fuel include a B5.75 (5.75%) blend of
biodiesel. Kazakhstan can then, through the pipeline network, ship
biodiesel to the E.U. by locating GSPI processing plants near oil
refineries. GSPI has successfully built and operated a 10 million
gallon per year test module in the summer and fall of 2005. The
test module was built inside a 45-foot tractor-trailer (with room
to spare). This module operated successfully for six months in
Bakersfield, California and produced biodiesel from several sources
of feedstock including soy oil, corn oil, beef tallow and waste
vegetable oil. GSPI, NRG and the Russian railroad will be
developing the installation of biodiesel production facilities on
railcars, which are much larger than the tractor-trailer utilized
in Bakersfield. The reason for using railcars is to establish a
complete mobile proprietary reactor/separator system to produce
biodiesel from different stockpiles of feedstock along railroad
spurs off the main line tracks. The first module will be built by
GSPI in the U.S. to Russian railroad's specifications and shipped
to Kazakhstan for installation to commence production immediately
on available feedstock. GSPI personnel, to insure protection of the
proprietary technology, will build the balance of modules in
Kazakhstan for installation on railroad cars to meet local
standards of construction (likely at Russian railroad's
facilities). NRG is already reviewing Russian engineer applicants
with overseas experience to be trained in the United States. The
first GSPI Biodiesel Plant in Kazakhstan will be 20 million gallons
per year to start in late 2006. This plant is expandable to 100
million gallons in years 2007 - 2008. Further expansion, as the
market demand grows, will allow the GSPI Consortium to reach 500
million gallons annual production of combined ethanol and biodiesel
fuels by year 2011. Demand for clean fuel at a reasonable cost
could accelerate this time frame even faster. The GSPI Consortium
is well positioned in the Biofuels Industry with its collective,
proven, efficient, low-cost advanced technology base and its
corporate expansion in the United States and Kazakhstan.
Forward-looking statements in the release are made pursuant to the
"safe harbor" provisions of the Private Securities Litigation
Reform Act of 1995. Investors are cautioned that such
forward-looking statements involve risks and uncertainties,
including without limitation, continued acceptance of the company's
products, increased levels of competition for the company, new
products and technological changes, the company's dependence on
third-party suppliers, and other risks detailed from time to time
in the company's periodic filings with the Securities and Exchange
Commission.
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