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GreenHunter BioFuels Resumes Production at Houston Biodiesel Refinery

^{Published on 2008-11-25 07:43:14 - Market Wire}
 

GRAPEVINE, Texas--([ BUSINESS WIRE ])--GREENHUNTER BIOFUELS, LLC, a wholly-owned subsidiary of GreenHunter Energy, Inc. (AMEX: GRH), announced that startup of biodiesel production at the Company's biodiesel refinery in Houston has been initiated following repairs and recovery from Hurricane Ike. Located along the Shipping Channel in Houston, Texas, the Company's biodiesel refinery, one of the country's largest, sustained a direct hit from Hurricane Ike in mid-September of 2008. Plant debugging had just been completed and the facility was beginning to ramp up production after its original startup in mid-June, prior to the damages caused by the hurricane. Prior to Hurricane Ike, the Company had announced achieving processing rate mileposts of 50% and subsequently 65% of nameplate capacity.

The Company expects to continue its use of 100 percent animal fats (poultry fat and beef talloy) as its primary feedstock, although the GreenHunter BioFuels Refinery is "feedstock neutral" and has used five different varieties of feedstock (vegetable oils and animal fats) to date.

Previously, the Company had stated that it anticipated that most of the damage sustained by its wholly-owned subsidiary, GreenHunter BioFuels, Inc., would be covered by existing property and casualty insurance along with business interruption insurance. For all repairs completed to this point, GreenHunter has utilized its existing working capital to fund the cost of the repairs prior to receipt of any of the significant amounts presently due from the Company's various existing insurance carriers.

Commenting on the repair and restart of the Company's biodiesel refinery, Bruce Baughman, Senior Vice President of Engineering and Technology, stated, "The approximate 12 feet of floodwater from Hurricane Ike took out a significant amount of electrical equipment, electronic instruments and control devices that have now been replaced and repaired over the last eight weeks. In the same period we have repaired process piping, pumps, intermediate tanks and bulk storage tanks that were damaged by flood waters. Prior to Hurricane Ike, GreenHunter BioFuels was systematically ramping-up processing rates. While it is our intent to again engage in a similar ramp-up of continuous throughput rate, it is reasonable to anticipate some troubleshooting during our second startup phase due to the magnitude of the repairs that were necessary to recover from Hurricane Ike. As such, we anticipate that we will achieve an approximate 50% of capacity sometime over the next four operating weeks."

Gary C. Evans, Chairman, President, and CEO of GreenHunter Energy commented, "The renewable fuels industry faces a challenging environment in which crude oil has fallen from $145 per barrel to $55 per barrel today. Even though we have experienced a dramatic decline in the price of our finished product, producing biodiesel from animal fats continues to make economic sense and is a financially viable business. Feedstock prices, which represent approximately 85% of the cost of goods sold in our biodiesel business, have decreased by almost 70% in the same period that crude oil has fallen around 60%. Further, in April of 2009, a federal mandate will enter into effect which requires 500 million gallons of biodiesel to be consumed in the United States during 2009. These minimum federal mandates increase annually through 2012. Additionally, the new Presidential administration continues to pursue significant financial incentives for the alternative energy industry which we believe could directly benefit GreenHunter Energy. We are confident that with our lower-cost, higher-quality production approach, we will be able to produce biodiesel profitably for our shareholders."

Forward-Looking Statements

Any statements in this press release about future expectations and prospects for GreenHunter Energy and its business and other statements containing the words "believes," "anticipates," "plans," "expects," "will," and similar expressions constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by such forward-looking statements as a result of various important factors, including the substantial capital expenditures required to fund its operations, the ability of the Company to implement its business plan, government regulation and competition. GreenHunter Energy undertakes no obligation to update these forward-looking statements in the future.

GreenHunter Energy is focused on the renewable energy sectors of wind, hydro, geothermal, solar, biofuels, and biomass power plants. Our assets consist of leases of real property for future development of wind energy projects located in Montana, New Mexico, California, Texas, Wyoming and The Peoples Republic of China, the nation's largest biodiesel refinery located in Houston, Texas, biomass-fired power plants located in Brawley, California and Telogia, Florida, and an option to lease acreage associated with a terminaling facility in Port Sutton, Florida. Headquartered in Grapevine, Texas, GreenHunter Energy was formed to be the first publicly traded renewable energy company based in the U.S. that provides to investors a portfolio of diversified assets in the alternative energy sector. Additional information about GreenHunter Energy may be found at [ www.greenhunterenergy.com ].