Company Name EnerGenetics Energies, LLC (EGE)
Website: energeneticsusa.com POBox 845, Keokuk, IA 52632 Tel. (217) 453-2340; Email: egi@adams. net
Contact Person: Sammy Mayfield Pierce, Founder, Chairman & CEO
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Industry: Renewable Fuels and Energy--Biotechnology
Description of Business: New Economically Sustainable
Mini--BioFuel Refineries (MBRs)
Our Products: Bio-Fuels Such as Bio-Butanol, Ethanol, Bio-Chemicals and Hydrogen From Grains and Biomass in smaller, Mini-Biofuel Refineries and the production of value-added nutraceuticals, proteins, starches, bioplastics and oils as by-products of the bio-fuels production process.
Background. EnerGenetics Energies, LLC (EGE) is one of the oldest biofuels research companies in the U.S. (est. 1978). EGE approaches the production of biofuels in a fundamentally different way than the traditional methods employed in current ethanol/bio-diesel operations. EGE believes that the key to economic sustainability in the biofuels industry is first to remove petroleum from the production of biofuels so that petroleum prices are de-linked from bio-fuel production costs, and second to produce value added products that recover feedstock costs associated with bio-fuel production. After 30 years of research and development, EGE has developed MBR technologies in conjunction with the USDA and leading universities which accomplishes these goals.
Technologies: EnerGenetics Energies LLC (EGE) has developed disruptive technologies that allow for the more economical production of biofuels (and hydrogen) in smaller-scale, modular biorefineries called “Mini-BioFuel Refineries” or “MBRs”. These MBRs are economically sustainable at a fraction of the scale of traditional ethanol and soydiesel operations because they can produce biofuels at a much lower production cost and simultaneously they produce much higher valued products than those produced by traditional ethanol and soydiesel facilities. The economics of traditional ethanol and soydiesel operations are almost solely dependent upon the cost of grain feedstocks and the cost of petroleum used in the production of biofuels, but such economics are tied to the value of only two end products, biofuels and low-grade animal feed. The cost of feedstock (the bushel) usually accounts for 30-60% of the total cost of producing biofuels and the use of petroleum accounts for another 25% of the costs of producing biofuels. Patented MBR technologies employ highly specialized, smaller scale pharmaceutical equipment to micron-grind grain and biomass 5,000 times smaller, dramatically increasing surface area, and this technology avoids the energy intensive steps of cooking, steeping and distillation, dramatically reducing the use of petroleum in the production of biofuels. This allows for a reduction in the scale of biorefineries where traditional ethanol plants usually process 5,000 bushels per hour whereas MBRs will process as low as 50-500 bushels per hour. MBR technologies also include EGE's continuous flow fermentation processes which allow for the production of biofuels in continuous flow smaller scale bioreactors that can replace much larger batch reactors currently employed in ethanol fermentations. Through employment of such MBR technologies the capital costs of producing biofuels can be reduced by as much as 90% and the production costs by over 50%. One of the most exciting aspects of MBR technologies is their ability to produce what Management believes to be “the next generation of biofuels”. These are biochemicals called "esters" and "micro-emulsions" which management believes can be used as basic building blocks to totally replace all petroleum-based fuels, ranging from gasolines to diesel, aviation and even jet fuels. (Esters are combinations of oils, organic acids and alcohols, all which are produced by fermentations of renewable resources in MBRs.)
Since MBRs are smaller and modular in scale, they also can be decentralized near feedstock sources, thus reducing the cost of accessing feedstocks for biofuels production. MBRs can also use many different feedstocks native to local regions, corn, soy, rice, sweet cane sorghum, jatropha, algae, food wastes and biomass. One novel feedstock is a new corn hybrid developed by the USDA and to which the Company has exclusive worldwide rights to, is drought resistant, and filled with novel new nutraceutical components. Management believes the use of these new hybrids will allow for the spread of biofuels production from corn across the country and worldwide similar to the way the Midwest has become the largest corn to ethanol producing region in the world. The Company has also perfected its MBR technologies using food wastes and sweet cane sorghum through novel preservation processes that will allow sweet sorghum to become the new "sugarcane" of U.S. biofuels production much like the "sugarcane to ethanol" operations in Brazil, which have allowed Brazil to become energy independent from petroleum.
The use of corn in biofuels production has caused mounting concerns over the increase in food costs. EGE's patented MBR technologies extract and recover the food values of grains in advance of biofuels production into much higher valued foods and nutraceuticals, thus eliminating the food versus fuel debate by not sacrificing food values of the grain during biofuels production. (Nutraceuticals are natural food products that act like preventative medicines that help combat dietary related diseases such as diabetes, cancer, stroke and coronary.) Some of these higher valued food and nutraceutical products produced by MBRs include such products as corn protein isolates and phytosterols (specialty oils) valued as high as $10,000--$200,000 per ton versus distillers' grains currently valued at $100+ per ton. The Company estimates that MBR technologies can derive from $40-100 in net value per bushel of corn in the production of foods, nutraceuticals, and other value added products before the production of biofuels. Therefore, MBR technologies will serve to significantly reduce the costs of producing biofuels by recovering the cost of the bushel through production of value added products during biofuel production.
Products Produced. The novel technologies developed by EGE allow for the production of many value-added products from the same biorefinery simultaneously. Bio-fuels--including bio-butanol (considered by many as the holy grail of biofuels), ethanol, biodiesel, organic bio-chemicals (the basic building blocks of the petro-chemical industry), esters (the next generation of biofuels) and hydrogen. Because MBRs are small-scale, they can be far more diversified than the much larger scale, petroleum, ethanol or grain milling refineries, and thus produce a whole host of valuable fuel products far more efficiently and at reduced costs. Value Added Products-- when grains are refined, MBR technologies allow for the production of highly valuable nutraceuticals. Nutraceuticals are foods that also contain natural antioxidants that can combat dietary related diseases such as diabetes, obesity, coronary and stroke. When these novel nutraceutical products are produced from specialty grains, tremendous value is added to the production of renewable fuels and energy. For example, high protein and phytosterols can lower blood pressure, blood sugar levels, triglycerides in humans, thus can lead to new health-food cereals, pastas, breads, cookies, milks, and meats. High value starches, oils, biodegradable plastics, electrical power, aquaculture and hydroponics are other high value by-products of the MBR process.
Problems Solved By MBR Technologies. Currently, grain-based alcohol and soydiesel refineries require large-scale operations to achieve economies of scale. Ethanol plants must be designed to produce 50-100 million gallons of biofuels per year and cost $100 million or more in order to be economically sustainable. MBRs, however, will overcome these economic barriers and allow for the “miniaturization” of the production of biofuels. In addition, current ethanol and soydiesel operations require tremendous amounts of energy (all made from petroleum) in the form of natural gas, gasoline, diesel fuel, and fertilizer which are used during the production and refining process. Therefore, as the price of petroleum goes up so does the cost to produce ethanol and soydiesel. MBRs employ no cooking, steeping, or distillation, and because hydrogen is a by-product, petroleum usage is substantially reduced or eliminated. MBRs production costs therefore are not coupled with petroleum prices. In addition, ethanol and soydiesel operations usually produce only two products, ethanol or soydiesel and animal feed, and their profits are highly tied to the cost of the feedstock, corn or soybean, as well as petroleum. MBRs, however, are capable of producing dozens of value-added products and by-products worth hundreds of times the value of animal feed, ethanol or biodiesel, and thus these value added products help off-set the feedstock costs of biofuels production. In addition, because MBR’s are smaller-scale and modular, they cost approximately $25 million or less, thus lowering capital costs and reducing risks for implementing MBRs, and due to the "mini-sizes" of MBRs, MBRs can be located much closer to grain and biomass supplies, thus reducing hauling costs, a major cost in current ethanol and soydiesel operations. Another problem solved by MBRs is that the production of alternative fuels and energy has struggled to be competitive with petroleum-based fuels and rely heavily upon enormous tax incentives. MBRs are not dependent upon such tax incentives and show as much as 100% net annual returns on investment. Water usage is also of major concern in biofuels production and has become an economic and political issue for traditional ethanol and soydiesel plants because they require vast quantities of water in the production process. MBRs employ a patented process to recycle water and thus use far less water than traditional ethanol plants.
Competitors: Today, grain processing is dominated by giant corn and soy refiners and alcohol fuels are centralized in grain producing states. British Petroleum, DuPont and Chevron have announced $500 million investments into bio-butanol, while other companies are investing in huge cellulosic ethanol refineries costing $100's of millions that are reliant upon major government subsidies. Many states have announced that they are working to develop the “hydrogen highways” of tomorrow, but no real technology to date can provide for the decentralization and supply of hydrogen. Hydrogen is a "waste" by-product of MBRs.
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Markets: Targeted Customers Include: Initial fuel target: Farm coops and diesel fleet operators under federal mandates to convert their fleets to alternative fuel uses can use biofuel from MBR to qualify. Market Sizes: Diesel Fuel: 32 billion gallons annually. Biodiesel production in the U.S. approximates 100 million gallons this year and is expected to double next year. Projected Market Share and Timing: MBRs can achieve a .03% of the diesel fuel market and 10% of the biodiesel markets within 3-5 years. In the food and nutraceutical sectors, nearly 200 major food companies have expressed interest in MBR nutraceutical products in an $18 billion per year projected market (enough to sustain 3,000 MBRs).
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Proprietary Technology and Intellectual Property: Patents/Trademarks: The Company has 20 patents and patent pending technologies, including those owned by the USDA and major universities. Key MBR technologies include: advanced precision--micron-milling of grains and biomass to thousands of times smaller than currently practiced, recovery of valuable food and nutraceuticals, the use of novel feedstocks, such as new corn hybrids containing ancient maize genomes, modular, small-scale continuous fermentation technologies, and nano-technology membrane recovery technologies.
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Business Model: How We Plan To Reach Our Customers--Distribution Channels--Key Sources of Revenues. Our joint venture partners and customers are also the end-users of our technologies and products, from farm coops to diesel fleet operators and food manufacturers. Key Sources of Revenues: To commercialize MBR technologies, the Company plans to enter into strategic partnerships to manufacture MBR products for local consumption, from MBR foods and nutraceuticals to MBR biofuels and bioenergy products. In the food sector: companies interested include Sara Lee, Nestles, Wonderbread/Hostess, General Mills, Pillsbury, Weider, Guiness; P&G, Mitsubishi, Pepsi, Frito Lay for use of MBR nutraceuticals in many food product lines through joint ventures. Gross Margins: In foods, 66-100%; in alternative fuels: 50% and bio-chemicals: ~ 98% gross margins.
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Date Established and Deal Stage: Incorporated in Louisiana/Delaware 1980. Deal Stage: 2nd round
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Prior Financing: The Company has raised approximately $10 million in cash and another $10 million in grants and services, including research services, engineering, legal and equipment and building investments. In addition, the USDA and leading universities have invested over $10 million in such technology investments.
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Key Principals: Employees: 6 F/T & 2 P/T. Biographies: The Company's Founder, Sammy Mayfield Pierce, has worked in R&D in the food and renewable fuels industries for nearly thirty years and is considered by the U.S.D.A. as one of the original pioneers of alcohol fuels in the U.S. He was the original inventor of biodiesel fuel produced from butanol and coined the term "biodiesel" and holds the original federal trademark for the term "biodiesel". Mr. Pierce has acted to develop many of the key technologies that differentiate MBR technologies from the competition. Some of the Company’s advisors have over 30 years in the food and grain processing industries serving such companies as Gallo, Simplot, Dole, Stanislaus, Nutrasweet, Kelloggs, General Mills, Quaker Oats, Sara Lee and others. They will be primarily responsible for the design and operation of the Company's integrated approach to food, energy and chemical MBR production facilities Other participants includes top scientists of the USDA and major universities and several major global engineering firms with which the Company has established long-term relationships.
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Social and/or Environmental Impact: MBRs will lead to the downscaling and decentralization of the renewable fuels industry similar to the way “mini-steel mills” now dominate the once giant steel industry. This "down sizing" will lead to the proliferation of renewable fuels and energy production throughout the U.S. causing a new wave of economic activity never before seen in the production of biofuels, where MBRs will be employed in every town and city in America to produce biofuels. EGE management believes that thousands of MBR’s will dot the countryside producing the highest quality biofuels, health foods, nutraceuticals, bioplastics, aquaculture, hydroponics, hydrogen and electrical power. MBRs also overcome the problem of a lack of new refinery capacity in our country by distributing small refineries that will sell fuel directly into the local market. MBRs will eliminate the need to transport biofuels to centralized petroleum refineries for blending. These new biofuel refineries or MBRs will also act as “biotechnology clusters” to attract jobs, economic growth and development throughout agricultural sectors of the U.S. and eventually worldwide The Company's goal is to demonstrate that one city, one county, one state can become "petroleum independent" through MBR technologies, much like Brazil has become over the past 30 years. MBR technologies will also allow for not only the production of biofuels, but hydrogen, biochemicals, bioplastics, aquaculture and hydroponics and other value added food products throughout the U.S. and world. These new fuels, energy and bio-based products will ultimately help replace the use of petroleum and usher in a new age of “carbohydrates-use” in the U.S. Thousands of MBR’s will dot America’s countryside creating clusters of economic development opportunities never before seen in rural areas. And because all of the products and co-products can be utilized in local communities, from the foods and nutraceuticals to the biofuels and hydrogen, MBRs will minimize or eliminate the "petroleum food shipping miles" racked up in the delivery of valuable foods to local communities.
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Below are the economics from an approximate $50 million MBR plant--with a $20 million equity investment requirement. If 10,000 of these MBRs were to be implemented in the U.S., the U.S. will have achieved total independence from foreign oil.
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Summarized Sustainable MBR Financials--10 Million Gallons Per Year Biofuels Production
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Disclaimer: This material has been prepared by the Company described and contains forward looking statements. No representation or warranty as to the accuracy or completeness of the information presented herein is made. This summary is not an offer to sell securities nor a solicitation of an offer to buy securities.
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Note: To learn more about the potentials of MBRs please visit EGE's website at www.energeneticsusa. com and download the Draft Article written for The United Nation's UNESCO's World Encyclopedia entitled: "The Next Generation in Biofuels--The Mini-Biofuel Refinery--The MBR".
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EnerGenetics International, Inc. (EGI)
Company Description
EnerGenetics International. (EGI) is a privately held, twenty-five year old agricultural research company which specializes in the research and development of renewable fuels and energy. During this period the Company has raised approximately $20 million from private research partnerships and governmental grants which has been expended on new technologies to improve the economics of producing renewable fuels and energy such as ethanol, biodiesel and hydrogen from grains and biomass. Much of this research has been conducted in conjunction with the USDA and leading universities and these efforts have culminated in the discovery of five patented technologies that Management believes are breakthroughs in the biofuels and bioenergy areas. These new technologies can serve to significantly reduce the costs of producing biofuels such as ethanol and biodiesel by as much as 50%. This is accomplished through the production of higher valued products such as Corn Protein Isolate which is valued at $6,000--$10,000 per ton versus distillers’ grains which are normally valued at $150 or less per ton. And, there are other technologies that the Company has discovered including PLA, PHA, resistant starches, higher quality oils, fluffy fiber cellulose, that when applied to the production of ethanol or biodiesel, can make the bushel have a net value as high as $45.00 per bushel! In addition, these technologies are highly specialized and since they are small-scale (pharmaceutical in nature), they may be employed in smaller, modular, decentralized bio-factories near feedstock sources called “Mini Biorefineries” or “MBR’s”. Management believes that thousands of these MBR’s will dot the countryside producing the highest quality health foods, nutraceuticals, biofuels, bioplastics, aquaculture and hydroponics. These new biorefineries or MBR’s will also act as “biotechnology clusters” to attract jobs and economic growth throughout agricultural sectors worldwide.
The Company’s technologies are divided into two major feedstock areas:
· Biomass Technologies: The production of renewable biofuels and energy (hydrogen) from purpose grown energy crops such as sweet sorghum and jatropha; and
· Grain-based Technologies: The production of higher valued food and nutraceutical products such as corn and soy protein isolates, specialty oils, resistant starches and fluffy fiber cellulose from grains such as high oleic corn, linolenic soy, canola and rice in conjunction with the production of biofuels such as ethanol and biodiesel and energy (hydrogen).
The Company’s MBR units can process grains and biomass into the following products:
· Renewable fuels—ethanol, n-butanol, bio-diesel, bio-aviation, bio-jet and bio-gasoline fuels.
· Hydrogen—a waste by-product for our fermentation processes. This will allow hydrogen to become readily available as a new biofuel source due to the decentralization of our smaller scale MBR units, thus opening the way to the oncoming new “hydrogen economy”.
· All-natural biochemicals—such as butyric, propionic, acetic, lactic, formic acids and other bio-chemicals which are among the basic building blocks of the entire petro-chemical industry, including bio-plastics.
· Higher valued food and nutraceuticals (nutraceuticals are foods that act like preventative medicines to combat diseases). These nutraceutical foods include protein isolates produced from new specialty corn and soy hybrids, high oleic oils, resistant starches, fluffy fiber cellulose, aquaculture and hydroponics products.
Problems With Ethanol and Soydiesel Fuels
· Cost of Bushel = 40-50% of Production Costs = feedstock costs, including by-product costs usually accounts for 40%+ of total production costs for ethanol and biodiesel;
· Natural Gas Costs = 25% of Production Costs = cooking, steeping, distilling, drying down DDGS usually account for almost 25% of total production costs. Natural gas costs have tripled within the past five years and is expected to continue to go up;
· Diesel Fuel Costs = 15% of Production Costs = growing, harvesting, hauling, delivering finished product by rail, barge or truck usually accounts for over 15% of the final costs of ethanol and biodiesel;
· Ethanol Soy Diesel Production Costs Severely Tied to Petroleum Costs—as petroleum and natural gas costs go up so does the cost to produce ethanol and soydiesel. In addition fertilizer is produced from natural gas;
· Animal Feed Production = 40% of Capital Costs: animal feed is usually valued at $150--$200/Ton and the cost invested in equipment to dry-down this animal feed usually accounts for 40% of the capital cost of a plant;
· Only Two Products Produced: Both ethanol and soydiesel plants offer no value-added processes or technologies. They simply produce ethanol or soydiesel and animal feed;
· Ethanol has 100% affinity for Water: It can not be transported via pipeline to the refineries, therefore it is expensive to deliver. In addition, there are too fewer refineries today (down from over 300 thirty years ago to just over 100 with only 30 new refineries constructed within the past 30 years. What is needed are smaller, decentralized refineries.
The Next Generation of Biofuels
The Company considers its biofuels to be the “next generation” of biofuels. Unlike current biofuels which are based on ethanol and soydiesel technologies, our biofuels are based on the economical production of n-butanol and other organic biochemicals called carboxylic acids from grains and biomass which when mixed by transesterification from new esters, and these new esters can be used to produce superior new as biofuels which have superior fuel qualities over conventional ethanol, biodiesel or petroleum-based fuels. These new biofuels include: “Green Bio-Diesel” which produce no SOX, reduced NOX and carbon monoxide emissions when burned as fuel. In addition, our new “Super Ethanol” has “o” affinity for water so that it can be transported via pipeline, and it has an RVP of 7.2 versus 7.3 for MTBE, making it qualified for year-round use in hotter climates, such as California and Arizona. Our new bioaviation fuels have octane no. of 113, all of which are produced wholly from renewable resources.
EGI’s Biomass To Biofuels Technologies
The Company’s biomass to biofuels technologies are here now. They are not dependent upon the next breakthrough in ligno-cellulosics, now considered by experts to be 6 years away. The Company’s technologies in ligno-cellulosics utilize crops containing high levels of “free sugar” which require little or no hydrolysis. Sugars in these crops merely need to be “squeezed out” and fermented into alcohols and biochemicals. These feedstocks do not require ligno-cellulosic breakdown and subsequent hydrolysis (conversion to sugar) via enzymes, acids, cooking, pressures. According to the California Energy Commission sweet cane sorghum (not to be confused with grain sorghum or milo—a distant relative) could become the nation’s leading energy crop if its seasonality problem could be overcome. The Company has solved this seasonality problem which will allow the use of sweet sorghum year-round in almost any climate. This will allow a new energy crop for the production of biofuels and energy throughout the agriculture sector nationwide. Sweet sorghum is a member of the switchgrass family and grows in almost every region of the U.S. and world due to its drought resistance, low water and fertilizer requirements. Because of its high “free sugar” content, approximately 800 gallons of ethanol or “Green Bio-Diesel” can be produced per acre versus 400 gallons per acre per year from corn. Other biomass feedstocks can also be processed into the Company’s new biofuels including jatropha, soybeans, canola, rapeseed as well as food wastes such as grape, tomato, potato, olive and vegetable wastes. Management projects that enough food and agricultural waste is generated annually in the U.S. which if converted into the Company’s proprietary biofuels, it would be enough fuel to completely replace petroleum-based diesel, jet and aviation fuels. Diesel fuel usage in the U.S. exceeds 32 billion annual gallons per year.
EGI’s Grain To Biofuels Technologies
From grains (corn, soy, rice) the Company produces value added products which serve to lower the feedstock cost of the grain when used in the production of biofuels. According to the USDA these feedstock costs can range as high as 50-75% of the total cost of producing ethanol. As an example, the Company’s corn protein isolate product is projected to be worth between $6,000--$10,000 per ton versus the protein from ethanol (distillers grains) or soy diesel plants is worth only about $150 per ton. Management estimates that a bushel of special hybrids of corn can become worth from $40--$80 per bushel in net value when the Company’s patented technologies are used to process corn.
EGI’s Mini-Biorefineries (MBR’s)
Advantages of EGI’s MBR Technologies
Similar to the way "mini" steel mills have come to dominate the giant steel industry or micro-breweries the brewing industry, our Company believes the next monolithic industries to be miniaturized are the grain and fuel industries. We believe these industries (including ethanol and biodiesel) are poised for revolution. The key patented technology employed by the Company adapts advanced pharmaceutical “precision” micron-milling technology to grind grains and biomass up to 5000 times smaller than is currently practiced. This technology eliminates the need to cook and steep grains (and biomass) in acids for days to refine them. As a result refining costs are significantly reduced and proteins, sugars, starches, and other components are not degraded during the process and higher quality products are produced. By applying this smaller-scale MBR technology, economies of scale can be achieved in relatively small-scale plants, resulting in the commercial viability of "Mini-Industrial Bio-Refineries" (MBRs) which can be located near to where the crops are grown.
Benefits of MBR Technologies
The main benefit of this new technology is its ability to produce higher quality, value-added products, such as revolutionary new food and nutraceutical proteins, and, revolutionary new biofuels and additives from renewable resources. There are five major benefits offered by our unique MBR technology. They are as follows: Corn, soybeans, rice (and biomass such as sweet cane sorghum) and food wastes can be separated into protein, oil, starch and fiber under conditions so mild that the values and integrity of these products are protected during processing with little degradation.
The MBR Process will be economical and competitive at relatively small scale. Economies of scale will be achieved in much smaller units, compared with conventional technology that requires large-scale operations to be economic. This feature avoids the need for the very large centralized corn‑processing facilities that have characterized the corn‑processing industry for hundreds of years or for larger biomass processing facilities. Small units will facilitate quick entry into regional markets at relatively low capital cost. Small units can be widely distributed, minimizing transportation costs of feedstocks to the MBR. This will allow the Company to be able to respond to emerging trends in the industry that will favor smaller‑scale operation. The identity of food quality products can be preserved and guaranteed, from field to mouth, through the Company’s small‑scale technology. The Company can respond to the emerging need in the food industry to identity preserve quality food products. Conventional large-scale processors of corn cannot control and audit the origin of the many shipments of grain that enter their plants from innumerable sources, hundreds of miles away. The small‑scale competitiveness of the MBR process will allow the flow of raw material and product to be governed over the entire quality chain. For example, on demand, the MBR Process could guarantee the delivery of non‑genetically‑modified (non-GMO) or organic protein, oil, starch and fiber characteristics to the food industry, and supply these qualities at premium prices. The MBR technology will also positively impact the economics of producing other by-products including alternative alcohol fuels, biodiesel and biodegradable plastics, potentially making these technologies competitive with petroleum products.
· Finally, the MBR Technology will allow the Company to construct stand-alone "Mini-BioRefineries" throughout the agricultural sector to produce higher valued food and renewable fuels and energy such as hydrogen. This will serve to decentralize the supply of electrical power as well and help usher in the “hydrogen highways” of tomorrow.
In summary, here are the benefits of MBR units:
· MBR‘s Are Small Scale: 5-10% of conventional ethanol, grain operations--easier to finance--less capital investment--constructed in shorter period of time;
· MBR’s Produce Higher Valued Products: for example, corn protein isolate can be worth $6,000--$10,000 per ton vs. animal feed at $150/ton—net value/bushel = $45 per bushel—can be continuously expanded to produce additional valued products;
· MBR’s Can Process Multiple Grains: simultaneously, corn, soy, rice, canola, jatropha and energy crops such as sweet sorghum, grape pomace, vegetable wastes, citrus and biomass can be processed to produce multitude of products based on market conditions;
· MBR’s Are Vertically Integrated: from the field to supper table, from grain, to fertilizer, to biofuel, to the products and by-products produced: nutraceuticals, foods, ethanol, bio-diesel, hydrogen, electrical power, biofuels, aquaculture, hydroponics all become vertically integrated processes;
· MBR’s Use No Petroleum or Natural Gas: Hydrogen is a waste by-product and can be used to produce electrical power through hydrogen fuel cells, making MBR’s energy self-sufficient;
· MBR’s Can Identity Preserve Products: GMO, Non-GMO, organic grains and products and the identity therefrom are preserved through MBR processing;
· MBR’s Can Create Economic Development: MBR’s can bring higher paying technical jobs back to communities through ag-manufacturing. This will bring new economic development opportunities that will restore the agricultural economic base that will simultaneously assist our country (and all other countries) in becoming energy self-sufficient.
Projected Sizes and Costs of MBR Units
Depending upon the feedstocks processed, some MBR units that will process food processing wastes can cost as low as several million dollars and produce several hundred thousand gallons of “green biodiesel”. MBR units that process grains can cost as low as $5-10 million, and sweet sorghum $10 million. The return on investment for these facilities can range from 50—150% per year. In addition to n-butanol, each MBR unit will produce approximately 400,000 therms of hydrogen energy per year (per one million gallons of butanol produced), or enough energy to supply the plant with internal electrical power with excess power supplied to the grid. In addition, the Company’s technologies can be used to process oil seeds, such as soybeans, canola and jatropha and other food wastes such as onion, tomato, grape, citrus waste products into ethanol, biodiesel, biochemicals and hydrogen in co-located MBR’s to such food processors. The ideal and preferred MBR size is estimated at $10 million and each can be upscaled from there to handle a host of different feedstocks.
N-Butanol as a Renewable Fuel
N-butanol is a higher form of industrial alcohol usually produced as a by-product of the petro-chemical cracking process. It can also be produced by soil bacteria that ferment wastes. During the Battle of Britain when petroleum supplies were cut-off by German blockades, England relied on the fermentation of n-butanol for survival. Because of its near petroleum-like qualities and versatility, it was used to power England’s planes, jeeps, tanks and even as heating oil during the perils of the war, thus saving England from defeat. A young Jewish scientist, Dr. Charles (Chime) Weizzman, a former student of Louis Pasteur, discovered many of these uses while a student at Oxford, and obtained over 40 patents for its industrial and fuel uses. (As a note: because of his contributions to the war effort, Churchill selected Dr. Weizzman as the first President of the modern state of Israel.) As a note: the Company’s founder was the first scientist to receive a patent using butanol as a biofuel since Weizzman. This patent, entitled “Diesel Fuel by Fermentation of Wastes” was issued in 1983 and trademarked as Bio-Diesel TM. (Please see web pages herein for copies of these patents and trademarks.)
Superior Fuel Qualities of N-Butanol
· N-butanol contains four carbons versus two carbons for ethanol. Hydrogen is also generated as a by-product and is easily recovered and increases the energy yield per ton of biomass or bushel of corn by 17% over that of ethanol. N-butanol also has 4 additional hydrogen atoms over ethanol, resulting in a higher hydrogen energy output in hydrogen fuel cells. Butanol is safer to handle and has an RVP of 0.33 pounds per square inch (Reid Vapor Pressure—a measure of evaporation) versus gasoline at 4.5 and ethanol at 2.0 psi. This also results in the safer storage of hydrogen, a problem associated with the infrastructure of hydrogen supply. With hydrogen as a waste by-product of our fermentation processes, our MBR networks we will be able to supply hydrogen to localized fueling stations anywhere in the U.S. where biomass or grains may be grown;
· N-butanol also contains almost 90% of the BTU value of gasoline versus only 60% for ethanol;
· Unlike ethanol, butanol has little affinity for water (7.8%) versus ethanol at 100% and it blends 100% with petroleum. It is also less corrosive and less volatile than ethanol so it can be pumped through pipelines to petroleum blenders and pumping stations at tremendous savings;
· N-butanol also burns cleaner in internal combustion engines without generating SOX, NOX or carbon monoxide which are compounds toxic to the environment as a result of internal combustion; butanol can burned straight in internal combustion engines with modifications to the air/fuel ratio mixtures or blended directly with petroleum-based fuels in any ratio. N-butanol is also one of the best surfactants known so that it can be blended with ethanol,, water and other organic acids to form new micro-emulsion, ester-based biofuels. It is these ester-based fuels that we believe can be used as total replacements (or additives) for all petroleum-based fuels (diesel, jet, aviation, gasoline, home heating, boiler fuels). In fuel tests some of these butyl-esters were added to regular unleaded gasoline at a 10% blend. The RVP of the gasoline fell to 7.2 (lower than the RVP of MTBE at 7.3—which meets California standards). This ester could allow ethanol to be used in hotter climates year round. (Please see the web page herein which describes detailed research projects conducted by the USDA regarding the use of n-butanol and its esters in such fuel applications.)
The Economical Production of N-Butanol
Though n-butanol has all of these superior fuel traits, the fermentation is very difficult and very difficult to achieve. Normally only about 15-20% of the sugars are fermented to butanol because of the off-products produced during fermentation, such as ethanol and acetone. The yield of butanol in the fermentation broth rarely exceeds 1% due to the toxicity of the butanol. This means that almost ten times more energy is usually required to distill butanol versus that required to distill ethanol. As a result, the recovery cost of n-butanol is very energy intensive. The highest yield reported to date is only about 2%. With that in mind, our Company has sponsored the development of a new process that uses a patented continuous immobilized bioreactor that produces between 4.5-5 g/l/h at yields of 40—50% or almost 400-500% greater yields than that of the traditional butanol process (the A/B/E-Acetone, Butanol, Ethanol process). This means that we can produce almost twice the amount of n-butanol that is usually produced from a bushel of corn (1.3 to 2.5 gallons per bushel) which is equivalent to the yield of ethanol. However, we also obtain 17% in additional energy from the production of hydrogen which is not produced from the ethanol process. The commercialization of this new technology through our MBR technologies can reduce our nation's dependence on foreign oil, provide decentralization of our fuel and power supplies and help usher in the Age of Hydrogen where our MBR networks we will be able to supply hydrogen to localized fueling stations and decentralized power to the grids wherever grains and biomass is available.
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Conventional-Weizzman
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EnerGenetics
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1 Plant produces 95% Butanol
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| Plants:
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3 Plants: A/B/E= Acetone Butanol/Ethanol = 3/6/1 ratio = 3 plants = 60% into butanol
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1 Plant only which produces 95% n-butanol
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| Yields:
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28% butanol/# sugar
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45% butanol yield per lb sugar
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| Toxicity
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1.2% and requires total sterility
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4-5%--uses non-sterile solids
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| Hrs/complete
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48—50 hours
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6 hours, an almost 90% reduction in time
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| Batch
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Turn around time = 1 week
Sterilization required
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Continuous fermentation—non-stop—2500% great efficiency—years of operation—4 turn overs per 24 hours
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| Recovery
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Distillation 99% water removed = / $1.50 gal
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Membranes 5% in 95% concentration—single pass
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| Plant Costs
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Minimum $100 Million
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$5 -- $10 million
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| Production Costs
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$2.50/Gallon
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< $1.00 per gallon
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Bio-Fuels From Grains: Corn/Soy/Rice
The single largest cost in producing renewable fuels such as ethanol or bio-diesel from corn or soybeans is the cost of the feedstock, which, according to the USDA accounts for as much as 50-75% of the total production cost, including any by-product credits for distiller’s grains. The Company was the first company to recognize the potential economic impact of micron-milling technology upon the production of higher valued food and nutraceutical products from grains, and as a result received patents on this technology in 1995. The Company’s technologies allow for the recovery of grain feedstock costs via the production of value-added products, leaving the waste carbohydrates to be converted to bio- fuels and hydrogen in our patented bioreactors at a greatly reduced cost over traditional ethanol refineries. The production of these value added products can substantially lower the capital and production costs of producing renewable fuels and energy by as much as 50%. For example, the protein produced as animal feed from ethanol and soydiesel plants is valued at about $1.50 per ton. The protein isolates produced by the Company are valued at $6,000 per ton.
Higher Value Food and Nutraceutical Products
In conjunction with the US Department of Agriculture, the Company has developed patented processes that process new hybrids of corn, soy and rice into corn, soy and rice protein isolates. These proteins have superior nutrition, functionality and contain higher levels of natural phytochemicals or antioxidants. Other co-products include special corn and soy oils that can lower cholesterol, resistant starches which are non-digestible and fluffy cellulose. Leading USDA scientists believe that these products will revolutionize the food industry. Today consumers are becoming increasingly aware of the dietary diseases related to obesity, diabetes, coronary, and strokes and our foods and their nutritional content are becoming suspect as the primary contributors to these problems.
· The Company's corn, soy and rice protein isolates will allow higher quality proteins to be incorporated into food systems which are tasteless and odorless, and this will reduce caloric content and boost the nutrition and digestibility of foods into which they are added;
· The Company’s protein isolates behave, as "nutraceuticals" (foods that act like medicines) where preliminary tests show that they can lower blood pressure, lower blood sugar, and cholesterol levels, helping to combat dietary related diseases of obesity, diabetes, coronary, stroke and cancer.
Status/Business Strategy/Competitive Advantages/Market Opportunity
The Company has successfully operated and proven its technologies at the pilot plant level. In order to commercialize its technologies, the Company plans to scale-up the technologies in pre-commercial beta-site operations over the next 6-9 months. Samples will be provided to the marketplace and process design and instrumentation engineering studies will be completed. The Company then plans to construct stand-alone, turn-key commercial demonstration MBR plants to demonstrate the efficacy of its technologies using the following feedstocks: corn, soy, rice, sweet sorghum and jatropha to produce biodiesel, hydrogen, nutraceuticals, biochemicals, and aquaculture products there from. In addition, the Company plans to construct turn-key operations at co-locations adjacent to food processing operations, e.g. vegetable, grain, citrus, grape, olive, tomato, etc.
· Potential partners for the Company’s protein isolates include food cooperatives, food companies, e.g. baking, sports and health, nutraceutical, nutritional beverage, snack-foods and confectionery segments;
· Potential partners in the fuels and industrial sectors include: grain cooperatives and growers, fuel ethanol, soydiesel, electrical power generators, refineries, plastics and chemical companies, hydrogen fuel cell companies, vegetable and citrus processors, wineries and breweries, are all likely joint venture candidates.
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