Billion Gallon Club

Here is the BioFuels Digest coverage about GreenPlains/Global deal:

Green Plains joins Billion Gallon Club; acquires Global Ethanol for $169M

Two things the SkunK finds interesting here.  The first is the reminder that GreenShift is within striking distance of joining that exclusive "Billion Gallon Club" mentioned above - by having 1B gallons of Ethanol Production under contract for corn oil production. 

The second is how Green Plains, a public company, decided to structure the Global deal:

"The definitive agreement provides that the proposed acquisition will be accomplished through a merger of a newly formed wholly-owned subsidiary of Green Plains with Global."

For those who have seen something odd whenever GreenShift creates a "newly formed wholly-owned subsidiary"  to do a big deal, may find it enlightening that it is a common structure method among public companies doing a merger or acquisition.

SkunK

No longer GERSD - Back to GERS

After the reverse split GreenShift had a temporary "D" assigned to its trading symbol.  We are now back to "GERS"
SEE HERE

SkunK

Three GreenShift "Answers"

Hard to see docket above?  Click HERE for larger copy.

As one can see on the last three entries on the updated docket, GreenShift has added three "answers to the defendant's counterclaims.  The three answers are below:

Al-Corn Clean Fuel Answer
WI Grain Producer Answer
Bushmill, Chippewa Valley, Heartland Answer

SkunK

Two GreenShift Customers Join Forces

Thanks to some readers for the heads up, I've been near the edge of the grid lately.

Two of the largest GreenShift customers will become one as Global Ethanol is purchased by Green Plains Renewable Energy for 169.2M. About half of that is debt.  Expected to become final in the 4th Quarter.

"The Global Ethanol plants have a total production capacity of 157 million gallons. The acquisition will increase Green Plains' overall capacity by 31 percent."

GPRE Press Release
See Full Article HERE
SEE Star Tribune Article here

SkunK

Ethanol Producer Magazine

The Ethanol Producer Magazine is out for October 2010 and they have a recap of recent GreenShift events:

Fourteen ethanol plants and two technology/manufacturing companies named in a patent infringement lawsuit will have their cases tried in the Southern District of Indiana after a U.S. Judicial Panel on Multidistrict Litigation ruled that the cases will be consolidated. GreenShift Corp. and its subsidiary, GS CleanTech Corp., are suing ethanol plants in Illinois, Indiana, Iowa, Minnesota, Wisconsin and North Dakota for allegedly infringing on its patented corn oil extraction technology. Also being sued are ICM Inc. and GEA Westfalia Separator Inc. GreenShift announced Aug. 17 that it has settled the lawsuit with one ethanol plant, Center Ethanol LLC of Sauget, Ill. The company entered into a license agreement for use of GreenShift’s patented corn oil extraction process.

SEE HERE
Halfway down the page
***********************
Also Interesting:  Ethanol price surge continues.  "This could help to spark widespread investment buying in both the energy and ethanol markets over the next several weeks and months."
***********************
And See this new potential Competition?  Wonder why they refuse to be named for the article?

"The 52 MMgy ethanol plant conducting tests on MSC system’s coproducts, which declined to be named for this article, began operating Fluid-Quip’s system a year ago."

Ethanol Producer Magazine lists only four plants with a 52MMgy capacity HERE
Coon Rapids, IA;  Sterling, CO; Utica, WI; Hastings NE.

At the Fluid-Quip web site they appear to back off actual corn oil extraction and describe  it as a separate option here:

"Oil can be recovered during the evaporation process using an oil recovery centrifuge. The stream has minimal protein content compared with traditional streams so much less emulsion is created. Because of this, oil recovery is significantly improved when recovering oil while using the MSC process. The remaining syrup is added to the DDG as in traditional operation."


SkunK

Court Update

Here is the court docket where everything is recorded.  As you can see not much has happened since I blogged on the "Answers to Complaints" or the individual defenses a week ago HERE.  We do have a number of "Notice of Appearance" which is all the lawyers telling the other lawyers and the court they are involved in the case.  Single, random example HERE. 

Kind of like when you walk your dog and you come upon another dog and how they pass information back and forth about each other - Strike that thought from the record! lol

Yes sir, there are a lot of lawyers  involved here. 

SkunK

Golden Grain Reports

Golden Grain and their non-patented corn oil extraction system has been featured in previous blogs HERE and HERE and HERE and HERE.

HERE is their newest report:

The average price we received for our corn oil increased by approximately 36% during our third quarter of 2010 compared to the same period of 2009. Management attributes this increase in corn oil prices with a growing demand for corn oil produced by ethanol plants. Total pounds of corn oil sold during our third quarter of 2010 increased by approximately 32% compared to our third quarter of 2009. Management attributes this increase in corn oil sales with the fact that our corn oil extraction equipment was operational for more of our third quarter of 2010 than during the same period of 2009. We are continuing to fine tune the operation of our corn oil extraction equipment and we anticipate comparable corn oil yields to the third quarter of 2010 in the future. Management anticipates that corn oil prices will stay in the current trading range. p. 19

SkunK

Murphy Oil buying Ethanol plant in Texas Panhandle

Like Valaro, we now see Murphy Oil Corp buying (now two) distressed ethanol plants, getting more into the ethanol market and becoming their own supplier of about half their ethanol needs.  Both are 'potential COES customers' who would be great additions to GreenShifts business partner list.    
*******************
HEREFORD, Texas — Murphy Oil Corp. has purchased an ethanol plant in the Texas Panhandle that was never completed because of construction delays and bankruptcy.

Murphy Oil has completed the purchase of the former Panda Ethanol plant that should be capable of producing 115 million gallons per year.

"We hope to be fully operational sometime in the first quarter of 2011," West said.

The company plans to use the ethanol to blend with the gasoline it sells at more than 1,000 retail outlets, many of which are located at Walmart Supercenters.

"This plant, in combination with our Hankinson, N.D., plant, fulfills about half our needs," West said.

The North Dakota plant that Murphy bought for $90 million produces about 110 million gallons per year, President and CEO David Wood said in a news release.

***********************
Entire Article HERE

another ARTICLE 

also HERE

Murphy Oil Hompage HERE

SkunK

America Rises

Patent Litigation Update

All the patent litigation (still awaiting Adkins) has been centralized by the MDL for all pretrial motions and rulings into the Southern Indiana District federal court under Judge Larry J. McKinney.  An earlier blog showed the court taking charge and laying out the ground rules.

Now we have the defendants sending in their defenses.  Some defenses appear like new angles to me, while others are very familiar.  All seem to trigger an immediate "Wait a minute, what about . . ." response from the SkunK; although I am a GreenShift Investor and therefore look at things through my GreenShift tinted glasses.  I will try to lay out some arguments later, but if a consensus of readers think their is a particular strong argument by the accused infringers, let me know and I will know where to focus my research.  SEE  DEFENSES BELOW:

AL-CORN (old Minnesota district defense filing resubmitted.  By mistake?)

AL-CORN (amended) (already?)

BUSHMILLS

IROQUOIS (note non-standard Affirmative Defenses b1, b2, b3 here?)

UNITED WISCONSIN

There is you reading assignment!  You thought you where going to get some yard work done today???  lol

SkunK

PS. 
In reference to IROQUOIS b1 mentioned above:
• Reduced Energy – Since corn oil is an insulator, removing it improves the heating efficiency and reduces the energy demand of corn ethanol. The EPA projected reductions in thermal energy use of 5.4% due to use of corn oil extraction technology. While GreenShift believes the energy savings are substantially greater (i.e. 10% projected by GreenShift?), the EPA’s estimate corresponds to industry-wide savings of about $160 million per year at current market prices at the 70% penetration rate projected by the EPA.

So, lets see if I follow this:  Since GreenShift projects "approximately 10%" and the EPA uses 5.4% energy savings to compute their figures, we can ignore an issued patent.  And how do they plan on proving GreenShift was wrong about the 10% energy savings if they do not admit they were using Greenshift's exact technology?  I wonder if they will switch their offices to electric heat this winter to keep that electric bill up?  lol 

New PATENT Application

METHODS FOR ENHANCED PROCESSING OF BIOMASS USING FLASH DESICCATION AND/OR MECHANICAL HYDRODYNAMIC CAVITATION 

The SkunK has been on patent watch for quite a while.  Here is another gem as of September 9, 2010 .  GreenShift just published an application for another patent.  SEE HERE for patent applications tied to "Winsness" the last name of Dave Winsness, the Chief Technology Officer of GreenShift.  Notice this is another patent with both Mr Kriesler and Dave Winsness as the inventors.

Kreisler; Kevin Elliot; (Mt. Arlington, NJ) ; Winsness; David James; (Alpharetta, GA)

"The technology is designed to dramatically improve the energy balance and yield from corn (and any derivative thereof), cellulosic and other forms of biomass including, without limitation, grains, seeds, grasses, wood, algae, agricultural wastes, food wastes, forestry products, and waste products such as paper, trash and/or sewage sludge. A significant benefit of the technology is that it increases the availability of fermentable sugars and extractable lipids and protein in whole corn while enabling corn ethanol producers to diversify their feedstock mix by accepting and processing cellulosic biomass derived from corn (including corn cobs and stover) into additional ethanol, lipids and commercial feed products. For example, it is believed more starch is accessible to the enzymes by reducing the particle size using FD and/or MHC. This degree of flexibility does not exist in the corn ethanol industry today and it would enable existing corn ethanol producers to reduce their financial and market risk while enhancing their competitive posture in the growing but challenging renewable fuels industry. The technology is designed to achieve similar objectives for any enzymatic, thermal or other biomass-based production process such as cellulosic ethanol production by facilitating increased conversion efficiencies and diversification of feedstock and product mixes."

Notice this patent was filed 9 March 2010, only now being published by law.  By publishing the patent this is supposed to eliminate/reduce others trying to also patent it.  As we have seen, sometimes the publishing helps those trying to copy it.  That leads to litigation.

SEE NEW PATENT APPLICATION HERE

SkunK

Lincolnway Energy LLC gets Grant

A current GreenShift litigant gets a government grant to switch from coal to biomass.

"Repowering our biorefineries to operate on renewable energy is the next logical step in reducing our use of fossil fuels as we produce domestic, renewable energy from corn and other homegrown feedstocks," said the program's author, Sen. Tom Harkin, D-Ia.

SEE HERE

Details, second source here

SkunK

PS  Put those dice away - that is "Nevada", Iowa.  They have had some problems keeping that coal burning in spec.  SEE HERE.

Nearly 13 Billion

The Ethanol Industry is on a clip to produce a record  - nearly 13B gallons this year.

SEE HERE

SkunK

MDL - Taking Charge

We got our first real document in the now centralized MDL case.  I can take a couple good things out of this:

The first is, it appears the Judge hass taken charge and is setting down the ground rules.  It is to everyone's(?) advantage to get this done as quickly as possible, and an experienced judge who knows he's in charge is a good sign of that. 

The second thing is "every member in good standing of the Bar of any district court of the United States is entitled to practice in any action transferred under Section 1407; therefore, no motion to proceed pro hac vice is required."  The SkunK believes this will reduce the number of lawyers involved at least during this phase, and that should keep the cost and the momentum moving forward.

SEE HERE

SkunK

PS Sorry for the word document, best I can do at this point.

Meet the GreenShift Patent Lawyer Team

If you needed open heart surgery you would not want to depend on your family doctor, no matter how much you like him.  I imagine they could do the job, but you would hardly want them fumbling through  a "Heart Surgery for Dummies" handbook while they are sawing through the ol'chest cavity.  Likewise you really need a specialist for patent law. 

That is what GreenShift has in CANTOR COLBURN LLP - a specialist who is a leader in patent law.

A common signature we see on GS CleanTech Corporation filings is "Michael J. Rye".  Recent EXAMPLE HERE.  He is a partner and co-chair in the Litigation Practice Area.  He has been with Cantor Colburn since 1997 and a partner since 2002.  Take a look at some of the major cases he has been on and the results.  SEE HERE.  Of the eight featured cases none seem to have gone to the jury.  It seems that reaching a settlement after discovery is a likely outcome.  The SkunK thinks that is also the most likely outcome here.  After discovery,  cool experienced patent lawyers on both sides will know the likely results, and will steer their clients towards an equitable settlement based on the weight of the case.  If I am right, then with the pretrial discovery focused by the MDL to a single judge is a master stroke - and if we see a settlement - it will be after the bulk of discovery and before the cases are sent back to the original courts for trial.  We now have only a single court now to watch [Adkins being the (temporary) sole exception], and if I was forced to guess this thing should be settled in between three to six months. 

*****************************

When that happens the SkunK hopes for - and expects - a "Black Swan Event". 

1.The event is a surprise (to the market).

2.The event has a major impact. (on the pps)

3.After the fact, the event is rationalized by hindsight, as if it had been expected.  (pps swings even higher than expected)

******************************

There is however, what those who predict  human behaviour call the "human factor". (Think horses are hard - try betting on the NFL!)  Humans do not always act in their own rational self-interest or exercise rational behavior.  Yes, consciousness is an odd, funny thing.

Here is an article Mr. Rye co-authored a couple years ago:  SEE HERE

SkunK

MDL ORDER filed and case transferred in the Amaizing Case

Just coming across the wire - HERE - is the Amaizing Energy Atlantic & ICM case now officially transferred to southern Indiana.  Expect rest to follow quickly. 
SEE HERE

SkunK
P.S. Just added:
Blue Flint,
Wisconsin Grain Producers, LLC
Bushmills Ethanol
Iroquois Bio-Energy Company
GEA Westfalia Separator

Also note ESYR is up some 600% - they license GreenShift Technology and like GreenShift have as Chairman of the Board Kevin Kreisler with new president Dr.Miller.

MDL Order filed in the ICM Case

The SkunK has been waiting for the gears of justice to start grinding again after the huge MDL ruling.  We have had some information about Adkins and that was covered in a blog last week.  We now have seen the first MDL order filed in a court - actually moving the case to the Southern District of Indiana.  Here is the MDL ruling filed in the Kansas/ICM court - just filed on the 1st of September - As you can see by the blue font at the top of each page.
SEE HERE

SkunK

GPRE Stock ALERT

Here is a stock alert for GPRE based on their use of patented GreenShift corn oil extraction technology.  

SEE HERE

SkunK