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Jan 2, 2008 12:06 PM

VeraSun Energy Corp has announced that it began work on an oil extraction facility at its 120 million-gallon-per-year (MMGY) ethanol biorefinery located near Aurora SD.

The facility will utilize a technology designed to extract corn oil from distillers grains, a co-product of the ethanol production process.

Production is targeted to begin in the fourth quarter of 2008 and the process is expected to yield 7-8 million gallons of corn oil annually from 390,000 tons of distillers grains. The corn oil will be made available for sale to the biodiesel market. One gallon of corn oil yields approximately one gallon of biodiesel, increasing the production of renewable fuels without creating additional feedstock demand.

Following installation at the Aurora facility, VeraSun plans to implement the technology at its Fort Dodge and Charles City IA, biorefineries by the end of 2009. The company originally announced its oil extraction technology in November 2006.

Biodiesel contains no petroleum, but can be blended at any level with petroleum diesel to create a biodiesel blend. According to the National Biodiesel Board, there are approximately 165 biodiesel facilities in operation today and another 84 either under construction or expansion. The industry has grown from a capacity of 500,000 gallons in 1999 to approximately 1.85 billion gallons today with another 1.4 billion gallons expected to come on-line by the end of 2008.