SCOTTSDALE, AZ--(Marketwire - April 7, 2008) - PetroSun, Inc. (
During a question and answer session following a talk by Gordon LeBlanc, Jr., CEO of PetroSun, to an internal symposium of a major corporation, the question was posed regarding the potential of a large oil discovery that would alleviate the issues regarding supply and its impact on crude oil pricing. When the individual was asked the size they felt such a discovery would be, a billion barrels of recoverable oil was put forward for discussion purposes. However, as major a news item that this would be, the reality is that a billion barrels of oil is only a twelve day supply of production volume and world crude oil refinery capacity. What will the worldwide crude oil production rates be one year, five years or ten years from now? How many actual billion barrels fields are left to be discovered? The reality that proven recoverable oil reserves are declining and demand is escalating challenged PetroSun to pursue algae-to-biofuels and other sustainable alternative forms of energy.
Although the price of a gallon of gasoline and diesel are at an all-time high, that is only a fraction of the true cost to the American public. If the price to defend our energy requirements were factored into the equation, i.e. foreign governments, oilfields and transportation routes, the price at the pump would soar into the $10 to $14 per gallon range. Further evidence of the high price in protecting our energy interest can be found at its regional source. PetroSun was selected by a government laboratory to co-develop an algae derived alternative fuel system that would be utilized by the military. We agreed to the program, but made it known that the cost per gallon based on the restrictive requirements, may exceed $20 per gallon. This posed no problem as the appropriations request stated that a gallon of diesel costs $100 per gallon in hostile locations. However, in the spirit of our political election season, the appropriations request was tabled until 2009. It would seem that nothing should get in the way of providing for the needs of our troops or energy independence, but it does. Consider how the monies spent to protect our dependency on foreign crude could be utilized to improve health care, education and the rebuilding of an aging infrastructure, if adequate sustainable domestic alternative fuels were available.
The current feedstock for ethanol and biodiesel produced in the United States is corn and soybeans. However, the demand for fuel has caused the price to soar to levels that have devastated the domestic and international biofuels markets. Biodiesel plants are either producing at a fraction of their capacity or for the most part not at all. Food and other product prices have also been adversely affected. What the public does not hear a lot about is the affect that corn, soybeans and other vegetable oil crops have on fresh water supplies.
PetroSun is focused on producing algae, utilizing saltwater, brackish or wastewater. This has limited impact on the fresh water resources. However, as more corn, soybeans and other vegetable oil products are grown to meet the requirements for transportation fuel, the demand for fresh water to irrigate these crops increases at an alarming rate. A recent study by a nationally recognized laboratory regarding the correlation between energy and fresh water, demonstrated that it requires 600 gallons of fresh water to drive one mile on ethanol. Our planet's next battles are already being directed towards fresh water rights.
Ethanol (corn) and biodiesel (soybeans) are what we currently have available as alternative fuels. We accept that. However, at productivity levels ranging from 40 to 300 gallons per acre per year from these crops, why would algae not be acceptable even at a lower case production rate of 2,000 gallons per acre per year? Perhaps because the algae-to-biofuels community is mainly focused on super strains cultivated in photo bioreactors? So far, the economics prohibit this segment of the industry from moving forward today and is the primary reason behind the statements that algae-to-biofuels are perhaps five years away. It will probably require $250 per barrel of crude oil or more for these systems to be economically feasible. In time, the price of a barrel of crude oil will support the technology of the photo bioreactors, but why wait?
PetroSun's farming system will utilize native microalgae strains, so as to not disrupt local ecosystems. As stated previously, we will also use either saltwater, brackish or wastewater in our pond system, thereby limiting the impact on the fresh water supply. Our background in the oil and gas industry is the basis from which we developed our harvesting and extraction technology. Despite our stated lower case rate of production per acre being far less than the annual 20,000 gallon theoretical limit of algal oil potential, we are satisfied that we can compete with crude oil pricing and maintain a competitive pricing structure over other vegetable oil feedstocks. We intend to improve on these production rates as we move forward during the maturation of the commercial production of algae-to-biofuels.
"It will probably be stated that some of the above content might be considered politically incorrect from those who have chosen to stick their heads in the sand," stated Gordon LeBlanc, Jr., CEO of PetroSun. "That's their problem. Our children and grandchildren will require alternative fuel options to function as a similar social and economic system that the past three generations came to expect from cheap and abundant oil. Independents and wildcatters built the oil and gas industry. PetroSun has accepted the role of an alternative energy wildcatter and is moving energy forward... NOW!"
PetroSun's operations include oil and gas exploration, development and production and algae-to-algal oil alternative fuels production. The oil and gas division is focused on the exploration of the Holbrook Basin of Arizona, the San Juan Basin of New Mexico and Australian based prospects. The Company will continue the development of oil and gas reserves in Louisiana. The alternative fuels division has entered the commercial stage of its algae-to-biofuels production technology. The Company plans to establish algae farms and algal oil extraction plants in Louisiana, Texas, Arizona, Mexico and Central America during 2008. The algal oil product will be marketed as feedstock to existing biodiesel refiners and planned company owned refineries. PetroSun is headquartered in Scottsdale, Arizona with field offices in Shreveport, Louisiana and Rio Hondo, Texas. For more information about PetroSun visit the company's website at www.petrosuninc.com.
Except historical matter contained herein, matters discussed in this news release are forward-looking statements and are made pursuant to the safe harbor provision of the Private Securities Litigation Reform Act of 1995. These forward-looking statements reflect assumptions and involve risks and uncertainties, which may affect the Company's business and prospects and cause actual results to differ materially from these forward-looking statements.