Soybean oil, derived from the seed of the legume plant Glycine max, is the vegetable oil feedstock for most of the biodiesel being produced in the United States today, and soybeans are the largest oilseed crop in the world. The United States is the world's leading producer of soybeans, followed by Argentina and Brazil, according to the American Soybean Association Web site. Seneca BioEnergy's soybean crushing facility in Romulus, Seneca County, will need about 10 million bushels of soybeans a year to produce 15 million gallons of vegetable oil annually for on-site production of biodiesel fuels. Seneca BioEnergy's AgBio Facility will be a mechanical processing crush plant, with mechanical extrusion and pressing of oilseeds. There will be no cooking or roasting of feedstocks, and no extraction using solvents. All feedstocks will be processed into natural products, with no wastes that would require disposal. In this manner, we will produce a high-value natural soybean oil, which can be sold as a food-grade vegetable oil.

To supplement the use of soybeans, Seneca BioEnergy will use Canola seeds as needed at the AgBio Facility to produce vegetable oil for biodiesel fuels. Canola oil is produced from the crushed seeds of Canola plants, which are grown in the United States, Canada and many other parts of the world, according to the U.S. Canola Association's Web site. Canola was first bred in Canada in the 1970s and is a cultivar of the rapeseed plant, a member of the mustard family. Canola's name is a contraction of "Canadian ola,'' with ola being derived from oleum, the Latin word for oil. More than 90 percent of our nation's Canola is grown on the Northern Plains. Canola is an effective and efficient source for biodiesel, although it is not yet being utilized as a common biodiesel feedstock. Canola yields more than 40 percent oil when crushed, compared to 18 percent for soybeans, the most common biodiesel feedstock. Seneca BioEnergy's AgBio Facility will be the region's first combined Soy/Canola mechanical extrusion and biodiesel facility.

Agricultural meal is a byproduct of the extrusion and pressing of soybeans and Canola seeds. The Seneca AgBio Facility will produce a total of 110,000 tons a year of these agricultural meals, which will be marketed as a high-protein regional feedstock for the production of animal feeds for farmers. Soybean meal is high in protein and energy and is one of the most commonly used protein supplements in North America. It is a palatable feedstuff and may be used as the major protein supplement in rations for dairy cattle and other animals. Worldwide, about 85 percent of the world's soybeans are processed, or "crushed,'' annually into soybean meal and oil. About 98 percent of the soybean meal that is crushed is further processed into animal feed, with the balance used to make soy flour and proteins. Of the oil fraction, 95 percent is consumed as edible oil; the rest is used for industrial products, including biodiesel, fatty acids and soaps. The Seneca AgBio Facility produces a superior natural meal, derived from the mechanical extrusion of soybeans and Canola. Our agricultural meal is a more valuable feedstuff in the production of cattle feed than commodity products currently available.

Seneca BioEnergy viewed the Finger Lakes, with its more than 100 wineries and thousands of acres of vineyards, as our home for the production of grape seed oil, as another related agricultural product being produced at the Seneca AgBio Facility. Grape seed oil is pressed from the grape seeds contained in pomace, which is the solid material left over after the juice is squeezed from grapes to make wine. Grape seed oil is a valuable low-fat oil, which is used for countless products and purposes, including restaurants, baking, deep-frying, marinades, salad dressings and flavored oils. It is also used to make cosmetics such as massage oil, hair products, sunburn lotion, lip balm and hand creams. Grape seed oil also has a high concentration of the antioxidant Vitamin E, is naturally cholesterol free, and is considered the lowest trans-fat vegetable oil. Grape seeds are plentiful throughout the Finger Lakes wine region, and Seneca BioEnergy developed a unique process plant for separating the seeds from the waste pomace. We cold press and filter various varieties of grape seed oils for retail bottling and bulk distribution.

Biodiesel is an alternative fuel made from renewable sources, including vegetable oils, recycled cooking oil, waste grease and tallow. Biodiesel is nontoxic, biodegradable and can be used in regular diesel engines with little or no modification. After being harvested, soybeans and other feedstocks are crushed into oil, which undergoes the biodiesel production process called transesterfication, removing glycerin. What are left are methyl esters, the chemical name for biodiesel. Biodiesel is being produced in the United States, reducing our nation's dependence on foreign oil and putting money back into rural economies. Since biodiesel is produced from soybeans and other oilseed crops, it can be grown over and over, unlike petroleum, which is nonrenewable. As a much more environment-friendly fuel than petroleum diesel, biodiesel lowers greenhouse gas emissions by up to 78 percent and does not have catastrophic effects if it is spilled. Biodiesel is less toxic than table salt and biodegrades faster than sugar, according to the National Biodiesel Board Web site. Biodiesel is typically blended with petroleum diesel in formulations referred to as B2 (2 percent biodiesel, 98 percent petroleum diesel), B5 (5 percent and 95 percent), B20 (20 percent and 80 percent). Though biodiesel is most commonly used in these kinds of blends, it can also be used in its pure form (B100), and many diesel engine manufacturers are testing operational performance using B100 fuels. Although biodiesel contains a similar number of BTUs as petroleum diesel, which means similar engine performance in torque and horsepower, the chains are easily oxygenated and have a higher flash point. This makes biodiesel a much cleaner burning fuel that is safer to handle and store than petroleum diesel. And because biodiesel can go into the current fuel distribution system, it eliminates the huge cost of revamping the nationwide fuel distribution infrastructure. The Seneca AgBio Facility produces 15 mgy biodiesel for local and regional distribution to trucking fleets, bulk petroleum terminals and home heating oils.

The Seneca BioEnergy facility has been designed as a "Closed-Loop Green Energy Complex," with infrastructure and operating systems that produce on-site renewable energy. The oilseed processing and biodiesel production equipment require approximately 5 Megawatts of power and more than 40,000 pounds per hour of steam for process heating. We are utilizing Biomass Combustion for our on-site generation of steam and power, thereby substantially reducing the carbon footprint of conventional natural gas or petroleum-fired systems. We are managing the production and delivery of Biomass feedstocks (including waste wood, wood chips, switch grass and willows) for use in our renewable energy production facility. Revegetation of unproductive farmlands and reclamation of abandoned coal mine sites throughout the Pennsylvania and New York region will be completed with biomass crops to be harvested and used as feedstock materials for our closed-loop energy production facility.

The Seneca BioEnergy facility has been designed as a "Closed-Loop Green Energy Complex," with infrastructure and operating systems that produce on-site renewable energy. The oilseed processing and biodiesel production equipment require approximately 5 Megawatts of power and more than 40,000 pounds per hour of steam for process heating. We are utilizing Biomass Combustion for our on-site generation of steam and power, thereby substantially reducing the carbon footprint of conventional natural gas or petroleum-fired systems. We are managing the production and delivery of Biomass feedstocks (including waste wood, wood chips, switch grass and willows) for use in our renewable energy production facility. Revegetation of unproductive farmlands and reclamation of abandoned coal mine sites throughout the Pennsylvania and New York region will be completed with biomass crops to be harvested and used as feedstock materials for our closed-loop energy production facility.

The production of manufactured soils from various products and residual materials has evolved as an acceptable environmental practice for the purpose of processing compost materials, capping sites and retail sales of bagged products. Applied Reclamation Techniques, LLC, the parent company of Seneca BioEnergy, has been working for over 5 years to demonstrate the environmental effectiveness of producing manufactured soils from various feedstock materials. We have been working within the anthracite coal region of Pennsylvania, spanning across multiple counties with tens of thousands of acres of abandoned mine pits and coal refuse banks, which plague the environmental resources of the region. Acid mine drainage and open disposal pits create continued economic and environmental concerns throughout the region. Recently, the PA Department of Environmental Protection (DEP) has accepted the use of manufactured soils based upon treated residual materials as an acceptable mine reclamation approach, and the Principals within our Company have pioneered these activities. The Seneca AgBio Facility will include the processing technologies required to produce manufactured soils from imported materials, such as grape waste pomace, cattle manure, and other residual materials previously accepted by NYSDEC for beneficial reuse. These manufactured soils processes will augment the agricultural products processing activities to be implemented for production of renewable fuels feedstocks of soybean crushing, soy meal processing and soy oil production. The combined alternative fuels production and environmental restoration components of the Seneca BioEnergy operations will compliment our overall program for environmental sustainability.