Green Star Completes Algae Phase I Demo Facility

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Green Star Completes Algae Phase I Demo Facility

Press release, May 11, 2007

SAN DIEGO - Green Star Products, Inc., announced today that it has completed Phase I of its 40,000 liter microalgae demonstration facility (see facility picture at GreenStarUSA.com).

GSPI demonstration facility is located in Montana and is one of the largest demonstration facilities in the world.

Phase I objective in this project is to determine the ability of the GSPI Algae Process System to solve the daunting operational problems for microalgae production, which have plagued the algae production industry for years.

Phase I now is complete and has been successful in controlling the most important variables in algae production, i.e. temperature of water in large systems, salinity (salt content), evaporation, pH (acidity-alkalinity) and most all initial costs of construction.

Mr. LaStella stated, "Experts agree that the major hurdles in production of algae are associated with the control of the mechanical and physical parameters of the growth environment for the algae and the high capital costs of construction of that environment."

Many suitable high-lipid (oil) algae species have been cultivated and already exits to produce the First Generation of sustainable energy farms. Present available algae species can produce 4,000 gallons of oil per acre each year, which is 50 times greater than the oil yield from oilseed crops such as soybean or canola crops. Recent news stories have publish the fact that the world is already experiencing significant increases in food prices because oil crops compete with food crops (Reuters May 8, 2007 – “United Nations tackles sustainable bioenergy growth”).

Algae farms, on the other hand, do not compete with food crops. Algae may be the only long-term feedstock solution for biodiesel production.

A report by the U.S. Department of Energy (DOE) states the following conclusions in relation to algae farms:

The DOE analyses indicate, "that significant potential land, water and CO2 resources exist to support this technology. Algae Biodiesel could easily supply several 'quads' of biodiesel - substantially more than existing oilseed crops could provide. Quad is short for 'quadrillion BTUs', which is a unit of energy representing 10 to the 15th level (1,000,000,000,000,000) BTUs of energy, which is also equivalent to approximately one billion gallons of fuel. This perspective led DOE to focus on the concept of immense algae farms.”

The DOE also states, “Microalgae systems use far less water than traditional oilseed crops. Land is hardly a limitation. Two hundred thousand hectares (less than 0.1% of climatically suitable land areas in the U.S.) could produce one quad of fuel. Thus, though the technology faces many R&D hurdles before it can be practicable, it is clear that resource limitations are not an argument against the technology."

Mr. LaStella explains, "The industry hurdles are mainly associated with costs of construction of algae farms and process systems that can economically control the growth environment of the algae. This is exactly the purpose of GSPI's Phase I demonstration algae facility."

Mr. LaStella further outlined the present state of the algae industry.

There are only two main types of algae production systems in use as follows:

A) Closed Photobioreactors

All attempts to use closed bioreactors for algae fuel crops have all failed. The failure of the closed bioreactors includes the $250 million dollar R&D program spent by Japan. Closed bioreactors are too costly, although they do have a place as a breeder facility (hatchery) for larger systems.

B) Open Pond Systems

The alternative system which is open ponds have had marginal success and are prone to multiple failures from many uncontrolled environmental conditions ranked in order: 1) Temperature and light variances – day and night, summer versus winter, etc.; 2) Infiltration from local algae into open ponds contaminating the cultured algae causing pond crashes; 3) Evaporation, wind blowing dust particles into ponds and rain causing changes in salinity and pH, which affect growth of algae.

The GSPI (licensed) algae system is a Hybrid Algae Production System (HAPS) that incorporates the controlled environment of the closed photobioreactors coupled with inexpensive construction technology to reduce the cost to a level very close to the open pond systems.

In summary, GSPI has developed the field expertise to build and operate the patent pending, proprietary Hybrid Algae Production System (HAPS), a cross between an open and closed pond system. The demonstration, prototype facility is located in Montana with an individual pond capacity of 40,000 liters, which can easily be scaled up to larger systems and acreage.

The GSPI enclosed HAPS have been designed to be constructed utilizing relatively inexpensive local materials anywhere in the world.

Three different pond construction methods (with the same overall design) were used to develop cost factors for time and capital expenditures to determine construction cost data.

The 40,000-liter pond with a four-man crew was assembled in less than 12 hours after the necessary construction materials were onsite. After the water flow commenced, tests for flow rates, mixing rates and pond day and night temperatures changes were charted.

During the test period, varied weather conditions occurred in Montana with temperatures varying from 34°F to 82°F, winds up to 30 mph, heavy rains, some snow, cloudy and sunny periods – all occurred during this time.

However, with the enclosed HAPS, several typical uncontrolled open-pond parameters were dramatically improved. For example, pond temperatures were 30°F to 36°F higher than the outside temperature on cold nights well above the optimum minimum growing temperature for algae of 64°F.

The HAPS also offer additional inexpensive external temperature controls, if necessary, to cool ponds in the hot summer and heat ponds in winter conditions, during extended sunless days, to maintain maximum growth conditions.

Also, algae cannot tolerate direct sunlight and they tend to grow best receiving 25% to 50% of direct sunlight. GSPI’s HAPS enclosed ponds have a partial light barrier with the enclosed material to promote optimum light conditions for algae photosynthesis.

Temperature and light control are the two most important parameters identified by industry reports and must be accomplished at an effective low cost. The next important parameter to be controlled is salinity. Open ponds continually evaporate large quantities of water and leave salt behind. Each time this cycle is completed additional salt water is added. Salt content continually increases and adversely affects the growth of the algae and must eventually be disposed of and exchanged with new water and algae. GSPI’s HAPS ponds do not evaporate the water and can maintain optimum salinity levels for long periods of time.

In summary, GSPI has already addressed the main causes of failures of other systems and we are now ready to inoculate the first HAPS’ pond with high-lipid (oil) producing algae.

See other recent GSPI press releases May 9, 2007 — “GSPI To File Full Disclosure Under New Pink Sheets Rules”; March 15, 2007 — “GSPI Consortium to Construct Algae-to-Biodiesel Facilities in Two Countries”; and March 7, 2007 — “De Beers Fuel Limited Increases Orders for Green Star Biodiesel Reactors.”

Green Star Products, Inc. (OTC:GSPI)(OTC:GSPI.PK) is an environmentally friendly company dedicated to creating innovative cost-effective products to improve the quality of life and clean up the environment. Green Star Products and its Consortium are involved in the production of renewable clean-burning biodiesel and other products, including lubricants, additives and devices that reduce emissions and improve fuel economy in vehicles, machinery and power plants. For more information, see Green Star Products' Web site at http://www.GreenStarUSA.com, or call Investor Relations at 619-864-4010, or fax 619-789-4743, or email info@GreenStarUSA.com. Information about trading prices and volume can be obtained at several Internet sites, including http://www.pinksheets.com, http://www.bloomberg.com and http://www.bigcharts.com under the ticker symbol "GSPI".

Forward-looking statements in the release are made pursuant to the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. Investors are cautioned that such forward-looking statements involve risks and uncertainties, including without limitation, continued acceptance of the company's products, increased levels of competition for the company, new products and technological changes, the company's dependence on third-party suppliers, and other risks detailed from time to time in the company's periodic filings with the Securities and Exchange Commission.

Contacts
Green Star Products, Inc.
Joseph LaStella, President, 619-864-4010
Fax: 619-789-4743

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