Named SunSource BioEnergy, LLC, the partnership consists of ethanol producers VeraSun Energy, Glacial Lakes Energy, KAAPA Ethanol and Golden Grain Energy; and technology company Ethanol Oil Recovery Systems.

This is exciting new technology. We believe this breakthrough will improve the economics of ethanol production by creating another product revenue stream.

—Don Endres, CEO of VeraSun Energy

SunSource BioEnergy hopes to sell oil extraction units to other ethanol producers. The company also plans to build a 50-million gallon biodiesel production facility that will use the corn oil for biodiesel fuel.

Although corn works perfectly well as a feedstock for biodiesel, it has a lower oil yield per acre than soybean, canola or rapeseed—preferred biodiesel feedstock plants. Hence, it is not often mentioned commercially as a basis for biodiesel.

But the addition of a process to exploit the corn oil byproduct from ethanol production allows the ethanol producers to derive more revenue from the grain.

The co-production of two biofuel streams is not a unique concept. Among others, researchers at Purdue University have pursued the topic, and Renessen, a joint venture between Monsanto and Cargill, has filed a number of patents in the area.

SunSource apparently has made a breakthrough in commercialization. SunSource BioEnergy will be describing its approach at the Fuel Ethanol Workshop in Kansas City on Thursday, June 30.

More details to come.