Recovery of Ethanol

The United States has long needed a comprehensive energy policy; and passage of The Energy Policy Act of 2005 by
Congress was the first step toward achieving that goal. The Act has hundreds of provisions; but of interest to us is Title
XV – Ethanol and Motor Fuels, which eliminated the oxygen content requirement for reformulated gasoline (Sec. 1503) and
established a Renewable Fuel Standard (Sec. 1501) that calls for the addition of 4.7 billion gallons of ethanol to gasoline in
2007 and ramps that up to 7.5 billion gallons in 2012. Meanwhile MTBE (methyl tertiary butyl ether) has been banned by
many states, leaving only ethanol as an acceptable additive to meet the pollution reduction requirements of the Clean Air
Act.

This mandate has created a flurry of activity in the ethanol industry with 41 new plants having production totaling 2 billion
gallons per year either under construction or announced as of January 2006. Interestingly, all of these plants continue to
use distillation and molecular sieve drying to convert fermentation broth (which is a dilute aqueous ethanol mixture) to the
required 99.5% fuel-grade ethanol; however, because ethanol and water form an azeotrope, the distillation process is both
capital and energy intensive.

Trans Ionics is developing a unique process called ESep that is capable of producing fuel-grade ethanol without
distillation, and is expected to result in substantial savings in capital equipment costs and in energy consumption.