1 May 1998

BAT International (OTC:BAAT) has signed a preliminary license agreement to obtain rights and options for a new fuel emulsification process. "Green Fuel" utilizes a state-of-the-art process that fully emulsifies water and hydrocarbons (diesel, gasoline or ethanol) without the need for carriers, chemicals or direct injection to hold the components together.

The resulting "Green Fuel" has the same heat content per pound as No. 2 diesel but includes 20% water. This means there is approximately a 20% improvement in efficiency of hydrocarbon use, which lowers fuel costs by up to 20%. The emulsification process creates a diesel fuel blend that, when subjected to extreme high or low temperatures and demanding centrifugal testing, does not separate.

Testing performed by Southwest Research Institute in San Antonio, Texas, produced results that exceeded ASTM standards for No. 2 diesel. Only trace water molecules can be detected in testing and analysis, and it appears the balance of the water is incorporated in the hydrocarbon chain. The water and diesel components emulsify become one, and independent test results showed absolutely no additional wear on the engine parts.

The fuel emulsification process was described by the US Army TARDEC Fuels and Lubricant Research Facility as "the only method available to emulsify water and/or ethanol with diesel." "Green Fuel" leads to substantial reductions in emissions. Independent testing by County of San Bernardino yielded a 50% reduction in smoke or opacity emissions. Other tests indicated a 35-80% reduction in NOx, depending on load.

These two elements are major contributing factors to smog and other air pollution. Use of this fuel in vehicles, trucks, buses, trains, shipping, power generation and other major petroleum markets could lead to very significant energy savings and reductions in air pollution.

BAT will initially focus on demonstrating the technology in power generation and transportation sectors, with future plans to expand distribution to all areas of petroleum usage. US patents on this technology have already been filed and issued and international patents are being filed.

Contact: Bill Wason, 818-565-5555
Source: B.A.T. International