GREENHUNTER BIOFUELS RECEIVES NECESSARY PERMITS
FOR COUNTRY’S LARGEST BIODIESEL REFINERY

GRAPEVINE, TEXAS, July 27, 2007 - GreenHunter Energy, Inc. announced today that its wholly-owned subsidiary, GreenHunter BioFuels, Inc., located in Houston, Texas has successfully acquired Air Emission Permits from TCEQ (Texas Commission of Environmental Quality) under TCEQ's Permit by Rule (PBR) programs.  These permits open the way for construction of a 105 million gallon per year (mgy) biodiesel facility including a separate but related methanol distillation facility.

GreenHunter BioFuels is in the process of converting the former Channel Refining Corporation waste oil/chemical refinery located near Galena Park at the Houston Ship Channel, to production of biodiesel and distillation of off-spec methanol streams from its own biodiesel production mix. Additionally, off-spec methanol acquired from third parties will be refined at this facility.

GreenHunter BioFuels has obtained the necessary permit for a Biodiesel Production Unit that will allow up to 105 mgy of biodiesel production from variable feedstocks located either domestically or internationally, including vegetable oils (soy bean, palm oil and jatropha oil) and/or animal/poultry fats.

Additionally, a Methanol Distillation Unit has now been permitted that will allow distillation of up to 1500 barrels per day of wet methanol.  The unit will produce methanol with purity of 99.85% or better. The methanol distillation unit will serve GreenHunter BioFuel's internal needs for methanol necessary for its biodiesel production unit at the same location. The processing capacity of the methanol distillation unit will also allow GreenHunter BioFuels to take in off-spec methanol from regional petro-chemical industries as well as other national and international sources, distill the product and return it to the in-spec methanol markets in either the regional or international markets.  Industries producing contaminated or off-spec methanol will soon have a ready outlet for their methanol based by-product and waste streams at the GreenHunter BioFuels facilities.

Commenting on this milestone, Mr. Gary C. Evans, Chairman and Chief Executive Officer of GreenHunter Energy stated, “obtaining these two permits, one each for two separate production facilities, were necessary for GreenHunter BioFuel's Houston refinery to begin timely start-up operations. After acquiring this property in April 2007, we immediately began the conversion requirements once we completed the necessary engineering studies. As a result, the facility will be a true multi-feedstock capable production plant.  Our goal is to not only have the largest and most versatile biodiesel refinery in the U.S., but more importantly, the lowest all-in cost facility at less than $0.50 per installed gallon.”

The TCEQ permits limit the GreenHunter facility to firing of natural gas for process heating needs.  The facility will comply with TCEQ standards for all regulated air emissions including NOX, SO2, VOM, PM/PM10 and CO.

Conversion of the existing refinery assets will allow for an extremely fast entrance into the biodiesel markets.  In addition, the distilled methyl esters (aka biodiesel) will have a highly reliable, water-white quality that is most desirable in the biodiesel markets. The 105 mgy biodiesel unit is currently on track to be in production by March of 2008, approximately 60% to 70% faster than a new “greenfield facility” and at a fraction of the cost. Once completed, it is expected to be one of the world's largest, multi-feedstock biodiesel facilities.

The use of existing assets and infrastructure is allowing a speedy conversion of the existing equipment and entrance into the methanol markets on a fast-paced schedule as well.  The methanol distillation unit will be completely refurbished, on-line and in production during September of 2007, six months after acquisition.

Forward-Looking Statements
Any statements in this press release about future expectations and prospects for GreenHunter Energy and its business and other statements containing the words “believes”, “anticipates”, “plans”, “expects”, “will” and similar expressions constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by such forward-looking statements as a result of various important factors, including the substantial capital expenditures required to fund its operations, the ability of the Company to implement its business plan, government regulation and competition. GreenHunter Energy undertakes no obligation to update these forward-looking statements in the future.

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For Further Information Contact:
GreenHunter Energy, Inc.
Gary C. Evans
1048 Texan Trail
Grapevine, TX 76051
Tel: (972) 410-1044