GREENHUNTER ENERGY BEGINS COMMERCIAL OPERATION OF
METHANOL DISTILLATION SYSTEM

GRAPEVINE, TEXAS, September 5, 2007 - GreenHunter Energy, Inc. announced today that its wholly-owned subsidiary, GreenHunter BioFuels, Inc., located in Houston, Texas has begun commercial operations with the start-up of a 1,500 barrel per day methanol distillation system; commercial production should commence on or before September 10, 2007. The methanol distillation process was permitted with the TCEQ (Texas Commission of Environmental Quality) earlier this year and was designed to distill off-spec methanol to a purity of 99.85% or better.

The methanol distillation system is a key element of GreenHunter’s 105 million gallon per year biodiesel refinery, the country’s largest, slated for initial operations during the first quarter of 2008. The methanol distillation unit has enough capacity to distill recovered methanol from GreenHunter’s biodiesel refinery as well as significant amounts of off-spec, third-party methanol acquired from other industry operators. This
may include off-spec methanol containing water, saltwater (chlorides), residues from processing such as vegetable and animal fats/oil compounds and residues from biodiesel processing such as glycerin, mono/diglycerides and methyl esters.

Commenting on this milestone, Mr. Gary C. Evans, Chairman and CEO of GreenHunter, stated “With the start-up of our commercial operations, third party sources along the Gulf Coast will find a unique alliance opportunity with GreenHunter. As a recipient of off-spec methanol, suppliers of methanol feedstock will have an outlet that will be far superior to disposal. We can receive product at our Houston Ship Channel location, by truck, rail or barge and can ship the finished product via any of these transportation methods. Our biodiesel refinery will only utilize approximately 20% of the available capacity of this new methanol distillation system, therefore, making over 1,000 barrels per day of distilled methanol available for sale to commercial operators wanting a reliable source of 99.85% methanol.”

The methanol distillation unit was completely refurbished, permitted, and in commercial production less than six months after it’s acquisition. The use of existing assets and infrastructure allowed for a speedy conversion at a fraction of the cost of a new installation.

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.


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