IRVINE, CA -- (MARKET WIRE) -- 07/11/2006 -- BlueFire Ethanol Inc. (PINKSHEETS: BFRE) ("BlueFire") was established to deploy the proven Arkenol Technology Process ("Technology") for the profitable conversion of Municipal Solid Waste (MSW) cellulosic materials to ethanol. BlueFire's use of the Arkenol Technology positions it as the only cellulose-to-ethanol company worldwide with demonstrated production of ethanol from urban trash (post-sorted MSW), rice and wheat straws, wood waste and other agricultural residues. BlueFire is the exclusive, perpetual, North America Licensee of the Technology for use in the production of ethanol for the transportation fuel market. BlueFire's goal is to develop and operate high-value carbohydrate-based transportation fuel production facilities worldwide. These "biorefineries" will convert widely available, inexpensive, organic materials such as agricultural residues, high-content biomass crops, wood residues, and cellulose in municipal solid wastes into ethanol. As part of the process of going public, several Biorefinery project development and engineering assets have been contributed to BlueFire valued at over $16,000,000.

BlueFire's technology is extremely versatile, both in its ability to utilize a wide variety of feedstocks and in the end-products that it can produce. This versatility enables BlueFire to consider a wide variety of feedstocks and locations in which to develop facilities to become the lowest cost producer of ethanol.

With the research and development work completed, patent protections in place, the product markets researched, a proven demonstration plant and several full-scale biorefinery projects currently in various stages of development, BlueFire is uniquely positioned to become the world leader in the development, ownership and operation of these biorefineries. BlueFire has completed the arrangement of the major commitments necessary to proceed with final development of the First Commercial North American Waste to Ethanol Production Facility for construction expected by early 2007.

BlueFire will use several strategic "assets" to enter selected markets and sustain its position in those markets when faced with the inevitable competitive response. These strategic assets include:

--  Utility -- the usefulness of BlueFire's technology to process
    cellulose waste to ethanol;
--  Pricing -- the competitive price of its products;
--  Flexibility -- the flexibility to use a wide variety of raw materials
    for feedstocks;
--  Geographic Diversity -- the opportunity for the geographic
    distribution of production facilities, i.e., the ability to locate
    facilities close to their customer base;
--  Political Value -- the technology's attractiveness for sustainable
    economic development and resource independence; and
--  Experience -- the BlueFire teams' experience in applying the
    technology and developing similar types of facilities.
    

Using these strategic assets, BlueFire intends to build a multinational company that leads the world in producing biobased transportation fuels. Its business will encompass development activities leading to the construction and long-term operation of production facilities while maintaining technological advantage of the process technology and all its improvements. In doing so, BlueFire expects to grow the company's revenues to over $10 billion per year domestically.

Ethanol is utilized in a 5 to 10% blend in the U.S. and currently enjoys a modest market of over 4 billion gallons per year and is mandated to grow to over 7.5 billion gallons by 2012. California presently has a one billion gallon per year demand with no significant production in the State. Ethanol blended with gasoline at 85%, provide additional market demand for supply for existing E85 vehicles. In the longer-term, as new hydrogen technologies evolve commercially ethanol is a safe, clean, and inexpensive way to deliver hydrogen to hybrid vehicle fuel cells.

Use of abundant and low cost waste materials provide competitive advantages over existing methods of ethanol production. Use of BlueFire Technology shifts the paradigm for the ethanol market by decoupling production costs from feedstock costs creating a business model with greater predictability on a long-term basis.

Ethanol will be produced from biorefinery facilities opportunistically constructed on or near landfills, waste collection and waste separation sites. Each facility will deploy the proprietary technology, which uses all cellulosic waste materials traditionally disposed of in landfills as feedstock. Ethanol will be marketed to local refiners for blending into the transportation fuel market as an additive to gasoline to provide octane, dilute toxics and extend fuel supplies.

The biorefineries will produce other marketable products, including lignin, gypsum and animal feed. Lignin will be sold or used as fuel to provide the steam and electricity needs of the biorefineries. Gypsum will be sold as a soil amendment or raw material for the building industry. A small amount of waste yeast will be sold as animal feed.

For the last four years, the Technology has been successfully used by an unrelated, independent, and internationally recognized corporation to produce ethanol for the Japanese transportation fuel market. Over the last 10 years, the initial testing on a vast array of potential feedstock has been completed both in the U.S. and at various locations throughout the world. The core technology and other related processes are protected under patents issued and pending by the U.S. Patent and Trademark Office. www.BlueFireEthanol.com

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FORWARD-LOOKING STATEMENTS

Statements about BlueFire Ethanol, Inc.'s expectations, including future revenues and earnings, and all other statements in this press release other than historical facts are "forward-looking statements" within the meaning of section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934, and as the term is defined in the Private Litigation Reform Act of 1995. BlueFire's actual results could differ materially from expected results. BlueFire undertakes no obligation to update forward-looking statements to reflect subsequently occurring events or circumstances. Should events occur which materially affect any comments made within this press release; BlueFire will appropriately inform the public.