IRVINE, CA -- 9:00a ET April 4, 2007 (Market Wire)

BlueFire Ethanol, Inc.'s (PINKSHEETS: BFRE) CEO, Arnold Klann, provides the following letter to its shareholders.

We have completed another quarter with significant progress and development. Since the beginning of 2007, the Company has accomplished several of the milestones needed to solidify our leadership in cellulose to ethanol conversion.

In February, BlueFire was awarded up to $40 million from the U.S. Department of Energy's (DOE) cellulosic ethanol grant program to develop a solid waste biorefinery project at a landfill in California. Under this grant, BlueFire's California Biorefinery Project will turn green waste and wood residues at landfills into approximately 18 million gallons of fuel grade ethanol per year. Additional products to be produced and sold from the biorefinery will include lignin, gypsum, and yeast. BlueFire's current production cost estimate for the project is significantly lower than the DOE's cellulosic ethanol goal of $1.07/gal in production costs by 2012, and DOE's current estimate of approximately $2.26/gal.

Construction is expected to begin next year with production expected on or before the end of 2009. BlueFire's process could be repeated at most of the more than 1,600 landfill sites across the nation. Because it captures methane (the more potent greenhouse gas in landfills) as part of its process as well as provides renewable fuel, BlueFire will significantly reduce the greenhouse gases that cause global warming. All of the ethanol produced at the California Biorefinery Project will be sold under the terms of a long-term contract with Petro-Diamond, Inc., a wholly owned Mitsubishi Corp. subsidiary. Colmac Energy will purchase all of the lignin produced for use as boiler fuel for its biomass power plant located in Riverside County. The gypsum will be sold to local landscape wholesalers and the yeast will be sold as an animal feed supplement.

On March 14th, 2007 BlueFire was one of three companies selected out of the nineteen that applied to receive funding from the California Energy Commission (CEC). The CEC released a Program Opportunity Notice and Application Package for Biofuels Research, Development & Demonstration (RD&D) Grant Solicitation under the Renewable Energy Subject Area, Public Interest Energy Research (PIER) Program in October 2006. The Notice announced that up to $3 million was available for PIER project funding under this solicitation. Each proposal was screened for completeness and reviewed by CEC staff and external technical reviewers. Then, the Energy Commission's Technical Advisory Committee (TAC) reviewed, evaluated, and scored applications submitted in response to the Solicitation using the criteria prescribed in the Application Package. Based on the TAC's scores and suggested condition on funding, the CEC's RD&D Committee has made its proposed funding recommendations for this Biofuels RD&D Grant Solicitation.

On March 16, 2007, Christopher Scott was appointed by the Board as BlueFire's Chief Financial Officer. Prior to this, from 2002 to March 2007, Mr. Scott was the CFO/CCO and FinOp of Westcap Securities, Inc, an NASD Member Broker/Dealer and Investment Bank headquartered in Irvine, CA. Mr. Scott currently holds the Series 7, 63, 24, 4, 27, 55, and Series 53 NASD licenses. From 1997 to 2002, Mr. Scott was a General Securities and Registered Options Principal at First Allied Securities Inc. Mr. Scott earned his Bachelors Degree in Business Administration, with a concentration in Finance, from CSU, Fullerton.

These are exciting times for BlueFire, and we are working on several fronts to deliver enhanced shareholder value. BlueFire has continued to move toward listing on a major exchange. We have filed a Form 10SB to begin the process of becoming a reporting company with the Securities and Exchange Commission and then listing our stock initially on the OTC Bulletin Board, all in order to continue to grow BlueFire and enhance shareholders' value.

We are encouraged by the developing policies at the federal, state and local levels which accelerate support for cellulose to ethanol. Since our congressional briefing in September, we have remained active in policy and legislative discussions aimed at the continued expansion of the renewable fuels market.

BlueFire's production facilities are responsive to President Bush's Executive Order that sets a national goal of replacing more than 75% of our oil imports from the Middle East by 2025 and Governor Schwarzenegger's Executive Order for production of a minimum of 20 percent of California's biofuels within the State by 2010, 40 percent by 2020, and 75 percent by 2050. Ethanol production from cellulose is also responsive to the landmark piece of legislation recently signed by Governor Schwarzenegger to reduce greenhouse gas emissions to the 1990 levels by the year 2020. Ethanol has a positive benefit in greenhouse gas (GHG) emissions reduction. U.S. Department of Energy estimates that on a per gallon basis, ethanol reduces GHG emissions by 18% to 29%. However, cellulosic ethanol production technology such as BlueFire's has an even greater benefit with an 85% reduction in GHG emissions.

Thank you for your continued support and we look forward to fulfilling our mission of becoming the world leader in cellulosic ethanol production.