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Biodiesel Agricultural Research

Oilseed R&D; differentiates Blue Sun from other producers in the biodiesel industry

Blue Sun's agriculture research and development plan is focused on developing low-cost oilseed crops that are well-adapted to the hot, arid growing conditions of the High Plains. Blue Sun estimates that these new types of oilseed crops - our R&D; includes dryland mustard, false flax, canola, and rapeseed varieties - can reduce production costs of biodiesel feedstock by 40%. This is crucial since the cost of feedstock (usually made from more expensive soybean oils) represents 75% of the total cost of biodiesel fuels. The social, economic and environmental benefits of biodiesel will not be realized until the price is competitive with petroleum diesel. Thus the Blue Sun strategy represents a significant opportunity to increase biodiesel use in North America.

Blue Sun planted more than 5,000 commercial acres of innovative oilseed crops in Colorado
and Nebraska in 2004, increasing production and adding cropping in Oklahoma and Kansas
during 2005.
Blue Sun maintains research plots of more than 200 oilseed varieties at 10 university research stations at Kansas State University, Colorado State University, the University of Wyoming,
and the University of Nebraska.

Blue Sun has been awarded several U.S. Department of Energy (DOE) and U.S. Department of Agriculture (USDA) grants to breed and commercialize new proprietary oilseed varieties for biodiesel production. Blue Sun's crops are bred for improved heat and drought tolerance, early maturity, cold tolerance, pest and disease resistance, and other important agronomic traits. An additional benefit for regional farmers is the opportunity to grow biodiesel crops on unused cropland during the winter wheat crop rotation, adding profit to the farmers' bottom line.

Expert Researchers
Charlie Rife, Ph.D., former Research Assistant Professor and Project Leader of Canola Breeding at Kansas State University, has joined Blue Sun full time as Blue Sun's Oilseed Crop Scientist and plant breeder. Dr. Rife leads Blue Sun's oilseed crop identification and testing program, working with top researchers at Kansas State, Colorado State University, the University of Wyoming, and the University of Nebraska. In addition, Blue Sun's full-time agronomist, Gus Foster, M.S., works closely with university extension agronomists and Blue Sun's network of agronomic experts to provide hands-on support to Blue Sun's family of growers.

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Farmer Cooperatives
Blue Sun Biodiesel has formed strategic partnerships with two value-added producer cooperatives, Progressive Producers NonStock Cooperative in Nebraska, and Blue Sun Producers, Inc. in Colorado, Kansas, Wyoming, Oklahoma, and Montana. These cooperatives supply oilseed crops exclusively to Blue Sun. The arid High Plains cropland of Nebraska, Wyoming, Kansas, and Colorado alone produces more than 100 million bushels of wheat annually. Wheat producers on the High Plains benefit from oilseed crop production through Blue Sun's efforts to develop an adapted, high yielding, industrial oil producing energy crop that will be an additional crop and income source in the current winter wheat crop rotations. There is an estimated 5.6 million acres in wheat production where farmers could add a biodiesel crop in the crop rotation cycle. Utilizing this acreage would yield 165 million gallons of biodiesel per year and $280 million in added revenue to farmers.

For more information on Progressive Producers NonStock Cooperative in
Nebraska please contact:

Dan Laursen
dlaursen@bbc.net

For more information on Blue Sun Producers, Inc. in Colorado, Kansas, Wyoming,
Oklahoma, or Montana, please contact:

Sean Lafferty
970-221-0500
sean@gobluesun.com

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