DOE Awards AE Biofuels and Pearson Fuels $6.9 Million to Build and Supply E85 Stations in California

Date Posted: September 1, 2009

Cupertino, CA—AE Biofuels, Inc., (OTC BB: AEBF), a global vertically integrated biofuels company,and Pearson Fuels, an alternative fuels provider, today announced that they have been awarded a $6.9 grant from the US Department of Energy (USDOE), through its Clean Cities program.

The Southern California Association of Governments applied for the money through their Clean Cities Coalition, The Partnership.

Since 1994, The Partnership has been facilitating the creation of public/private business relationships and endeavors that serve to accelerate the deployment and market acceptance of Advanced Transportation Technologies throughout Southern California.

In addition, The Partnership has received preliminary approval for a $4 million from the California Energy Commission, through its AB-118 matching grant program.

The award proposes that the parties build and supply 55 public E85 ethanol-fueling stations across California over the next 42 months.

The stations will be located in areas with the highest concentration of flexible-fuel vehicles.

The USDOE estimates that the initiative will help displace approximately 3.5 million gallons of petroleum annually.

This funding will be used to offset installation and permitting costs to position E85 dispensers in areas of greatest ethanol compatible vehicle population and to educate consumers regarding availability of this affordable, cleaner alternative.

Under the terms of the agreement, AE Biofuels will supply Pearson Fuels with cellulosic ethanol and other biofuels for distribution through the E85 filling stations in California. Pearson Fuels will manage the construction and permitting of the new facilities.

“We are excited about the grant award, and we look forward to working with Pearson Fuels to bring our next-generation cellulosic ethanol to consumers,” said Eric McAfee, chairman and CEO of AE Biofuels.

“California has over 300,000 flexible fuel vehicles already on the road today, but only a handful of E85 pumps at the state’s 9,000 stations.

"This grant will allow us to bring cellulosic E85 fuel to drivers around the state and meet the demand for carbon reducing fuels.”

Mike Lewis of Pearson Fuels added, “I am excited to see that we are now in a stronger position to bring alternative fuel infrastructure to the hundreds of thousands of flexible fuel vehicles already on the California roads while measurably reducing the State’s dependence on foreign oil imports.”

For more information, call 212-885-0455.

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