SOURCE: Alternate Energy Corporation

July 20, 2006 16:05 ET

Alternate Energy Corp. Updates Shareholders on Business Developments

AEC's Hydrogen Technology Process That Allows for the Production of Commodity Chemical By-Products Opens Up a Multi-Billion Dollar Worldwide Market of Opportunity

BURLINGTON, ON -- (MARKET WIRE) -- July 20, 2006 -- Alternate Energy Corporation (AEC) (OTCBB: ARGY), a company that is focused on the commercialization of its hydrogen production technology to multiple markets, today issued a progress and activities update to its shareholders.

In November of 2005, AEC announced that it had a breakthrough in its hydrogen production process technology, and was now able to produce a saleable commodity chemical product that came as a by-product of its hydrogen process, thus leading to the filing of a provisional patent on a new production process.

Then, in March of this year, as a result of AEC's continuing technology development efforts, the Company announced that it could now produce a second commercially saleable commodity chemical product that when combined with the first, is expected to open up a multi-billion dollar worldwide market to the Company. The Company now anticipates that with further development of its technology it will likely be able to produce additional commodity chemical products for world markets as its process generates pure hydrogen for various applications.

Recent Activities and Development Highlights:

--  AEC announced on January 18th that the new ability to produce
    commodity chemicals as a by-product caused it to re-define its business
    model, to become a producer of valuable commodity chemicals and to become a
    player in the production of pure hydrogen for a wide spectrum of commercial
    applications.
    
--  AEC announced on February 1st following the "State of the Union"
    address given by President George W. Bush, that it was in full support of
    the President's Advanced Energy Initiative.  During his speech the
    President said, "We must change how we power our automobiles.  We will
    increase our research in better batteries for hybrid and electric cars, and
    in pollution-free cars that run on hydrogen."
    
--  AEC announced on May 3rd the receipt of a "letter of interest" from
    BOM-Brasil Óleo de Mamona Ltda, a company that processes castor beans and
    is today a worldwide supplier of castor oil and other derivative products,
    with regard to the possible installation of an on-site AEC bulk hydrogen
    production facility next to BOM Brasil's operation in Bahia, Brasil -- the
    primary castor bean production area in the Americas.  AEC's plant would
    supply bulk hydrogen to BOM at a significant reduction in cost to what they
    are currently paying for their 'trucked-in' hydrogen.
    
--  AEC announced on June 26th an agreement with Genesys Engineering, P.C.
    to design and construct bulk hydrogen production plants for AEC customers
    on an exclusive basis.  This relationship with Genesys, a design,
    engineering and construction firm that has experience and a long term
    interest in the energy industry, satisfies AEC's need for an engineering
    partner that would design and construct the bulk hydrogen plants at
    customer sites.
    
Blain Froats, President and CEO of ACE, stated, "The progress of our Company, with our discoveries and developments to date, are expected to have strong impact on our business model. The ability to produce valuable commodity chemicals for a world market will give us the ability to offset the cost of producing hydrogen to such an extent that we believe our prices can be very competitive in the bulk hydrogen market. And, as we've said earlier, it is quite exciting for our Company to have the opportunity to become a provider of commodity chemicals to a worldwide market with products that are valued at market prices greatly exceeding the value of the hydrogen being produced."

Mr. Froats added, "Our research has shown that the market for bulk hydrogen gas is enormous, currently estimated at approximately US$3 billion globally. Putting just one bulk hydrogen production plant into operation at the site of a food oil manufacturing facility, AEC estimates that it could supply on-demand, high-quality hydrogen to the plant to satisfy the needs of their hydrogenation process and fuel for in-plant power generation, while also producing its commodity chemical products from the same facility."

Mr. Froats further stated, "We believe that such an installed bulk hydrogen system could typically result in gross revenues to the Company of about $80 million, with gross profits in excess of $30 million at current market prices for the produced hydrogen and commodity chemicals."

About Alternate Energy Corporation (AEC; www.cleanwatts.com)

Alternate Energy Corporation (AEC) is energizing the hydrogen economy with its on-demand Hydrogen production technology that provides small-scale electricity, and bulk production of hydrogen and a saleable by-product. These systems have global opportunities in multiple market segments. AEC's proprietary discovery in metallurgy and process technology permits the generation of hydrogen from water through a "green" process at a competitive level to the fossil fuel kWh cost of energy. AEC believes its systems can have a revolutionary impact on the energy industry.

Forward-Looking Statements:

Statements herein express management's beliefs and expectations regarding future performance and are forward-looking and involve risks and uncertainties, including, but not limited to, the ability to negotiate outstanding prior debts of acquired companies; properly identify acquisition partners; adequately perform due diligence; manage and integrate acquired businesses; react to quarterly fluctuations in results; raise working capital and secure other financing; respond to competition and rapidly changing technology; deal with market and stock price fluctuations; and other risks. These risks are and will be detailed, from time to time, in ARGY's Securities and Exchange Commission filings, including Form 10-KSB 10-QSB and 8-K. Actual results may differ materially from management's expectations.

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