SOURCE: Energy Quest, Inc.

January 19, 2010 10:40 ET

Energy Quest, Inc. to Build Power to Biodiesel Plant

Energy Quest to Build Wood Waste Gasification to Power Algae to Biodiesel Plant

HENDERSON, NV--(Marketwire - January 19, 2010) - Energy Quest, Inc. ("EQI") (OTCBB: EQST), an emerging leader in alternative energy and the development and production of hydrogen-enriched alternative fuels in an environmentally responsible manner announced today it is to begin construction on a turn key biomass (Wood Waste) to Power/Algae Energy plant producing 26.8 megawatt (24 net). The plant will consist of four 6.7 megawatt (6.0 net) modular power systems. Project site is located at Nances Creek Industrial Park, in Piedmont, Alabama. The attached Algae biodiesel plant will produce a clean and efficient fuel that can be used in any device that utilizes diesel fuel.

The plant at full capacity will require 33.5 tons per hour of wood waste feedstock provided from the surrounding area. The plant will produce approximately 24 MW of electrical power at $0.06 per KW and 20 million gallon annually of bio-diesel at $2.00 per gallon. The plant will operate 24 hours a day and when completed provide 60 jobs. EQI would be an owner and operate this facility.

Energy Quest's advanced modular gasification design will result in lower set up costs and increased efficiencies. The gasifiers will provide clean syngas fuel for the power generators. The Algae CO2 capture system will be provided by others and completely built in Piedmont.

The stack gases containing CO2 are captured and ducted to Algae growing pod clusters as feed for the growth of Oil (lipid) producing Algae. Algae grows in water. The lipid laden Algae is harvested from the pod growing clusters several times per day. The Algae is then dewatered to a sufficient level to feed into the lipid extraction process. Once the lipids have been extracted from the Algae it is fed into the lipid oil to diesel conversion process. Using this process will yield 200 litres of bio-diesel from every ton of CO2 produced from the biomass combustion process.

Estimated cost of the turn key project is $80.92 million USD. A rudimentary pay out time (POT) calculation based on conditions of 2009 using gross revenues of $71,239,554 with net revenues after tax of $34,279,830 million annually will be less than 3 years. It is felt that the project is economically more attractive than this figure may initially indicate as various government grants, recyclables and incentives (not taken in consideration in the POT calculations) are available for projects of this nature. We are starting this project with one 6.7 megawatt module (6.0 net) and continue to add each module until the four modules are complete. The plant when complete will have no emissions.

We have secured agreements for wood feedstock, building lease, purchase of bio-diesel and in the process of securing interconnect for the grid and power purchase agreement with the local electrical utility.

About Energy Quest

Energy Quest, Inc. a Nevada Corporation, is an emerging leader in the development, construction and marketing of low-cost alternate fuels worldwide. Through superior technology, the Company is focused on becoming a GreenPowerhouse™. Record energy prices, combined with the global focus moving rapidly towards addressing pollution, has heightened the need for sustainable, zero emission energy. Energy Quest's technology is based on clean, renewable energy, positioning it to benefit from global trends. Web-site

Forward-Looking Statements

From time to time, the company may issue forward-looking statements, which involve risks and uncertainties. This statement may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as actual results could differ and any forward-looking statements should be considered accordingly. The Company's filings may be accessed at the SEC's Edgar system at Statements made herein are as of the date of this press release and should not be relied upon as of any subsequent date. The Company cautions readers not to place reliance on such statements. Unless otherwise required by applicable law, we do not undertake, and we specifically disclaim any obligation, to update any forward-looking statements to reflect occurrences, developments, unanticipated events or circumstances after the date of such a statement.

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