Energy Management Agreement

Exhibit 10.7


(U.S. ENERGY LOGO)


ENERGY MANAGEMENT AGREEMENT
(Site Development and Operations)


The purpose of this Agreement is to set forth the understanding and agreement between U.S. Energy Services, Inc. ("U.S. Energy") and Advanced Bio Energy ("Client") related to the provision of energy management services.


PROJECT DESCRIPTION,: Client is developing a 100 million gallon per year ethanol plant ("Plant") to be located near Fairmont, Nebraska. The Plant will have peak electric usage of approximately 9 MW and will consume approximately 9,000 MMBtu of natural gas per day.


U.S. ENERGY RESPONSIBILITIES,: U.S. Energy will provide consulting and energy management services for supplies of natural gas and electricity for the Plant. These services will be provided during the construction of the Plant ("Construction Period"), and after the Construction Period when the Plant has been placed in service ("Completion Date"). The Completion Date shall be determined when the Plant begins producing ethanol. These services will be provided to Client upon request:


A. Energy Infrastructure Advisory Services During the Construction Period


1. Provide an economic comparison of receiving natural gas distribution
service. U.S. Energy will provide preliminary engineering cost estimates,
route drawings, and project timeline related to constructing pipeline
facilities.


In the event that a direct connect pipeline option is selected, U.S.
Energy will submit a tap request to the pipeline. In addition, U.S.
Energy will also attempt to negotiate an option for Client to minimize
interconnect costs through the purchase of firm transportation to the
Plant. Engineering and construction management services related to
constructing a pipeline may be provided by U.S. Energy's sister company
U.S. Energy Engineering, Inc. on a fee basis.


2. Determine whether firm, interruptible, or a blend of transportation
entitlement will provide the lowest burnertip cost. Factors that will be
considered include pipeline credits for the new interconnect, cost of an
alternate fuel system, and availability of specific receipt point
capacity.


3. Provide advisory services to Client regarding electric pricing and
service agreements.


a. Analyze the electric service proposals along with primary,
secondary and generation options and, recommend an electric
sourcing strategy and plan. The plan may include a combination of
electric supplier agreement and/or installation of on-site
generation.


/S/RLS


U.S. Energy Initials /s/GM
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Initials /s/RLS
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b. Negotiate final electric service agreements that meet the pricing
and reliability requirements of Client, including options for
third party access to electric metering.


c. Prepare and implement a regulatory strategy, if required and if an
alternative power supplier is selected. Any attorney fees required
for the specific purpose of obtaining regulatory approval for an
alternative power supplier, if any, will be over and above U.S.
Energy's monthly fee herein, and must be pre-approved by Client.


4. Evaluate the proposed electric distribution infrastructure (substation)
for reliability, future growth potential and determination of the
division of ownership of facilities between the utility and the Plant.


5. Investigate economic development rates, utility grants, equipment rebates
and other utility programs that may be available.


B. On-Going Energy Management Services Following the Completion Period


U.S. Energy will provide the following services at Client's request:


1. Provide natural gas supply information to minimize the cost of natural
gas purchased. This will include acquiring multiple supply quotes and
reporting to Client the various supply index and fixed prices. U.S.
Energy will not take title to Client gas supplies, but will communicate
supply prices and potential buying strategies.


2. Negotiate with pipelines, utilities, other shippers, and suppliers to
provide transportation, balancing, and supply agreements that meet
Client's performance criteria at the lowest possible cost.


3. Develop and implement a price risk management plan that is consistent
with Client's pricing objectives and 'risk profile.


4. Provide daily nominations to the suppliers, pipeline, and other
applicable shippers for natural gas deliveries to the Plant. This will
include daily electronic confirmations to Client of all nominations and
actual daily usage. U.S. Energy will utilize customer or utility supplied
telemeterin ...