CloneDVD is designed to compress dvd-video. Blu ray is an entirely different format, and CloneDVD simply cannot work with it.
If you want to compress blu ray, I'd suggest using AnyDVD HD to decrypt and rip the entire disk to the hard drive, then use a free program called BD Rebuilder to do the compression. You can make a blu ray video on a blank 25gb disk, a double layer dvd or even a single layer dvd. BD Rebuilder also has the ability to convert blu ray to dvd-video format.
Once you have the finished product you want, you burn to a disk using ImgBurn. It is a free burning program and BD Rebuilder can make use of it automatically if you so wish.