Kobolds aren't blue.

Apologies to Bill Watterson

In Chapter 4 of The Super Natural, Whitley Strieber attempts -- not for the first time -- to connect the little blue men of his close-encounter experiences with the kobolds of German folkore.

Like so many of the aliens believed to have recently arrived, little blue men have been with us for a long time. As is the case with most of the other forms, they were originally identified in folklore -- most frequently, in this case, in northern European folklore. [. . .] In the past, they were most often found in mines. Now they're known as "blue aliens." They were observed by German, Welsh, Cornish, and English miners. The folklore was most developed in Germany, where they were given the name kobolds. Because of its dark blue color, the metal cobalt, discovered in a German mine in 1735, was named after them. But the word "kobold" ultimately derives from the Greek for "rogue." Most appropriate, judging from my own experience with them. They were said to carry, at the level of the heart, a small orb, glowing red, and, in point of fact, I've seen that myself.

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Only in Strieber's books have I ever encountered the idea that kobolds are blue.

While "cobalt ores" were indeed named for the legendary kobold, this was because they are worthless and toxic, and were thus thought to be the handiwork of subterranean goblins -- not because they could be used to produce a pigment that was the same color as those goblins!

The glowing orb mentioned by Strieber can be found in the 1884 book Nineteenth Century Miracles; or, Spirits and Their Work in Every Country of the Earth, by Emma Hardinge Britten. I quote from p. 32.

From Mdme. Kalodzy, the writer of "Rambles in the Hartz Mountains," and "The Clock Makers of the Forest," &c., the author of this work has received the following account of these "Kobolds" or spirits, as witnessed by Madame Kalodzy and three companions, who spent a week in the hut of a peasant, one Michael Engelbrecht, in whose family the Kobolds seem to gave been perfectly familiar:--

"On the three first days after our arrival," said Madame K----, "we only heard a few dull knocks, sounding in and about the mouth of the mine, as if produced by some vibrations of very distant blows, but when on the third evening Michael came home from work, he brought us the welcome intelligence that his friends, the Kobolds, had promised by knockings to make us a visit. This we were right glad of, as Dorothea, our Michael's wife, had expressed her fears that they might be shy of so many strangers, and would not appear, unless we spent some hours in the mine.

"We were about to sit down to tea when Mdlle. Gronin called our attention to a steady light, round, and about the size of a cheese plate, which appeared suddenly on the wall of the little garden directly opposite the door of the hut in which we sat.

"Before any of us could rise to examine it, four more lights appeared almost simultaneously, about the same shape, and varying only in size. Surrounding each one was the dim outline of a small human figure, black and grotesque, more like a little image carved out of black shining wood than anything else I can liken them to. Dorothea kissed her hands to these dreadful little shapes, and Michael bowed with great reverence. As for me and my companions, we were so awe-struck yet amused at these comical shapes, that we could not move or speak until they themselves seemed to flit about in a sort of wavering dance, and then vanish, one by one."

The narrator went on to say, that she and her husband have since both heard and seen these little men, who always come and go very suddenly; appear as above described in the shadowy image on diminutive black dwarfs about two or three feet in height, and at that part which in the human being is occupied by the heart, they carry the round luminous circle first described, an appearance which is much more frequently seen than the little black men themselves.

Here is Strieber's glowing orb (though not described as red), but notice that the kobolds that carry it are unambiguously described as black, not blue. (That the kobolds announce their arrival with knocks is also relevant to some of Strieber's encounters, though he doesn't mention it.)

I suppose it's possible that Strieber's description of the kobold is based on other accounts than the ones I've been able to find, and that those other accounts describe the creature as blue. I doubt it, though. I strongly suspect that Strieber was alluding to this story by Madame Kalodzy and that he found it the same way I did: by checking up the references in the Wikipedia article on kobolds. Strieber writes, "They were observed by German, Welsh, Cornish, and English miners"; cf. Wikipedia's identical list of four countries: "Medieval European miners believed in underground spirits. The kobold filled this role in German folklore and is similar to other creatures of the type, such as the English bluecap, Cornish knocker and the Welsh coblynau."

The bluecap of Border folklore at least has the advantage of being blue! (Wikipedia describes it as "a mythical fairy or ghost in English folklore that inhabits mines and appears as a small blue flame.") No particular color seems to be associated with the knocker or coblynau. Kobolds themselves are variously described, but never as blue, and the color most commonly associated with the mine-dwelling variety is black.