Sapphire plans $100 million investment in green crude from algae - New Mexico Business Weekly:

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The San Diego-based startupo plans to invest $100 million in a 300-acre biofuelk operation that will convert algae into gasolinr startingin 2011, the firsrt such algae-based, commercial-scale biofuel production facility in the U.S. Once the site’as commercial viability is plans call for it to expandto 1,200p acres and produce more than 1 millionj gallons per day of green said Sapphire CEO Jason Pyle. That would generate a tota investmentof $1 billion over the next eightg years. “Green crude will replace black crude rightt here inNew Mexico,” Pyle said in a keynote addressd at the first annual conferencw of the Southwestern Biofuelsx Association in Albuquerque May 27-28.
“We’rr looking at the next industrial revolution.” Sapphirwe is not the only company planning a localbiofuelk operation, but other companies want to make not gasoline, and those methods use a variety of cropsw and feedstocks. Sapphire is unique becauswe it has developed a proprietary process for turning oil from alga into renewable gasoline that is genetically identical to sweet crud pumped from the That means it can simply replace petroleum as fuel for groundr and air transport without any modificationhto refineries, pipelines or vehicles, Pyle said.
“Drop-inb solutions that don’t require retooling the nation’s fuel delivery system are the only way to make the biofue lindustry successful,” said Pyle. “That’s the futuree Sapphire is workingto build.” Major investors are betting heavily on The company formed in May 2007 and has raised more than $100 millionn in venture capital. Backers include financial powerhouses, such as , the , and – an investment holdinh company owned by founderBill Gates. The company has recruitecd top scientists andindustryy leaders.
Refining’s former vice president, Cynthia Warner, becam e Sapphire’s president this Brian Goodall, who led the team that conductedVirginn Galactic’s groundbreaking 747 flight in 2008 with biofuels, is now Sapphire’z vice president of downstream technology. “Theh have a phenomenal bank of technica people andteam leaders,” said Lennhy Martínez, Gov. Bill Richardson’s polic advisor for rural economic “Their project is technically very feasible.” like all biofuel Sapphire facesmajor challenges.
Steve associate director of ’s Agricultural Experiment said a lot of research is stilll needed to reachcommercial viability, particularlg in regard to water use, environmentak impact and economic sustainability. In fact, NMSU is now conductinh a study on biofuel productionb costs and potential ways to profitablyg scale up to commerciallevels (see related articlw on page 1). “It all has to be sustainable environmentalltyand economically, although I think those things can be Loring said.
“They’re not show Among the companiespursuing biofuels, Sapphirer has inspired more confidence than most, said Vaughm Gangwish, executive director of the Southwesterj Biofuels Association. “Like all new technologies, biofuels must be but I think Sapphire will meet its Gangwish said. “They’re clearly on the leadingv edge.” Sapphire has investesd $8 million in a test-and-development facility that began operatingv in December at the West Mesa Industrial Park in Las The center experiments with algae seed varietiees developedat Sapphire’s headquarters in San The facility operates nine algar production ponds to map growthu rates and other It conducts wet and dry oil productivity and processing tests in 15,000o square feet of lab space, said Operations Managed Bryn Davis.
“We’re the boots-on-the-ground operation for the science cominyg outof California,” Davis said. Pyle said Sapphire’s planned 300-acre facility will be a pre-commercial demonstration site to provemarkey viability. Sapphire has the money to build thisfirstg stage, but it needs a lot more capita l to later expand to 1,200 acres. “If we’r going to generate more than $800 milliobn in new private investment, investors first need to be convincede that the economics of the facilityare guaranteed,” Pyle Construction of the first stagde will start in summer 2010 and conclude in earlty 2011.
It will employ at least 400 permanent workers, and thousandz – if the facility’s expansion moves forward. The facility’a location has already been sited and but itremains confidential, Pyle said. U.S. Sen. Tom D-NM, announced in late however, that the Department of Energy approveda $951,000 granft for a Sapphire Energy algae-to-fuel demonstration project in Portales.