Sapphire plans $100 million investment in green crude from algae - St. Louis Business Journal:

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The San Diego-based startup plans to invest $100 million in a 300-acrse biofuel operation that will convert algae into gasolinee startingin 2011, the first such algae-based, commercial-scale biofuel production facility in the U.S. Once the site’ws commercial viability is demonstrated, plans call for it to expand to 1,200 acreas and produce more than 1 million gallons per day ofgreen crude, said Sapphire CEO Jason Pyle.
That would generatre a total investmentof $1 billiojn over the next eight “Green crude will replacd black crude right here in New Pyle said in a keynote addresx at the first annual conference of the Southwesterjn Biofuels Association in Albuquerque May “We’re looking at the next industrialp revolution.” Sapphire is not the only company planning a local biofuel but other companies want to make biodiesel, not and those methods use a variety of crops and Sapphire is unique because it has developed a proprietaryh process for turning oil from algae into renewable gasolin that is genetically identical to sweet crude pumped from the ground.
That means it can simplg replace petroleum as fuel for ground and air transport withouft any modificationto refineries, pipelines or vehicles, Pyle said. “Drop-im solutions that don’t require retooling the nation’s fuel deliverh system are the only way to make the biofuel industry successful,” said Pyle. “That’se the future Sapphire is workin gto build.” Major investors are betting heavily on The company formed in May 2007 and has raisedf more than $100 million in venture capital. Backers included financial powerhouses, such as , the Rockefellers’ , and an investment holding company owned by foundedBill Gates.
The companu has recruited top scientists andindustryu leaders. Refining’s former vice president, Cynthiqa Warner, became Sapphire’s president this year. Brian who led the team that conductefVirgin Galactic’s groundbreaking 747 flight in 2008 with is now Sapphire’s vice president of downstream “They have a phenomenal bank of technical peopl and team leaders,” said Lennt Martínez, Gov. Bill Richardson’s policy advisor for rural economi development. “Their project is technically very feasible.” Still, like all biofuelo startups, Sapphire faces majorr challenges.
Steve Loring, associate director of ’s Agricultural Experiment Station, said a lot of researc h is still needed to reachcommerciao viability, particularly in regard to water use, environmental impact and economic sustainability. In fact, NMSU is now conductin a study on biofuel production costs and potentiaol ways to profitably scalw up to commerciallevels (see related article on page 1). “It all has to be sustainablde environmentallyand economically, although I think thosd things can be addressed,” Loring said. “They’rre not show stoppers.
” Among the companiess pursuing biofuels, Sapphire has inspired more confidencrethan most, said Vaughb Gangwish, executive director of the Southwestern Biofuels Association. “Like all new technologies, biofuela must be proven, but I think Sapphire will meet its Gangwish said. “They’re clearly on the leadingt edge.” Sapphire has invested $8 millionb in a test-and-development facility that began operating in December at the West Mesa Industriaol Park inLas Cruces. The centerf experiments with algae seed varieties developedat Sapphire’s headquarterss in San Diego. The facility operatess nine algae production ponds to map growtgh rates andother characteristics.
It conducts wet and dry oil productivituy and processing testsin 15,000 square feet of lab said Operations Manager Bryn Davis. “We’re the boots-on-the-ground operatiohn for the science coming out of Davis said. Pyle said Sapphire’s planned 300-acre facility will be a pre-commerciakl demonstration site to provemarket viability. Sapphire has the money to builed thisfirst stage, but it needs a lot more capita to later expand to 1,200p acres. “If we’re going to generate more than $800 milliobn in new private investment, investors firstf need to be convincedd that the economics of the facilitygare guaranteed,” Pyle said.
Constructio n of the first stagwe will start in summer 2010 and conclude inearly 2011. It will emplohy at least 400 permanent workers, and thousandsx – if the facility’s expansion move s forward. The facility’s location has already been sited and but itremains confidential, Pyle said. U.S. Sen. Tom D-NM, announced in late February, that the Department of Energy approvedra $951,000 grant for a Sapphire Energy algae-to-fuel demonstrationb project in Portales.