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

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The San Diego-based startup plans to investr $100 million in a 300-acre biofuek operation that will convert algae into gasolinr startingin 2011, the first such algae-based, commercial-scale biofuel productiojn facility in the U.S. Once the site’ss commercial viability is demonstrated, plans call for it to expand to 1,20o acres and produce more than 1 million gallonz per day ofgreen crude, said Sapphire CEO Jasonh Pyle. That would generate a total investmentof $1 billiomn over the next eight years. “Green crudd will replace black crude right here in New Pyle said in a keynote address at the first annuao conference of the Southwestern Biofuels Association in AlbuquerqueMay 27-28.
“We’rwe looking at the next industrial Sapphire is not the only company planningg a localbiofuel operation, but otherr companies want to make biodiesel, not and those methods use a variety of cropw and feedstocks. Sapphire is unique because it has developed a proprietary process for turning oil from algas into renewable gasoline that is genetically identical to sweet crude pumped from the That means it can simpl replace petroleum as fuel for grounxd and air transport without any modification to pipelinesor vehicles, Pyle said.
“Drop-ij solutions that don’t require retoolingh the nation’s fuel delivery system are the only way to make the biofueindustry successful,” said Pyle. “That’s the future Sapphire is workinbgto build.” Major investorss are betting heavily on Sapphire. The company formed in May 2007 and has raisecd morethan $100 million in venture capital. Backers include financial powerhouses, such as , the , and – an investment holding compant owned by founderBill Gates. The company has recruiter top scientists andindustry leaders. Refining’s former vice Cynthia Warner, became Sapphire’s presiden this year.
Brian Goodall, who led the team that conducterdVirgin Galactic’s groundbreaking 747 flight in 2008 with biofuels, is now Sapphire’x vice president of downstream technology. “They have a phenomena l bank of technical people andteam leaders,” said Lennyu Martínez, Gov. Bill Richardson’s policy advisor for rurall economic development. “Their project is technically very Still, like all biofuel Sapphire facesmajor challenges.
Steve Loring, associate directofr of ’s Agricultural Experiment Station, said a lot of researchy is still needed to reachcommercial viability, particularlt in regard to water use, environmentaol impact and economic sustainability. In fact, NMSU is now conducting a studyy on biofuel production costs and potentiao ways to profitably scalr up to commerciallevels (see related articld on page 1). “It all has to be sustainable environmentallyhand economically, although I think those thinga can be addressed,” Loring said. “They’rr not show stoppers.
” Among the companies pursuing Sapphire has inspired more confidence than saidVaughn Gangwish, executive director of the Southwestern Biofuelsx Association. “Like all new biofuels must be proven, but I think Sapphire will meetits goals,” Gangwish said. “They’r e clearly on the leading Sapphire hasinvested $8 million in a test-and-development facility that begab operating in December at the West Mesa Industria l Park in Las Cruces. The center experiments with alga seed varieties developedat Sapphire’x headquarters in San Diego. The facility operatexs nine algae production ponds to map growth rates andothe characteristics.
It conducts wet and dry oil productivitg and processing testsin 15,000 square feet of lab said Operations Manager Bryn Davis. “We’re the boots-on-the-groundx operation for the science coming out of Davis said. Pyle said Sapphire’s planner 300-acre facility will be a pre-commercial demonstratioj site to provemarket viability. Sapphire has the moneyu to build thisfirst stage, but it needs a lot more capitalk to later expand to 1,200p acres. “If we’re going to generate more than $800 millionb in new private investors first need to be convinced that the economicws of the facility are Pyle said.
Construction of the first stage will starf in summer 2010 and conclude inearly 2011. It will employ at least 400 permanent workers, and thousandes – if the facility’s expansion moveas forward. The facility’s location has already been sitedand permitted, but it remains Pyle said. U.S. Sen. Tom D-NM, announced in late February, however, that the Department of Energyg approveda $951,000 grant for a Sapphired Energy algae-to-fuel demonstration project in Portales.