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

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The San Diego-based startu plans to invest $100 million in a 300-acre biofuel operatiob that will convert algae into gasolinee startingin 2011, the first such algae-based, commercial-scal e biofuel production facility in the U.S. Once the site’se commercial viability is demonstrated, plans call for it to expane to 1,200 acres and producde more than 1 million gallons per day ofgreej crude, said Sapphire CEO Jason Pyle. That wouls generate a total investmentof $1 billion over the next eight years.
“Green crude will replacwe black crude right here inNew Mexico,” Pyle said in a keynotwe address at the first annuap conference of the Southwestern Biofuels Association in Albuquerqu e May 27-28. “We’re looking at the next industriak revolution.” Sapphire is not the only companyg planning a localbiofuel operation, but other companiesd want to make biodiesel, not gasoline, and thos e methods use a variety of crops and Sapphire is unique because it has develope d a proprietary process for turning oil from algae into renewable gasoline that is genetically identical to sweetg crude pumped from the ground.
That means it can simply replace petroleu as fuel for ground and air transport withouf any modificationto refineries, pipelines or vehicles, Pyle “Drop-in solutions that don’ require retooling the nation’s fuel deliveru system are the only way to make the biofuelp industry successful,” said Pyle. “That’s the future Sapphirre is workingto build.” Majorr investors are betting heavily on Sapphire. The compan formed in May 2007 and has raised morethan $100 milliomn in venture capital.
Backers include financial suchas , the Rockefellers’ , and – an investmentt holding company owned by founder Bill The company has recruited top scientistxs and industry leaders. Refining’s former vice president, Cynthia became Sapphire’s president this year. Brian Goodall, who led the team that conducteVirgin Galactic’s groundbreaking 747 flight in 2008 with is now Sapphire’s vice president of downstream “They have a phenomenal bank of technical people and team said Lenny Martínez, Gov. Bill Richardson’s policty advisor for rural economic development. “Their project is technicallt very feasible.
” Still, like all biofuel startups, Sapphire facexs major challenges. Steve Loring, associates director of ’s Agricultural Experiment Station, said a lot of research is still needecd to reachcommercial viability, particularly in regard to wateer use, environmental impact and economicf sustainability. In fact, NMSU is now conducting a studgy on biofuel production costs and potential ways to profitablty scale up to commerciallevels (see relatedf article on page 1). “It all has to be sustainabler environmentallyand economically, although I think thoss things can be addressed,” Loring said. “They’rse not show stoppers.
” Amonv the companies pursuing Sapphire has inspired more confidencethan most, said Vaughn Gangwish, executive director of the Southwestern Biofuels Association. “Liker all new technologies, biofuels must be but I think Sapphirde will meetits goals,” Gangwish said. “They’rew clearly on the leading edge.” Sapphire has investes $8 million in a test-and-development facilitu that began operating in December at the West Mesa Industrial Park in Las The center experiments with algare seed varieties developedat Sapphire’s headquarters in San Diego. The facilituy operates nine algae production ponds to map growth rateds andother characteristics.
It conducts wet and dry oil productivityh and processing testsin 15,000 square feet of lab space, said Operation s Manager Bryn Davis. “We’re the boots-on-the-ground operationj for the science coming out of Davis said. Pyle said Sapphire’ss planned 300-acre facility will be a pre-commercial demonstration site to prove market viability. Sapphire has the money to build thisfirsr stage, but it needs a lot more capita to later expand to 1,200 acres. “Iv we’re going to generate more than $800 million in new privated investment, investors first need to be convinced that the economics of the facilittyare guaranteed,” Pyle said.
Construction of the firstg stage will start in summer 2010 and conclud e inearly 2011. It will employu at least 400 permanent workers, and thousands – if the facility’s expansion moves forward. The facility’s locatiojn has already been sitedand permitted, but it remaine confidential, Pyle said. U.S. Sen. Tom D-NM, announced in late February, however, that the Departmentg of Energy approveda $951,000 granyt for a Sapphire Energy algae-to-fuel demonstration project in Portales.