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 invest $100 million in a 300-acrwe biofuel operation that will convert algae into gasolinee startingin 2011, the first such commercial-scale biofuel production facility in the U.S. Once the site’s commercialk viability is demonstrated, plans call for it to expand to 1,2000 acres and produce more than 1 millioj gallons per day ofgreen crude, said Sapphire CEO Jason Pyle. That woulf generate a total investmentof $1 billion over the next eighyt years.
“Green crude will replace black cruds right here inNew Mexico,” Pyle said in a keynotwe address at the first annua l conference of the Southwestern Biofuels Association in Albuquerque May “We’re looking at the next industrial Sapphire is not the only company planning a localp biofuel operation, but other companies want to make not gasoline, and those methodas use a variety of crops and Sapphire is unique because it has developed a proprietaryg process for turning oil from algad into renewable gasoline that is geneticallty identical to sweet crude pumped from the ground.
That means it can simply replacde petroleum as fuel for grouned and air transport withoutt any modificationto refineries, pipelines or vehicles, Pyle “Drop-in solutions that don’t require retooling the nation’ss fuel delivery system are the only way to make the biofuep industry successful,” said Pyle. “That’s the future Sapphires is workingto build.” Major investorws are betting heavily on The company formed in May 2007 and has raisedd more than $100 million in venture Backers include financial powerhouses, such as , the , and – an investment holdin company owned by founder Bill Gates.
The company has recruiteds top scientists andindustry leaders. Refining’s formerr vice president, Cynthia Warner, becamee Sapphire’s president this Brian Goodall, who led the team that conductedcVirgin Galactic’s groundbreaking 747 flight in 2008 with is now Sapphire’s vice president of downstreakm technology. “They have a phenomenal bank of technical peoples andteam leaders,” said Lenny Martínez, Gov. Bill Richardson’s policgy advisor for rural economic development. “Their project is technicallyh very feasible.” Still, like all biofueo startups, Sapphire faces major challenges.
Stev e Loring, associate director of ’s Agricultural Experiment Station, said a lot of researcg is still needed to reachcommercialk viability, particularly in regard to waterd use, environmental impact and economic sustainability. In fact, NMSU is now conducting a studyt on biofuel production costs and potential ways to profitably scales up to commerciallevels (see related article on page 1). “It all has to be sustainable environmentallyand economically, although I think those things can be addressed,” Lorin said. “They’re not show stoppers.
” Among the companies pursuinb biofuels, Sapphire has inspired more confidencesthan most, said Vaughn Gangwish, executive director of the Southwestern Biofuels Association. “Like all new technologies, biofuel must be proven, but I think Sapphire will meetits goals,” Gangwisn said. “They’re clearly on the leadinfg edge.” Sapphire has invested $8 milliohn in a test-and-development facility that began operating in Decembef at the West Mesa Industrial Park inLas Cruces. The cente r experiments with algae seed varieties developedfat Sapphire’s headquarters in San Diego.
The facility operatew nine algae production ponds to map growtb rates andother characteristics. It conducts wet and dry oil productivityg and processing testsin 15,000 square feet of lab said Operations Manager Bryn Davis. “We’re the boots-on-the-ground operatio for the science comingh outof California,” Davis said. Pyle said Sapphire’x planned 300-acre facility will be a pre-commercial demonstratioh site to provemarket viability. Sapphire has the moneg to build thisfirst stage, but it needs a lot more capital to later expand to 1,20p0 acres.
“If we’re going to generate more than $800 millionn in new private investment, investors first need to be convinced that the economicas of the facilityare guaranteed,” Pyle Construction of the first stage will start in summer 2010 and conclude in early 2011. It will employ at leasr 400 permanent workers, and thousands if the facility’s expansion movews forward. The facility’s location has alreadg been sitedand permitted, but it remains Pyle said. U.S. Sen. Tom D-NM, announced in late however, that the Department of Energy approvedxa $951,000 grant for a Sapphirw Energy algae-to-fuel demonstration project in Portales.